Many countries encourage the establishment of microgrids to support the spread of renewable energy sources, as it is the best option for dealing with electricity problems and air pollution. In this study, four sizing scenarios of a residential microgrid in a northern Egyptian city surrounded by rural areas are introduced as an interpretative example to explore the optimal scheduling strategy. This paper’s novelty originated from the techno-economic and ecological performance comparison of different sizing strategies for a residential load based on renewable sources, considering load shifting algorithms and using rice straw as biomass fuel instead of its open-field burning. The proposed optimization algorithm illustrates that the PV/WG/Biomass/two-ways-grid-connection microgrid is the best investable-reliable sizing option with a minimum net present cost of about ($ 0.7073 million), which is reduced by ($ 0.1664 million) when 30% demand response participation is applied. Also, the PV/WG/Biomass system has the most significant environmental impact with a CO2 emissions reduction of around (3.465*10^8 kg).