Ensuring a reliable, efficient, and affordable energy is a great challenge. Generating electricity from renewable energy sources can provide direct and indirect economic benefits in excess of costs as well as environmental benefits through the reduction of CO 2 emission. Policy makers should promote renewable resources (i.e., solar, wind, biomass, hydropower, and geothermal) for sustainable and carbon-free energy. It is predicted that about 57% of total energy demand could be generated from renewable sources by 2050. The renewable energy source power generation integrated into the smart grid system can be one of the best options for future energy security. The smart grid system addresses the degradation of energy source and modern information technology for communication and improves the efficiency of power distribution. A smart grid can transform the 20th century power grid as a more intelligent, flexible, reliable, self-balancing, and interactive network that enables economic growth, environmental oversight, operational efficiency, energy security, and increased consumer control. Moreover, the smart grid would create new markets as private industries develop energy-efficient and intelligent appliances, new communication capabilities, and smart meters. Smart grid can replace traditional forms of energy with renewable sources of generation. Renewable energy is always required by environmentalists in the hopes of developing a cleaner and more efficient power generation. A smart grid is environmentally beneficial because it utilizes the distribution of renewable sources. Smart grid offers a genuine path toward significant environmental improvement.