The reliability assessment of a power system has become a significant subject in the power sector for both utilities and customers due to sudden increase in demand of a reliable power supply at minimal frequency and duration of power outages. This has prompted the utilities to use the accessible renewable energy resources (RERs) as measures to increase the reliability of a power system as well as reduction of over dependence on fossil fuels. The incorporation of renewable energy technologies into a radial distribution system has changed the single power source to bidirectional and multiple power sources. This improves the reliability of the system as well as reducing the power outages that associated with the radial distribution networks. In this work, wind turbine generator (WTG), photovoltaic (PV) and battery storage system (BSS) are utilized with the aim of improving the reliability of the existing microgrid power system and reducing the cost of energy (COE) and annualised cost of the system (ACS). The objective of the research work is accomplished by using the total outage cost (TOC), COE, ACS, annualized capital cost (ACC), annualized maintenance cost (AMC), annualized fuel cost (AFC), annualized emission cost (AEC), annualized replacement cost (ARC) and net present cost (NPC) of the power system. An fmincon optimization tool is utilized in this paper to investigate the effects of RERs in a microgrid system. The stochastic characteristics of the major components of RERs and their influences on the reliability of a power system are studied by using a Markov model. The proposed method is applied on the modified Roy Billinton Test System (RBTS) to establish the fact that RERs can be used to enhance the reliability and reduce the COE and ACS of the system. A comparative analysis of RERs is also carried out by studying the effects of interest rates on the COE, NPC and ACS of a power system. The results obtained from the research work demonstrate that the application of renewable energy distributed generation technologies has achieved better results.