The commercial sector in Uganda accounts for about 20% of the total electrical energy consumed in the country, with about 50% consumed in the domestic sector and the remaining 30% to the industrial sector. As the economy continues to grow due to attraction of foreign investment and improvement in local production, more challenges now come up in terms of sustaining the already-attained levels of development and social transformation. It is known that Uganda has only 300 MW of installed electric power capacity. This power is insufficient and could be used better - it is estimated that about 40 MW of the total load is allocated to water heaters. Among the energy-saving schemes being implemented in the commercial sector to avoid or reduce load shedding and to reduce the use of costly generators is the use of Solar Water Heaters (SWHs). A case study on the use of solar water heating in a three-star hotel as a means of implementing an energy saving scheme is presented and an economic analysis of the project is given. Finally, future prospects of use of solar thermal technologies in the commercial sector as a means of energy conservation and as a solution to some of the environmental concerns under Clean Development Mechanisms (CDM) are presented.