This study focuses on investigating the impact and cost‐competitiveness of solar power in a highly hydropower‐driven northern energy system. The goal is to assess the role of rooftop photovoltaics (PV) in the Norwegian energy system toward 2050 under different energy transition pathways. Energy system analysis is conducted using the IFE‐TIMES‐Norway model, with an integrated detailed representation of rooftop PV based on the tilt and azimuth of existing rooftops in Norway. A thorough sensitivity analysis is conducted to illustrate how investment in rooftop PV varies under different system and parameter conditions and to disclose important barriers for PV in similar energy systems. The results show that when PV investments are facilitated, solar power can potentially stand for 56% of all new investments, resulting in a share of 10% of the total electricity generation. With less competition from onshore wind power and favorable investment parameters, especially lowering the demand for the rate of return, the investments in PV will be four times higher and reach their full potential in commercial and apartment buildings by 2050. Additionally, the results highlight that the cost parameter functions as a barrier to other solutions that facilitate increased PV investments, such as flexibility and energy storage.