In this paper, the development and testing of a new type of efficient solar dryer, particularly meant for drying vegetables and fruit, is described. The dryer has two compartments: one for collecting solar radiation and producing thermal energy and the other for spreading the product to be dried. This arrangement was made to absorb maximum solar radiation by the absorber plate. In this dryer, the product was loaded beneath the absorber plate, which prevented the problem of discoloration due to irradiation by direct sunlight. Two axial flow fans, provided in the air inlet, can accelerate the drying rate. The dryer had six perforated trays for loading the material. The absorber plate of the dryer attained a temperature of 97.2 degrees C when it was studied under no load conditions. The maximum air temperature in the dryer, under this condition was 78.1 degrees C. The dryer was loaded with 4 kg of bitter gourd having ail initial moisture content of 95%, and the final desired moisture content of 5%, was achieved within 6 h without losing the product colour, while it was 11 h for open sun drying. The collector glazing was inclined at a particular angle, suitable to the location, for absorption of maximum solar radiation. A detailed performance analysis was done by three methods, namely 'annualized cost method', 'present worth of annual savings' and 'present worth of cumulative savings'. The drying cost for 1 kg of bitter gourd was calculated as Rs. 17.52, and it was Rs. 41.35, in the case of an electric dryer. The life span of the solar dryer was assumed to be 20 years. The cumulative present worth of annual savings over the life of the solar dryer was calculated for bitter gourd drying, and it turned out be Rs. 31659.26, which was much higher than the capital cost of the dryer (Rs. 6500). The payback period was calculated as 3.26 years, which was also very small considering the life of the system (20 years). So, the dryer would dry products free of cost during almost its entire life span. The quality of the product dried in the solar dryer was competitive with the branded products available in the market. (C) 2008 Elsevier Ltd. All rights reserved.