This paper presents a new integrated biomass and solar town concept that can serve as a global model for smart eco-villages in tropical countries. In this research, a renewable energy (RE)-based distributed energy generation (DEG) system for an eco-village driven by the “integrated biomass and solar town” concept was considered in order to optimise RE resource utilisation. To design a cost-effective integrated biomass and solar town, a mixed integer linear programming (MILP) model was developed. The proposed model considers actual operation constraints due to biomass availability, weather variation, and restriction of the thermal plant. The application of this new concept on the Iskandar Malaysia (IM) case study with an average daily demand load of 16,900 kWh/d revealed that a 417 kW direct-fired biomass power generator, 412 kW biogas thermal power plant, 136 kW solar photovoltaic (PV) modules, and sodium sulphur battery with an energy capacity of 3046 kWh and power of 1530 kW were required. The annual cost of the integrated biomass and solar town was estimated to be approximately RM 3 million at an electricity cost of RM 0.48/kWh.