Hybrid　energy　systems　with　renewable　energy　penetration　have　become　popular　solutions　to　improve　energy　se-curity　and　realize　the　carbon　neural　target　in　urban　areas.　In　this　paper,　a　holistic　framework　is　proposed　for　the　sustainable　development　of　a　neighborhood-scale　energy　system　integrating　rooftop　PV　and　waste-to-energy　technologies.　Under　this　framework,　potential　assessment　of　local　renewable　energy,　optimization　approach,　and　sensitivity　analysis　are　integrated　for　the　optimal　design　and　management　of　the　hybrid　energy　system　with　uncertain　analysis.　Besides,　the　economic,　efficiency,　and　environmental　performance　under　grid　-connected　and　off-grid　operation　modes　are　compared.　This　proposed　framework　is　applied　to　a　neighborhood　area　in　Beijing.　The　results　show　that　the　grid-connected　hybrid　energy　system　will　still　rely　on　traditional　energy　supply　with　low　cost　but　great　carbon　emissions.　In　the　off-grid　mode,　11　%　of　the　rooftop　area　will　be　encouraged　to　deploy　PV　panels,　which　satisfying　39　%　of　the　total　electricity　demand.　Moreover,　although　decreasing　the　PV　capital　cost,　raising　the　electricity　price,　and　increasing　carbon　emission　penalty　cost　will　stimulate　the　develop-ment　of　local　renewable　energy,　compulsive　renewable　energy　penetration　policy　is　more　effective　to　promote　the　traditional　energy　system　transformation　and　reduce　carbon　emissions.　(c)　2022　International　Energy　Initiative.　Published　by　Elsevier　Inc.　All　rights　reserved.