Preheat oven to 375°F and lightly grease a 9x13-inch baking dish with butter or cooking spray.
Heat butter and olive oil in a large skillet over medium heat. Add sliced onions and cook for 5 minutes until softened.
Add kielbasa slices to the skillet and cook for 3 to 4 minutes until edges are golden and slightly crispy.
Arrange frozen pierogies in a single layer in the prepared baking dish. Spread the onion and kielbasa mixture evenly over the top.
Whisk together sour cream, chicken broth, garlic powder, smoked paprika, and black pepper in a small bowl. Drizzle this mixture over the pierogies and sausage.
Sprinkle shredded cheddar cheese evenly over the top. Cover the dish with aluminum foil.
Bake covered for 25 minutes, then remove foil and bake for another 10 to 15 minutes until cheese is bubbly and golden.
Rest for 5 minutes before serving. Garnish with fresh parsley if desired.
