This work presents the main features of the new power plant that comprises the modified reversible hydroelectric (HE) power plant operating together with the photovoltaic (PV) power plant. Such Solar Hydroelectric Power Plant (SHE) uses solar energy as the only input for production of solar and hydro energy. Thereat, water reservoir serves for daily and seasonal energy storage, thus basically solving the problem of energy storage, which is the biggest problem of wider use of solar energy. The most expensive part of SHE is the PV generator, whose optimal sizing is essential for providing energetic independence of a settlement or isolated consumer. A systematic approach that includes all relevant elements of this system has been implemented for optimal sizing of the PV power plant. The developed model was used in analysis of certain parameters of the SHE system. The results of the analysis show the system characteristics and that the proposed model describes the operation of the power plant very well. The feasibility and characteristics of the power plant were tested on electric energy supply of the island of Vis in Croatia. It has been established that the system is real, feasible and can be very successfully applied on different locations, for different consumers and can vary in size. The prerequisite for realization of such system is the construction of a modified reversible HE power plant. The presented SHE represents a permanently sustainable energy source that can continuously provide power supply to a consumer, using exclusively natural and renewable energy sources, without causing harmful effects on the environment. (C) 2009 Elsevier Ltd. All rights reserved.