Off-grid hybrid energy systems (HESs) have become more cost-effective and reliable than single-source systems for the electrification of rural areas. This paper presents a techno-economic and environmental analysis of different hybrid systems to supply electricity to a typical Iraqi rural village. The HOMER software is utilized for the optimization of the systems using the multi-year module, which has been overlooked in the literature thus far. The analysis shows that the PV/hydro/diesel/battery HES is the most economical option with a net present cost (NPC) of $113201, in addition to having acceptable technical and environmental performance levels. Throughout the project’s 20 year lifetime, PV electricity production is reduced by 9.1% while diesel electricity production, CO2 emissions and served load are increased by 90.8%, 91.7% and 8.8%, respectively. The NPC for the multi-year module shows an increment of 22.5% in comparison with that of the single year module. Furthermore, the sensitivity analysis of some rarely reported parameters, such as water pipe losses, generator minimum load, battery roundtrip efficiency, battery setpoint state of charge, capacity shortage, PV capital cost multiplier and multi-year, demonstrated that variations in these parameters have significant effects on the system power flow and its economic analysis.