Rapid urbanization is increasing the amount of hilly communities around many large cities; therefore, saving water pumping energy deserves significant priority. This work proposes optimized rooftop rainwater harvesting systems (RRWHSs) and provides an energy-saving approach for hilly communities. The most cost-effective rainwater tank volumes for different dwelling types are calculated using marginal analysis. The case study at Hua-Chan Community in northern Taiwan indicates that the optimum rainwater tank volumes range from 5 m(3) to 10 m(3) according to the type of dwelling. The results also reveal that rainwater harvesting becomes economically feasible when both energy and water savings are addressed together. Furthermore, the cost of unit energy saving from RRWHSs is lower than that from solar PV systems. Hence, RRWHSs provide not only water savings, but also as an alternative renewable energy-saving approach to address the water-energy dilemma caused by the ever-growing hilly communities. (C) 2008 Elsevier Ltd. All rights reserved.