The objective of this paper is to compare the economics of using solar energy to operate small multiple effect seawater distillation systems in remote areas with the conventional method of using fossil fuels. The particular multiple effect system used is an advanced horizontal tube, falling film system called "multiple effect stack", MES, in which the pumping energy requirement is relatively low compared with the horizontal in-line system. Three system configurations were investigated: (1) conventional system using a steam generator to provide steam for the MES evaporator and a diesel generator to provide pumping power, (2) solar-assisted system which uses solar thermal collectors to provide hot water (instead of steam) for the evaporator and a diesel generator for pumping power, and (3) solar stand-alone system which uses solar thermal collectors for the evaporator heat requirement and a solar PV array to provide electrical energy for pumping. At the present time, solar energy cannot compete favorably with fossil energy particularly under the present international market prices of crude oil. However, in many remote sunny areas of the world where the real cost of fossil energy can be very high, the use of solar energy can be an attractive alternative. Two important cost parameters affect the relative economics of solar energy vis-a-vis conventional (fossil) energy: the collector cost in $ per square meter and the cost of diesel oil in $ per Giga Joule. Solar energy becomes more competitive as the local cost of procuring conventional fuel increases and as the collector cost decreases. The water cost fi;om a solar thermal-diesel-MES system (Configuration #2) can be seen to approach the water cost from a steam generator-diesel-MES system (Configuration #1) when the collector cost drops to 200 $/m(2) and diesel oil cost at the remote site reaches 50 $/GJ. Using a 100% solar system (Configuration #3) with solar thermal and solar PV collectors being utilized, the economics was seen to improve in favor of the solar system. Even when diesel fuel can be procured at 10 $/GJ at the remote site, the cost of water from the solar system can be seen to approach that fi-om a conventional plant when thermal collectors costing 200 $/m(2) are used. The cost of water from the solar system was shown to be always less than that fi-om a conventional system which uses diesel oil procured at the high price of 50 $/GJ but always higher than water produced from a conventional system using diesel oil at the low price of 10 $/GJ.