The rapid growth in energy demand is causing pressure on the energy supply side in Bhutan especially in Winter when the hydropowers are at their minimum. On the other hand, renewable energy like solar energy is higher in Winter due to the clear sky compared to Summer. Keeping this in mind this study conducts economic analysis by comparing discounted life cycle costs of solar water heater of three different sizes against equivalent electrical geysers for hoteliers in Bhutan by taking into account the time value of money and other economic factors.The study also explores the potential areas where Solar Hot water system can be utilized in Bhutan.