This paper presents energy and exergy analysis of a solid desiccant vapour compression hybrid air conditioning system. Parametric study has been conducted at varying dead state properties and operating conditions to investigate their effects on the overall system performance. The obtained results show that the exergy efficiency of hybrid air conditioning system is 11.45%. The energy-based performance parameters such as the coefficient of performance (COP) and components effectiveness are also presented. The rotary desiccant dehumidifier and heater are found as major contributors to exergy performance of the system. The analysis provides us beneficial knowledge to determine theoretical upper limit of the system performance. © 2016 Inderscience Enterprises Ltd.