The electric energy demand in Lebanon is estimated to grow at an average of 3-5% per year for the coming 10 years. Such an increase in energy demand is problematic for Lebanon, since its economy is almost totally dependent on imported fuel, which contributes 97% of the overall energy requirements. Solar water heaters (SWH) are regarded as the most important element in a long term energy conservation and management strategy for this country, but their promotion is a national issue requiring the participation of many stakeholders and decision makers. Additionally, the success of solar energy penetration into the existing energy market is constrained by many factors such as technical and financial limitations, decision criteria and policy instruments. This paper will explore the feasibility of SWH and will work out, using the analytic hierarchy process technique, a policy to ensure a large scale diffusion of SWH in the energy market.