Similar to many countries that have low electricity prices, households in Saudi Arabia are not encouraged to invest in photovoltaics (PV). The local utility, however, is interested in having decentralized power generation. We developed a tool, which is able to simulate residential loads and show the financial conditions needed to entice households to invest in grid-connected PV. In our case study, - Households in Saudi Arabia today will not invest in distributed PV from an economic point of view, and thus incentives are required to facilitate investment. Using a baseline electricity price and different combinations of feed-in tariffs and subsidies, as much as 1.6 kW of PV capacity would be installed in a 10-m2 area; additional capacity may be installed if the rooftop area is less restrictive. - We examine a time-of-use (TOU) tariff where household electricity price is only higher when PV would operate. Price are maintained at their current levels for other hours. - Depending on the design of incentive packages, the TOU price would cause a household would choose between selling the electricity to the grid and using it to meet local loads. A lower subsidy coupled with higher feed-in tariff will result in the sale of electricity to the grid instead of being consumed locally.- The resulting incentives have practical implications, as the choice and proportion of each measure will affect the budget of the parties involved, i.e. utilities versus government.