Abstract <p>Hydrogen, when produced from renewable energy sources (RES), emerges as a highly desirable and sustainable fuel, offering a pathway toward decarbonizing energy systems. Among the various methods of green hydrogen generation, water electrolysis powered by renewable energy stands out as the most environmentally benign approach. This study presents experimental findings and software modeling developed in MATLAB for a small-scale solar hydrogen generation system utilizing proton exchange membrane (PEM) electrolysis. The experiments were conducted in the Ouargla region of southeastern Algeria, characterized by its arid desert climate, to evaluate the system’s performance under real-world conditions. The system integrates two NM 54 polycrystalline photovoltaic (PV) panels, each with a capacity of 250 W, a power control unit equipped with DC-DC converters, and a PEM electrolyzer. Key experimental results revealed that the system produced approximately 295 dm³ of hydrogen during the trial period. These findings provide a foundational benchmark for scaling up and optimizing hydrogen production systems capable of year-round operation in similar climatic conditions. In addition to the technical analysis, an economic assessment was conducted to estimate the levelized cost of hydrogen (LCoH). Sensitivity analysis highlighted the significant influence of the electrolyzer’s capital cost on the LCoH. The projected results indicate that the cost of producing hydrogen from solar energy in Ouargla is economically competitive, with an estimated LCoH of $8.8&#xa0;per kilogram of hydrogen. This study underscores the feasibility of solar-driven hydrogen production in desert regions and contributes valuable insights for advancing renewable hydrogen technologies in resource-abundant areas.</p>