Solar-powered membrane distillation (SP-MD) technology has proven to be an ideal solution for providing fresh water in remote and off-grid locations. In this study, a novel solar energy-driven direct contact membrane distillation (DCMD) cycle is proposed in which a nanofluid-based volumetric absorption solar collector (VASC) is used to drive the DCMD process. The present work focuses on the use of volumetric collector instead of commercially available surface absorption-based solar collector in case of two-loop indirect SP-MD systems, which are installed to control the scaling and corrosion issues in solar collectors. The thermodynamic performance of this two-loop indirect solar-powered DCMD (SP-DCMD) system has been evaluated with the help of a mathematical model prepared in MATLAB. For modeling the DCMD unit, the ε-number of transfer unit (NTU) method used for designing heat exchangers has been employed. The performance of the overall system is evaluated by gained output ratio (GOR), thermal efficiency (η) of the membrane distillation, and water flux (Jw), and effects of various operating parameters related to both DCMD and VASC systems have been understood on the overall system performance. Finally, it has been shown that VASC-driven DCMD system has been approximately 4–15% higher gained output ratio compared to surface absorption-based solar collector (SASC)-driven DCMD system under similar operating conditions. Copyright © 2022 by ASME.