Abstract A solar water pump for lift irrigation, which was shown to be economically viable, was proposed by Rao and Rao [5]. A “modified pump” is suggested, which is suitable for village water supply. The thermodynamic analysis of the pumps is presented. Though the solar water pump is intended to be operated with flat-plate collectors, it is analysed whether the pump could be run more efficiently when coupled with concentrating collectors. The analysis is also applicable for bellow actuated solar water pumps. Preliminary experimental studies showed that the heat losses are 2–3 times the theoretical energy requirement and the losses to the water tank shell accounted for a major part of the total heat losses. To reduce these losses, it is proposed that the inner surface of the water tank shell be lined with a resin bonded cork insulation. A method to evaluate the heat losses to the shell with insulation by solving the unsteady state heat conduction equation for a composite cylindrical body with time varying convective boundary conditions is presented. The heat losses are reduced to 5–15 per cent of the theoretical energy requirement with the use of the internal insulation. The major problem encountered in operating the pump was the inadequate condensation of the working fluid, which resulted in failure of the suction of water into the water tank. To ensure proper suction of water, the conditions to be maintained are analysed. The presence of water vapor and air in the spent vapor has to be taken into consideration while designing the condenser. An algorithm to evaluate the year round performance of the water-cooled pump for any location, given the lift and collector area, is presented. The cost of the water-cooled pump is compared with the costs of other types of solar water pumps and it is shown that the pump under consideration costs several times less than the other ones. The conditions at which the pump will be economical vis-a-vis diesel and electrical pumps are presented.