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Incentives/Policies for Renewables & Efficiency

Printable Version
California Solar Initiative - Solar Thermal Program   

Last DSIRE Review: 11/06/2014
Program Overview:
State: California
Incentive Type: State Rebate Program
Eligible Renewable/Other Technologies: Solar Water Heat, Solar Space Heat, Solar Thermal Process Heat, Solar-assisted absorption chillers, (only non-residential solar pool heating), Solar Pool Heating
Applicable Sectors: Commercial, Industrial, Residential, Nonprofit, Schools, Local Government, State Government, Fed. Government, Multi-Family Residential, Low-Income Residential
Amount:Step 1 Incentive Rates (contact utility to determine current incentive levels):
Single Family Residential Incentives:
Systems that displace natural gas: $18.59 per estimated therm displaced
Systems that displace electricity or propane: $0.54 per estimated kWh displaced
Commercial/Multifamily Incentives:
Systems that displace natural gas: $14.53 per estimated therm displaced
Systems that displace electricity or propane: $0.42 per estimated kWh displaced
Solar Pool heating: $7.00 per estimated therm displaced
Maximum Incentive:Step 1 Incentive Limits (contact utility to determine current incentive limits):
Single-family residential systems that displace natural gas: $2,719
Single-family residential systems that displace electricity or propane: $1,834
Commercial and multifamily residential systems that displace natural gas: $500,000
Commercial and multifamily residential systems that displace electricity or propane: $250,000
Equipment Requirements:Residential systems must be certified to SRCC OG-300 by either SRCC or International Association of Plumbing and Mechanical Officials (IAPMO)
Solar collectors used in eligible commercial systems must be certified to SRCC OG-100 by either SRCC or IAPMO
Only non-residential solar pool heaters are eligible.
Installation Requirements:Systems must be installed by an appropriately licensed contractor who is listed as being eligible to participate in the program.
Self-installations are permitted if the building owner attends a designated CSI-Thermal Program training workshop.
Ownership of Renewable Energy Credits:Remain with customer
Program Budget:$325 million
Start Date:5/1/2010; incentives are available retroactively for systems installed after 7/15/09
Expiration Date:12/31/2017, or until the funds run out.
Web Site:
Authority 1:
Date Enacted:
Date Effective:
CA Public Utilities Code ยง 2860, et seq.
Authority 2:
Date Effective:
CSI Thermal Handbook
September 2013
Authority 3:
Date Enacted:
AB 2249

AB 1470 of 2007 authorized the creation of a $350 million incentive program for solar water heating systems. Of the $350 million in total funding, $25 million is reserved for low-income incentives, $225 million is for systems that will displace natural gas water heaters, and $100 million is set aside for systems replacing electric water heaters. Before developing the program, however, the California Public Utilities Commission (CPUC) had to wait for results from a pilot solar water heating program administered by the Center for Sustainable Energy (CSE) in the San Diego area. After reviewing the positive results of the pilot program, the CPUC developed rules for the statewide program and the program administrators began accepting applications retroactively on May 1, 2010 for single-family residential systems installed after July 15, 2009. Rebate applications for multifamily residential and commercial customers have been accepted since June 2010. CPUC Decision 12-08-008 of August 2012 established separate incentive rates for single-family residential systems and commercial/multifamily systems, each significantly higher than the rates previously available.

Originally restricted to just solar water heaters, the prorgam was expanded by CPUC Decision 13-02-018 in February 2013 to include other solar thermal technologies, including solar process heating, solar cooling, and non-residential solar pool heating. 

The program is being administered by Pacific Gas & Electric (PG&E), Southern California Edison (SCE), Southern California Gas Company (SCGC) and CSE on behalf of San Diego Gas & Electric (SDG&E).  There are different incentive levels depending on whether the solar water heating system displaces electricity, natural gas, or propane. Incentives for systems with a capacity of 250 kW-thermal or less will be paid upfront based on the OG-300 estimated first year energy savings. Larger systems will receive 70 percent of the incentive upfront, with the remaining 30 percent paid after 12 consecutive months, based on actual metered energy savings. Note, CPUC Decision 13-02-018 replaced the 70/30 split with a performance-based incentive which will make quarterly payments for a 2-year period based on metered energy output. This change will not take effect, however, until the new CSI Thermal Handbook is approved.  

Similar to the PV incentives offered through the California Solar Initiative, the incentives offered through this program will step down four times as installation milestones are met. Steps will decline separately in each service territory and for the four general customer classes.

Interested customers should contact the appropriate program administrator:

Pacific Gas and Electric:
Phone: (877) 743-4112

Center for Sustainable Energy (SDG&E territory):
Phone: (877) 333-SWHP

Southern California Gas Company:
Phone: (800) Gas-2000

Southern California Edison:
Phone: (800) 799-4177

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Disclaimer: The information presented on the DSIRE web site provides an unofficial overview of financial incentives and other policies. It does not constitute professional tax advice or other professional financial guidance, and it should not be used as the only source of information when making purchasing decisions, investment decisions or tax decisions, or when executing other binding agreements. Please refer to the individual contact provided below each summary to verify that a specific financial incentive or other policy applies to your project.

While the DSIRE staff strives to provide the best information possible, the DSIRE staff, the N.C. Solar Center, N.C. State University and the Interstate Renewable Energy Council, Inc. make no representations or warranties, either express or implied, concerning the accuracy, completeness, reliability or suitability of the information. The DSIRE staff, the N.C. Solar Center, N.C. State University and the Interstate Renewable Energy Council, Inc. disclaim all liability of any kind arising out of your use or misuse of the information contained or referenced on DSIRE Web pages.

Copyright 2014 - 2015 North Carolina State University, under NREL Subcontract No. XEU-0-99515-01. Permission granted only for personal or educational use, or for use by or on behalf of the U.S. government. North Carolina State University prohibits the unauthorized display, reproduction, sale, and/or distribution of all or portions of the content of the Database of State Incentives for Renewables and Efficiency (DSIRE) without prior, written consent.