Renewable Energy Communities (RECs) are becoming essential in tackling energy transition challenges, promoting local energy sharing from diverse renewable energy sources to optimize environmental, economic, and social benefits. This study presents an innovative simulation tool for designing hybrid RECs that integrate diversified renewable sources, addressing a critical gap in existing tools. The tool was used to design a REC in a woodland area in central Italy where the sustainable management of locally available resources suggests the energy generation through biomass and photovoltaic plants. In this context, the REC initiative is further suggested as a mechanism to counteract depopulation trends by activating new services aligned with sustainable development goals. Simulations of various scenarios, involving REC members’ compositions and renewable plant sizes, reveal that opting for 600 kW biomass plant yields significant environmental benefits, with up to 1660 t/year of avoided CO2 emissions and over 80 % energy self-sufficiency for any configuration. However, incorporating more PVs in the energy mix could lead to shorter discounted payback period (down to 4.9 years). The engagement of industrial users is recognized as a critical factor for the success of the REC initiative, playing a vital role in community revitalization.