Solar energy is a major renewable energy source as it is clean and abundant. The solar radiation yield of a PV system can be enhanced by fixing the solar panel at optimal orientation or coupling with a solar tracking system. This study aims to evaluate the cost-effectiveness of incorporating solar trackers into microgrid to improve the energy gain. A mathematical model is formulated for the optimal sizing of microgrid and the model is implemented on a case study with 500 households. The study outcome suggests the feasibility of solar tracking system is greatly dependent on its cost. When the cost of solar tracker is low, east-west single-axis tracking system is the most feasible option, but the fixed-tilt system becomes more feasible when the cost of solar tracker is high. The threshold for east-west single-axis tracking system investment is found to be <240 USD/kWp.