In recent time, Bhutan as a small landlocked nation between China in the north and India in the south started to experience a gap in hydro electricity supply and demand. To address the growing electricity demand in the country, solar energy can be a diversification of Bhutan's renewable energy to address domestic energy security and global environmental concerns. In this paper, efforts have been made to assess the future energy potential from the rooftop solar photovoltaic (PV) systems in Thimphu City. For this study, we designed and simulated a 12 kWp grid-tied solar PV systems using PVSYST software. The result showed the annual solar energy generation, final energy yield and performance ratio (PR) of 19,336 kWh, 4.63 kWh/kWp and 84 % respectively. The estimated final energy yield and PR aligned with findings from countries like Saudi Arabia, India, and Pakistan, highlighting the strong solar energy potential in Thimphu. In addition, we conducted simple scenario analysis for energy generation potential when PV systems are installed on 90 %, 75 %, and 50 % of the available building rooftops in Thimphu City. The additional annual solar energy injected into the grid during lean hydropower generation periods was 61 GWh, 51 GWh, and 34 GWh for the three scenarios, respectively. Furthermore, the projected annual cost savings on electricity imports from additional energy generation from grid-tied rooftop solar PV systems was $3.23 million, $2.70 million, and $1.80 million across the three scenarios, using import price figure of 2023. Additionally, installing 12 kWp PV systems on 50 % of building rooftops in Thimphu City alone could result in environmental cost savings of $1.91 million during periods of low hydropower generation. The study is expected to benefit the government agencies, other institutions and individuals interested in solar energy generation using solar PV technology.