The objective of the present study was to evaluate the effect of solar heating system on the microclimatic conditions of sweet colour pepper greenhouse during winter season of 2009-2010. The use of solar energy system for greenhouse heating in winter and cold days helps to save fossil fuels and conserve green farm environment on the one hand, and on the other, enhances the quality of greenhouse products, reduces production costs and limits the release of greenhouse gases. Temperatures of inside and outside air, solar radiation flux incident, and air relative humidity of inside and outside for the last five years at nighttimes have been collected and used to calculate the total heat losses from the greenhouse. Using this data the solar collector area and collector configuration were calculated so that the optimal surface area of solar collectors was found to be 4 m2 that adequate to heat the sweet colour pepper crop greenhouse. The thermal performance analysis was experimentally determined, by measuring the temperature increase at various water inlet temperatures and intensity of solar radiation, under clear sky conditions. A complete solar heating system (two solar collectors and storage tank) was utilised for heating 300 litres of water. The daily average overall thermal efficiencies of the solar collector and the storage system during the experimental period were 71.3% and 91.3%, respectively. Over a 181 days season the solar heating system collected 3813 kWh of energy or 70.5% of the total heat energy required to heat the greenhouse (27.234 kWh). This percentage could be increased by reducing heat losses from the greenhouse. Due to the microclimatic conditions of the greenhouse were at or around the desired level, the sweet colour pepper had have optimal vegetative growth rate, stem length, number of fruits being seated, and fresh yield. The total costs per square meter of greenhouse were L.E. 56.1.The fresh yield of sweet colour pepper was 5.931 kg/m2, which sold by L.E. 80.1, consequently, the estimated return on capital was 42.8% per annum.