California offers rebates of up to $1,875 for installing solar water heaters through the California Solar Initiative Thermal Program. To be eligible, homeowners must heat their water with gas or electric supplied by PG&E, SCE, SoCalGas or SDG&E. California also offers a property tax exclusion on solar water heaters as well as other renewable energy equipment.

The City of Palo Alto Utilities offers a Solar Water Heating Program, which provides incentives up to $1,500. The rebate amount is determined by the expected system performance, which is calculated through a Prescriptive Method.

Finally, the federal government will cover up to 30 percent of the system and installation costs through the Residential Renewable Energy Tax credit. This credit has to be used for your home, not for hot tubs or swimming pools.

You should contact program administrators of the different programs to find out how you can stack all three incentives to help cover as much of the solar water heater’s cost as possible. If you’re ready to get started, we’re happy to put you in touch with a solar contractor in the Silicon Valley area.