One benefit of rooftop solar is reduced transmission losses, but that isn’t usually enough to offset the costs from small scale/custom installation work. People like having them on their own rooftops for self-reliance, to flex on their neighbors, and to feel like part of the solution to climate change.

those aren't strictly "economic" reasons.

Economic for who?

Solar farms charge us grid retail prices everyday. Here in Australia, my payback time on home installed solar ended up to be 3.5 years. Not a bad investment.

for the economy as a whole. In the US, would anyone other than Prius drivers install solar panels if there were no tax credit?

For two basic reasons:

- the home owner owns the roof top and it is already there and unused, for a solar farm, the energy company needs to find and acquire land.

- the home owner uses most of the produced electricity at cost rate, a grid company has a lot of additional costs a home owner does not have, like operating a grid, ensuring service 24x7.

land is cheap. especially in the desert where there's lot of sun, and not much else.

"Not much else", like no customers for the electricity produced? /s. Yes, there are regions for example in the US, where putting up solar cells would be very cheap. But then you have to run power lines to where your customers are. That can be 1000 kilometers or more. Doable, but that certainly affects the economy of things. And yes, I think the US should put large solar farms into its deserts. And of course, there are countries, where land is not cheap and there might not even be deserts. Here in Germany for example, basically all land is somehow used.

Same reason you have heating units in your house/building rather than at a municipal heating plant … people want to buy self-sufficiency for their house/building, and it's easier than scoping/building large-scale projects and running wires and dealing with municipalities.

self-sufficiency has a cost, hence my "economic" question. Also, steam transmission is way less efficient than electricity transmission.

It does appear people are willing to pay those costs :)

Also, electricity transmission appears to be much more expensive than generation. On my PG&E bills in California, delivery costs 2.5x as much per kWh as generation for 100% renewable power.