The aim of this study was to analyze the effect of ZnO nanoparticles (ZnO NPs) on the biogas production from mechanically treated barley straw and to perform a techno-economic analysis based on the costs assessment and on the results of biogas production. The structural changes of mechanically pretreated barley straw were observed using FTIR, XRD, TGA, and SEM. Additionally, both green ZnO NPs prepared from red alga (Antithamnion plumula) extract and chemically prepared ZnO NPs were characterized by FTIR, XRD, SEM, and TEM, surface area, and EDX. The results revealed that the biogas production was slightly improved by 14.9 and 13.2% when the barley straw of 0.4 mm was mechanically pretreated with 10 mg/L of both green and chemical ZnO NPs and produced 390.5 mL biogas/g VS and 385 mL biogas/g VS, respectively. On the other hand, the higher concentrations of ZnO NPs equal to 20 mg/L had an inhibitory effect on biogas production and decreased the biogas yield to 173 mL biogas/g VS, which was less than the half of previous values. It was also clear that the mechanically treated barley straw of 0.4 mm size presented a higher biogas yield of about 340 mL/g VS, in comparison to 279 mL biogas/g VS of untreated biomass. The kinetic study showed that the first order, modified Gompertz and logistic function models had the best fit with the experimental data. The results showed that the nanoparticles (NPs) of the mechanically treated barely straw are a suitable source of biomass for biogas production, and its yields are higher than the untreated barley straw. The results of the cost-benefit analysis showed that the average levelized cost of energy (LCOE), adopting the best treatments (0.4 mm + 10 mg/L ZnO), is 0.21 €/kWh, which is not competitive with the other renewable energy systems in the Egyptian energy market.