Solar photovoltaic (PV) hybrid system technology is a hot topic for R&D since it promises lot of challenges and opportunities for developed and developing countries. The Kingdom of Saudi Arabia (KSA) being endowed with fairly high degree of solar radiation is a potential candidate for deployment of PV systems for power generation. Literature indicates that commercial/residential buildings in KSA consume an estimated 10–45% of the total electric energy generated. In the present study, solar radiation data of Dhahran (East-Coast, KSA) have been analyzed to assess the techno-economic viability of utilizing hybrid PV–diesel–battery power systems to meet the load requirements of a typical commercial building (with annual electrical energy demand of 620,000kWh). The monthly average daily solar global radiation ranges from 3.61 to 7.96kWh/m2. NREL's HOMER software has been used to carry out the techno-economic viability. The simulation results indicate that for a hybrid system comprising of 80kWp PV system together with 175kW diesel system and a battery storage of 3h of autonomy (equivalent to 3h of average load), the PV penetration is 26%. The cost of generating energy (COE, US$/kWh) from the above hybrid system has been found to be 0.149$/kWh (assuming diesel fuel price of 0.1$/L). The study exhibits that for a given hybrid configuration, the operational hours of diesel generators decrease with increase in PV capacity. The investigation also examines the effect of PV/battery penetration on COE, operational hours of diesel gensets for a given hybrid system. Emphasis has also been placed on unmet load, excess electricity generation, percentage fuel savings and reduction in carbon emissions (for different scenarios such as PV–diesel without storage, PV–diesel with storage, as compared to diesel-only situation), cost of PV–diesel–battery systems, COE of different hybrid systems, etc.