Utilizing solar radiation data of 25 locations in Oman, RETScreen software is used to study the economic prospects of solar energy. A solar PV power plant of 5-MW is considered at each of the 25 locations. The results show that the renewable energy produced each year from the PV power plant varies between 9000 MWh at Marmul to 6200 MWh at Sur while the mean value is 7700 MWh of all the 25 locations. The capacity factor of PV plant varies between 20% and 14% and the cost of electricity varies between 210 $/MWh and 304 $/MWh for the best location to the least attractive location, respectively. The study shows that the PV energy at the best location is competitive with diesel generation without including the externality costs of diesel. Renewable energy support policies that can be implemented in Oman are also discussed.