California is serious about solar. In 2006, California was the first state to set an aggressive initiative to place 3,000 megawatts of new, solar produced electricity systems on rooftops by 2017. Named the Million Solar Roofs Program, the state authorized funding for installing solar power systems on both new and existing buildings.

For residents, that means that the state will pay up to $2.50 per watt for solar power systems that are smaller than 100 kW, or a payment based on expected performance. For solar power systems greater than 100 kW in size, California offers homeowners a monthly rebate of 39-cents per kWh generated over a 5-year period.

California's three largest utilities – PG&E, Southern California Edison (SCE), and SDG&E – have instituted programs to manage these rebates with more utilities expected to administer similar programs by January 2008. Solar Hot Water Systems are not eligible through the California Solar Initiative.

California State law allows residents to take advantage of both upfront rebates and ongoing incentives as well. In California, solar photovoltaic systems that are up to 1-megawatt in size can take advantage of net metering, furthering your ability to not only reduce your initial installation costs, but also make some money for the excess power your photovoltaic power system may generate.

California publishes a consumer guide, Buying a Photovoltaic Solar Electric System which is available here. The guide walks you through sizing a system for your home, how much a solar photovoltaic system generally costs, and the rebates that are available. Although published in 2003, before Governor Schwarzenegger's $3.3 Billion, Million Solar Roofs Program, the guide still provides useful facts to guide your decision-making process.

In addition to the State incentives, many California utilities and local jurisdictions offer rebates or other financial incentives to residents who invest in solar power systems – photovoltaic and/or solar thermal. Although most rebates focus on solar photovoltaic and solar domestic systems, several organizations offer incentives for solar pool heating as well. Marin County offers residents in unincorporated areas rebates on solar photovoltaic, solar thermal, or solar pool systems.