Solar electricity produced by concentrated photovoltaic (CPV) solar cells is an alternative renewable energy technology for sustainably providing the world's future energy requirements. Although the technology is relatively recent, it could potentially become viable in regions with high direct irradiance levels, such as the Mediterranean region. The main objective of this feasibility study is to investigate whether the installation of CPV parks in the Mediterranean region is economically feasible. The study takes as an example the available solar potential of the island of Cyprus as well as all available data concerning the current renewable energy sources policy of the island. In order to identify the least cost-feasible option for the installation of 1 MW CPV park, a parametric cost–benefit analysis is carried out by varying the CPV park capital investment, the discount rate and the CO2 emission trading scheme price. The results indicate that in the case where no feed-in tariff scheme is available, the capital expenditure of the CPV park is a critical parameter for the financial viability of the project.