The electricity demand of Bahrain has been increasing rapidly in the recent years. At the present growth rate, the electricity peak demand is expected to reach 9500 MW by 2030. The cost of conventional generation in Bahrain, based on natural gas is comparatively high. The nature of the solar resource and energy demand in Bahrain is suggestive of large scale photovoltaics having significant potential for meeting the country’s future electricity demand. The economic performance of a 1 MW grid-connected photovoltaic (PV) system optimised for matching the daily peak load in Bahrain is analysed in this work in terms of levelised cost of electricity (LCOE), net present value (NPV), payback period (PBP) and energy payback time (EPBT). Results show a positive trend indicating that large scale photovoltaics could be a viable alternative for meeting future electricity demand. Even at current PV system prices the LCOE for the system designed was 43% less than the present actual cost of a kWh in Bahrain.