The electricity sector is a major source of carbon dioxide emission that contributes to the global climate change. Over the past decade wind energy has steadily emerged as a potential source for low carbon energy source which are grown through time. As wind power generation increases around the world, there is increasing interest in adding intermittent power to the electricity grid and to design an off-grid wind energy system. The goal of the current thesis is to investigate techno-economically viable wind energy system that supplies electricity and Heat for a given residential community in Ethiopia. To ease the optimization process, HOMER software is used to identify the potential wind area and optimize cost effective wind energy system.