This study investigates a novel integration of a circulated permeate gap membrane distillation (C-PGMD) module with flat plate solar collectors. The investigation is performed through a comprehensive performance study and techno-economic analysis, revealing unique insights and findings. The development of mathematical models enables the anticipation of system production and energy efficiency, capturing the employment of single and multistage C-PGMD modules under diverse design and operational conditions. Additionally, an innovative assessment of different powering modes, including solar-only, electrical-only, and hybrid solar-electrical is performed, which offers a unique perspective on system control and unit production costs. Results showed that circulating the permeate gap has significant effects on the permeate flux and the temperature of the solar tank such that the circulation rate controls the operation of the system. The revelation that increasing solar collector numbers amplifies productivity while reducing costs stands out as a noteworthy breakthrough. Cooling the system using a water source at ambient temperature is much recommended compared to cooling with chilled water. The pinnacle of this research lies in the proposal of a well-designed pilot hybrid-power 30-stage C-PGMD system, showcasing a remarkable achievement in reducing production costs to approximately 0.03 USD/Liter for 24-hour operation, predominantly powered by renewable energy sources. These novel findings redefine the landscape of integrated solar membrane distillation and pave the way for more sustainable and economically viable water desalination solutions.