An apparatus and method is disclosed for an improved air conditioning system for admitting air from an exterior space, adjusting the temperature and humidity of the exterior air, delivering the adjusted air to an interior space of a structure, removal of exhaust air therefrom and return of the exhaust air to the exterior space and wherein a regenerative desiccant is provided for removing water vapor from the air to be delivered to the interior space and delivering the water vapor to the exhaust air stream and a heat exchanger is provided for removing sensible heat from the air to be delivered to the interior space and transferring the sensible heat to the exhaust air stream. The apparatus combines for the first time electric air conditioning reheat and solar energy with desiccant technology, thereby furnishing conditioned air at an 80% reduction of energy cost. The apparatus for the first time allows the use of waste oil heat to furnish conditioned air at an 80% reduction in energy cost. Additionally, natural gas or propane gas may be used at a great reduction in energy cost vs. electrical cost. The apparatus allows the reduction in electrical power presently used to condition air for use in a given space.