Solar energy installations in deserts are on the rise, fueled by technological advances and policy changes. Deserts, with a combination of high solar radiation and availability of large areas unusable for crop production are ideal locations for large solar installations. However, for efficient power generation, solar infrastructures use large amounts of water for construction and operation. We investigated the water use and greenhouse gas (GHG) emissions associated with solar installations in North American deserts in comparison to agave-based biofuel production, another widely promoted potential energy source from arid systems. We determined the uncertainty in our analysis by a Monte Carlo approach that varied the most important parameters, as determined by sensitivity analysis. We considered the uncertainty in our estimates as a result of variations in the number of solar modules ha–1, module efficiency, number of agave plants ha–1, and overall sugar conversion efficiency for agave. Further, we considered the uncertainty in revenue and returns as a result of variations in the wholesale price of electricity and installation cost of solar photovoltaic (PV), wholesale price of agave ethanol, and cost of agave cultivation and ethanol processing. The life-cycle analyses show that energy outputs and GHG offsets from solar PV systems, mean energy output of 2405 GJ ha–1 year–1 (5 and 95% quantile values of 1940–2920) and mean GHG offsets of 464 Mg of CO2 equiv ha–1 year–1 (375–562), are much larger than agave, mean energy output from 206 (171–243) to 61 (50–71) GJ ha–1 year–1 and mean GHG offsets from 18 (14–22) to 4.6 (3.7–5.5) Mg of CO2 equiv ha–1 year–1, depending upon the yield scenario of agave. Importantly though, water inputs for cleaning solar panels and dust suppression are similar to amounts required for annual agave growth, suggesting the possibility of integrating the two systems to maximize the efficiency of land and water use to produce both electricity and liquid fuel. A life-cycle analysis of a hypothetical colocation indicated higher returns per m3 of water used than either system alone. Water requirements for energy production were 0.22 L MJ–1 (0.28–0.19) and 0.42 L MJ–1 (0.52–0.35) for solar PV–agave (baseline yield) and solar PV–agave (high yield), respectively. Even though colocation may not be practical in all locations, in some water-limited areas, colocated solar PV–agave systems may provide attractive economic incentives in addition to efficient land and water use.