The use of solar thermal collectors is an economic alternative for water heating in Lebanon. More than 100,000 m(2) of collector area has been installed while the market can accommodate more than 1.5 million M. The domestic sector, which is a main energy-consuming sector, stands to benefit the most from the implementation of such systems. Despite the lack of encouraging legislation, the solar thermal market has been continuously growing over the past decade. Both local manufacturers and importers have been active in the field. In addition, advanced forced circulation and collective systems are being used in large establishments, individual house and apartment buildings. Internationally funded demonstration projects using collective systems have been implemented in recent years with promising results. Simplified initial estimates indicate a payback period of 4-5 years while advanced mathematical models (RETScreen) indicate that the most advanced evacuated tube technology has a payback period of less than 9 years at current market prices. With decreasing cost per square meter of installed collectors, payback periods are expected to rapidly decrease. Regulatory support and tax breaks, if implemented, will have a positive effect on the market. The current increases in diesel prices are increasing demand on solar thermal water heaters. (c) 2005 Elsevier Ltd. All rights reserved.