This study assessed suitable smart grid areas for power generation and distribution from solar and small hydro energy resources in Western Uganda by employing the fuzzy analytic hierarchy process (AHP) based on geographic information system (GIS) data. This was performed based on the selected economic, environmental, and technical criteria by the authors guided by the experts’ judgements in the weighing process. The main criteria also included various sub-criteria. The sub-criteria of the economic criterion included distance from transmission lines, topography, and distance to roads. The environmental sub-criteria covered land use, sensitive areas, and protected areas. The technical sub-criteria were on distance from demand centers, available potential energy resources (solar and hydro), and climate (rainfall and sunshine). The weights of the main criteria and the sub-criteria were calculated by using the fuzzy AHP. These weights were then used in the GIS environment to determine both the potential for power generation from the solar energy resource and the smart grid suitable areas. According to the weight results, the economic criteria has the highest weight, followed by environmental and technical criteria. The validation of the experts’ judgements for each criterion by comparing the results from fuzzy AHP with AHP confirmed insignificant differences in weights for all criteria. The obtained suitable smart grid areas in Western Uganda have been classified into three parts, that is, the South, North, and Central. Therefore, this is a one-of-a-kind study that, in the authors’ view, will provide the initial insights to the government, policymakers, renewable energy practitioners, and researchers to investigate, map, and embrace decarbonization strategies for the electricity sector of Uganda.