This study aims to reveal the economic, technical, and environmental impacts of different system configurations (centralized or decentralized, components, and technologies) on transition plans to achieve a higher share of renewable energy and desalination supplies for regions facing water scarcity. The main contribution of this research is the comparative evaluation of on-grid decentralized or distributed renewable-powered desalination systems for sustainable water and energy supply planning. Applying a novel nexus approach, an interactive multi-period planning model is developed to highlight synergies and to identify conflicts of planning both energy and water sectors at the same time as endogenous subsystems of one overall system. For studying these synergies in this study, the pace of technology deployment and the path of decline in overall costs are assumed to be a function of experience and knowledge as two-factor learning curves. Using data from 81 projects, the levelized cost and capacity factor of utility-scale photovoltaic and wind supplies in the Middle East were calculated. The results indicate that a scenario with a decentralized water sector and renewable-powered multiple-effect distillation technology has the best overall performance among the proposed scenarios.