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This paper discusses the development of a model for the optimal operation of a hybrid diesel-photovoltaic pumping system using, groundwater in a pumped hydro storage scheme which can be used to minimize the daily electricity cost of a farm. The developed model can minimize the power produced from the diesel generator, while optimally managing the generated power flow from the PV and the groundwater pumped hydro storage given the variable load demand as well as the availability of solar resource. As a case study, the model has been used to simulate a small farming activity in South Africa, with the aim of evaluating the potential energy cost saving achievable using the proposed system when compared to exclusive power production using a diesel generator. The simulation results show that a potential 71.3% of energy cost saving can be achieved using the proposed hybrid system with the optimal control model rather, than supplying the load demand by the diesel generator exclusively.