Powering thermal desalination technologies by renewable energy is believed to be a viable solution to overcome the worldwide freshwater scarcity problem without causing more damage to the environment. In this paper, a multi-effect distillation system (MED) with mechanical vapor compression is powered by the generated electrical power of photovoltaic/thermal collectors and assisted by the by-product thermal power generated. The system is sized according to thermal power needed and designed for small-scale application and weather conditions of Alexandria, Egypt. Excess electricity is injected into the grid and hot water storage tank is used as a back-up to compensate low and fluctuating radiation. Results show that, at a saturation temperature of MED’s heating steam of 55 °C, freshwater production is 11.1 m3/day in 10 hours of operation, system specific power consumption is 9.72 kWh/m3, specific area is 317.04 m2s/kg, and performance ratios of the desalination unit is 3.33 and 6.97 for the overall system. However, at T = 65 °C the system’s electrical energy is totally absorbed by the compressor, and the system’s performance decreases.