AbstractThis research investigated the performance of a solar‐assisted heat pump dryer (SAHPD) with heat recovery to reduce the amount of thermal energy needed for drying chili peppers. The dryer selected for the experimental study consisted of a heat pump, a greenhouse cover and multi trays. It was found that the SAHPD with recovery gave better drying performance than a traditional dying method. The dryer system can offer drying time, drying efficiency, coefficient of performance and specific energy consumption of approximately 24 hr, 33.2%, 3.17, and 2.21 kWh/kg, respectively. Furthermore, the SAHPD with heat recovery provided a higher drying performance than without the heat recovery although the ambient condition changed. Base on the economic analysis, the payback period and net present value of the SAHPD with heat recovery were approximately 1.9 years and 915.60 USD. The SAHPD with two drying rooms also yielded better drying performance than the SAHPD with one room.Practical applicationsDrying is the process of moisture reduction to a safe limit of moisture content, which allows agriculture to extend the shelf life of the crops by restraining the growth of microorganism. In chili peppers drying process, a solar assisted heat pump drying as one of hybrid solar dryers is preferred because heat and mass transfer rate are rather high and it offers the ability to operate both daytime and nighttime. However, the exhausted air to the ambient still has considerable thermal energy. Thus, the heat recovery system has been employed to design and fabricate inside the dryer. Findings of this research contribute to the evaluation of heat recovery in a typical solar assisted heat pump dryer in terms of drying efficiency and economic feasibility in order to be a guideline for small and medium‐sized enterprises.