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There is an acute scarcity of potable water in many parts of the world, and especially in the Middle East region. Most of developing countries around the world endeavor to make a balance between declining fresh water supplies and the rapid demands of a rising population. Economic analysis is an essential factor influencing the decision-making in the adoption of desalination technology. This paper presents an economic and comparative evaluation study for a small scale solar powered water desalination system. An economic model has been developed and used to calculate the economic parameters. The results showed that the estimated cost of potable water produced by a solar desalination compact unit was 11 US$/m(3) and this could be reduced to 8 US$/m(3) when an evacuated tube solar collector with an area of 3 m(2) was used. It has been also proved that the cost of fresh water decreased with increasing the lifetime of desalination plant. Development of small scale desalination plants based on the concept of humidification and dehumidification in a compact unit coupled with solar collectors could be considered a unique solution to water shortages in remote and semi-arid areas. (C) 2013 Elsevier Ltd. All rights reserved.