Abstract : Bahrain is facing rising electricity demands as a result of various factors such as population growth, rising urbanization rates and rising living standards in which the current rate of growth is projected to hit a demand peak of 9,500 MW by 2030. The fast-growing construction industry, in general, and residential buildings, in particular, create massive energy and environmental burdens to the country. Therefore, Bahrain has been setting a national renewable energy target of 5% by 2025. Thus, the aim of this study is to study the potential of photovoltaic systems in Bahrain's residential sector, with a focus on building rooftops. Southern New Town (Khalifa Town) has been chosen as a case study to investigate its utilizable rooftop areas for PV application and assess its energy production. The assessment of the rooftop area and the PV system modeling has been carried using AutoCAD and PVsyst software, respectively. We found that installing 17 kW -PV panels for each villa - with PV panels tilted 5%, due south - will produce , annually, 3,129 MWh for the 120 housing units, i.e., 44,953 MWh for 1,724 housing units (total number of villa in Khalifa Town), which is sufficient to meet about 43% of the total town's electricity needs. Such installation on rooftop will cut CO2 emission by 34,794 tons, i.e. reducing 21% of the town's total CO2 emissions. The financial analysis of such initiative (installing PV at roof top) indicates that it is considered as a decent investment only if the government (EWA) purchases each kWh generated from PV system for 29 fils, i.e. the tariff for commercial use. The payback under such incentive will be 9.6 years. However, if government purchases the unit at a cost equal to the highest subsided tariff for electricity for a household (3fils for monthly consumption of no more than 3,000 kWh) then the investment will be considered as a big loss since the payback period of the system will be about 84 years! Therefore, establishing feed-in-tariff policy (FIT), particularly assuring the payback is not more than 6 years, will encourage households to vastly install PV systems on their rooftop houses and consequently helping the country to meet its renewable energy target. It will also boost local PV manufacturing and hence creating more green - collar jobs. Such successful FIT policy will assure sustainability of the Khalifa Town and to the other existing and planned clean sustainable cities in the country.