Solar Water Heating for Multifamily and Commercial

The California Solar Initiative – Thermal Program is scheduled to sunset on July 31, 2020. At that time, no new residential, commercial or multifamily applications will be accepted. For questions about the incentive or application deadline, we encourage you to contact CSE’s solar thermal team via email.

Solar Water Heating for Business and Property Owners

The California Solar Initiative–Thermal Program is no longer accepting new incentive applications. If you are a contractor or property owner with a project in review or due payment, refer to the Active Applicants page.

Solar water heating is a great way for commercial and multifamily residential properties to lower operating costs and reduce their environmental impacts. There are many benefits of installing solar water heating, including saving up to 80% on water heating costs and appealing to eco-conscious consumers.

Solar Water Heating in Action

Almost every business uses hot water, whether it’s for hand sinks and showers or high-volume commercial dishwashers, heavy-duty laundries, pools or industrial processes. With solar water heating systems, savings come from lower utility bills with the added benefit of fewer emissions.

By displacing much of the natural gas currently used for water heating, businesses like hotels, laundromats, restaurants and apartment complexes have found this green alternative to be a valuable next step toward achieving more sustainable operations.

Another important benefit of solar water heating is its seamless application to diverse businesses. Hotels, gyms, restaurants, process plants and other businesses can realize the benefits of solar thermal technology in a variety of ways.

  • Domestic hot water for bathing, dishwashing, laundry, cleaning, etc., suitable for multifamily properties, hotels and laundromats.
  • Pool and spa heating, perfect for multifamily properties, hotels, gyms and community centers.
  • Space heating and cooling to warm up your building while cooling down your energy bill.

Save on Solar Water Heating Installation

Eligible commercial and multifamily property owners may also be able to reduce their business’s tax liability through the federal business energy investment tax credit (ITC) and accelerated depreciation.

26% federal tax credit

Businesses and multifamily properties may be able to claim the ITC. This federal tax credit covers up to 26% (2020 rate) of the cost of a new solar water heating system, including equipment and installation. Please note that beginning in 2020, the credit has begun to step down.


Available Tax Credit







2022 and on


For questions regarding the tax credit, speak with your company’s tax professional.

Accelerated Depreciation

Established in 1986, federal accelerated depreciation standards set by the Modified Accelerated Cost Recovery System (MACRS) have helped businesses make critical investments in long-term renewable energy. Solar water heating systems are eligible for MACRS, which may allow your business to further reduce the cost of a SWH system. We suggest consulting your tax professional to see if you can take advantage of the accelerated depreciation tax credit.

Financing your commercial SWH system

Enterprises interested in bringing solar water heating technology to their properties have several financing options to defray the initial investment costs. In the SDG&E territory, solar financing is available in a variety of forms for businesses and commercial properties. Among the options available are property assessed clean energy (PACE) loans, local credit union energy loan programs and third-party ownership agreements (power purchase agreement).

Other resources for commercial and multifamily property owners