For the majority of the Greek islands, water resources are quite restricted, limiting the economic development of the local societies. To face increased potable water requirements, more than 2,500,000 m(3) of clean water is transferred annually to these islands at a cost approaching the value of 7 Euro/m(3). On the other hand, the final cost of the locally produced water from renewable energy sources (RES) based desalination plants is expected to be quite lower than this value. The main purpose of the present study is to examine the economic viability of several representative desalination plant configurations based on the available renewable energy sources using an integrated cost-benefit analysis. In the proposed analysis all the cost parameters of the problem are taken into consideration, including the capital cost of the desalination plant, the annual maintenance and operation cost, the energy consumption cost, the local economy annual capital cost index and the corresponding inflation rate. The calculation results obtained definitely support the utilization of RES-based desalination plants as the most promising and sustainable method to satisfy the fresh, potable water demands of the small- to medium-sized Greek islands at a minimal cost, without disregarding the considerable environmental and macro-economic benefits.