In this paper, optimization scheme for microgrids is presented. In microgrids, the operational cost and greenhouse gas emissions are mainly depend on types and sizes of distributed generators (DGs) used. This paper aims to reduce the operational cost and the greenhouse gas emissions through evaluating the optimal output of each DG type. DGs operate within their respective capacity limits while satisfying the local energy demand (both electrical and thermal). The multi-objective optimization compromises between the operational cost and the emissions. The constraints include power and heat demands constraints, and DG capacity limits.