The present work analyzes water management strategies based on advanced desalination schemes powered by renewable energy sources. The framework for developing a decision procedure, which monitors water shortage problems and identifies the availability of renewable energy resources to power desalination plants, is presented. Cost of alternative solutions, taking into account energy cost or profits by energy selling to grid, is estimated. Emphasis is given to the market forces and the relationship of technology prices and market potential. A case study for the Aegean Islands in Greece is presented.