Abstract A linear relation between the efficiency of solar ponds and factor θ d H which is the temperature difference between the pond bottom and the ambient divided by the average insolation is presented. This relation, which has been developed based on a steady state analysis provides valuable information on the relative importance of the parameters involved in the operation of solar ponds. It is found that the existence and the thickness of the top convective zone has a profound negative effect on the yield of solar ponds. The optimum thickness of the density gradient layer under various conditions is also presented. The effect of ground losses is discussed, and it is shown that for the case of wet soil, especially if the level of the underground water is high, the pond should be thermally insulated. It is also shown that the steady state analysis can predict with good accuracy the yearly average response of solar ponds under transient conditions.