Abstract In this article, we present an updated potential of distributed photovoltaics in cities in Chile, which is one of the most promising regions for solar energy utilization because of high insolation, high energy costs and rapid urbanization. The study is based on detailed analysis of the spatio-temporal solar potential including load matching in a southern Chilean city, which is then extrapolated to all cities with more than 15,000 inhabitants. In addition, we estimate the cost-effectiveness of such solar city schemes. Our results show that in the city of Concepcion PV could cover up to 90% of the annual electricity demand. On national scale, cities could on average produce 83% of their annual electricity demand, but in the northern part this could exceed even 100%. If scaling the PV yield from distributed PV in cities to whole Chile that would correspond to 22% of country’s electricity demand. The cost (LCOE) of PV in cities seems to be cost-effective against grid electricity, i.e. in the Chilean context PV has already reached grid-parity in cities.