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 Homeowners

Do you know the average San Diego household consumes 45 gallons of hot water every day? Discover the advantages of heating your home's water with solar water heating (SWH).

Solar Water Heating Uses at Home

Showering, washing dishes, running the clothes washer and other daily activities require significant amounts of hot water. The advantage is that with solar water heating, the energy used comes from a clean source instead of from burning natural gas.

Solar Water Heater Compatibility

Solar water heating systems are compatible with all common types of water heaters, including tankless or on-demand water heaters. You do not need to replace your existing water heater when you install a solar hot water system and you can replace your existing water heater in the future without affecting your newly installed solar water heating system. For homes with tankless water heaters, your contractor can recommend a system that will work best with your tankless water heater.

The Benefits of Solar Water Heating 

By capturing the warmth of the sun to help heat their water with solar water heating (SWH), San Diego homeowners reap numerous benefits:

Rebates for Homeowners


Incentive per annual therm displaced

Maximum incentive single-family residential projects







Rebate amounts are based on the number of therms your new solar water heating system is expected to displace over one year. Your rebate amount also will consider the system's orientation on your roof and the amount of shading from surrounding trees or structures.

Sample Residential Cost

Average cost of a residential solar water heating system


Average CSI-Thermal rebate




30% federal tax credit ($3,800 x30%)


Net system cost to homeowner


Solar water heating systems vary in price, with a typical residential system costing around $7,000. With the help of rebates from the California Solar Initiative (CSI)-Thermal Program as well as the 30% federal investment tax credit, the cost of installation drops to around $2,660.


Sample Income-Qualified Cost

Average cost of residential solar water heating system


Average CSI-Thermal income-qualified rebate




30% federal tax credit ($3,800 x30%)


Net system cost to homeowner


The CSI-Thermal Program offers special rebates for income-qualified, single-family homeowners in the SDG&E service area. For these customers, the rebate amount increases to $36.90/therm and up to a maximum $5,397 for a system.

Financing Your Solar Hot Water System

Income-Qualified Rebates

Income-qualified customers are eligible for higher rebate amounts of up to $5,397. To qualify for this rebate level, you must have participated in the Low-Income Weatherization Program (LIWP), Low-Income Home Energy Assistance Program (LIHEAP) or Energy Savings Assistance Program (ESAP). Applicants must be able to show that your property is subject to either a resale restriction or equity sharing agreement.

Check Eligibility


Low-income homeowners are welcome to self-install their solar water heating system, provided they complete a free Contractor and Self-Installer workshop and meet other eligibility guidelines. Please review the steps to becoming a qualified self-installer and sign up for our upcoming contractor workshops.

View Upcoming Workshops


For more information on income-qualified rebates, please review Section 2.2 of the CSI-Thermal Handbook.

Claiming Your CSI-Thermal Rebate

Once you choose a contractor, make sure to determine who will receive the rebate check: the homeowner or the contractor. There are two options.

  1. The homeowner may choose to pay the contractor’s fees in full upfront, in which case, the CSI-Thermal rebate check will be sent to the homeowner.
  2. The homeowner may pay the contractor the cost of the solar water heater installation minus the expected rebate; the rebate check will then be sent to the contractor as final payment. CSE recommends this option.

Claiming Your Rebate as a Self-Installer

If you’re a self-installer, you will apply for the rebate yourself through You will receive an access key to set up an account on the website upon completing the free Contractor and Self-Installer Workshop.

Resources For Homeowners

The following resources provide more information about rebates through the CSI-Thermal Program in SDG&E territory: