Solar and wind energies are likely to play an important role in the future energy generation in Oman. This paper utilizes average daily global solar radiation and sunshine duration data of 25 locations in Oman to study the economic prospects of solar energy. The study considers a solar PV power plant of 5-MW at each of the 25 locations. The global solar radiation varies between slightly greater than 4kWh/m²/day at Sur to about 6kWh/m²/day at Marmul while the average value in the 25 locations is more than 5kWh/m²/day. The results show that the renewable energy produced each year from the PV power plant varies between 9000MWh at Marmul and 6200MWh at Sur while the mean value is 7700MWh of all the 25 locations. The capacity factor of PV plant varies between 20% and 14% and the cost of electricity varies between 210 US$/MWh and 304 US$/MWh for the best location to the least attractive location, respectively. The study has also found 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.