This study is aimed at finding the prospects of wind energy utilization for decentralized applications in Sultanate of Oman. The study is based on an economical comparison for small power applications between diesel engine generators sets and wind turbines at the selected sites. It is for representative rural areas where wind regime is high. Also, the study extends to carrying out an economic comparison between using wind pumps and diesel pumps for the purpose of water irrigation in a selected farm. Different types of different power rating wind turbines are used in the study. Also, hourly wind data and typical daily load profile of the selected sites are used in the assessment. The study has shown that wind turbines can be used as a fuel saver in the selected sites. The savings found for the whole study period of 20 years on the total net present worth using wind with diesel system is 32 million US$ and 0.323 million US$ in Masirah and Mathura respectively. The levelized cost of installing wind turbines within the diesel system is 0.105 US$/kWh using Vesta 100 and 0.151 US$/kWh using PGE 25 for Masirah and Mathura respectively. Also, study shows that the total annualized cost of installing wind pumps for irrigating a selected farm is 1,368 US$ or 2,067 US$ if one-day storage tank is added as a water storage. The total annualized cost of using a diesel pump for irrigating the same farm is 3,736 US$.