CPAU Solar Water Heating Program

Installing a Solar Water Heating system is a great way to generate hot water for your home or business.  Solar water heaters can be used in any climate, and the fuel they use - sunshine - is free.  Environmental benefits of solar water heating include reducing your family's carbon footprint by limiting greenhouse gas emissions associated with use of natural gas.  Financial benefits include saving money on your utility bill through reduced natural gas or electric water heater charges and protecting yourself against future gas or electricity price increases. 

 Money Grapnic leaf CO2 Graphic 
Save Money Conserve Energy  Reduce Greenhouse Gases
 Save up to 75% on your home's water heating costs  Sunlight is abundant, free, forever renewable, and inflation-proof  Reduce your carbon footprint and be part of the solution

How does solar water heating work?

Solar water heating (SWH) systems use the energy of the sun to heat water. This is different from photovoltaic or electric solar systems that use the energy of the sun to create electricity. A solar water heating system includes a storage tank and solar collector(s). Solar collectors are typically placed on your roof top so that the sun can heat the water before sending it to your water heater or a storage tank. Most solar water heaters require a well-insulated storage tank. Solar storage tanks have an additional outlet and inlet connected to and from the collector. In two-tank systems, the solar water heater preheats water before it enters the conventional water heater. In one-tank systems, the back-up heater is combined with the solar storage in one tank.  Watch the solar water heating for homeowners video to learn more. 

Solar Water Heating Rebates

The Center of Sustainable Energy administers the City of Palo Alto's solar water heating program (SWHP). Rebates are available for residential, commercial, and industrial customers of CPAU.  To be eligible, applicants must purchase a new qualifying SWH system and be able to provide a copy of a CPAU bill. Solar pool heating systems are not eligible for this program.

Incentives available through the City of Palo Alto's SWHP

  Single Family    Multifamily - Commercial     Multifamily - Low income 
Natural Gas Displacing Systems $18.59/therm $14.53/therm   $19.23/therm
Electric/Propane Displacing Systems
 $0.54/kWh $0.42/kWh  $0.56/kWh

In addition to the incentive provided by CPAU, you are eligible for a federal income tax credit. An individual can take a 30% credit for a qualifying solar water heating system through the end of 2019.
The tax credit then reduces every year until it is reduced to 10% in 2022. 

Maximum Rebates:

  • For residential systems, the maximum rebate is $2,719 for natural gas displacing systems and $1,834 for electric or propane displacing systems.
  • For larger systems, the maximum incentive is $100,000.  To estimate your incentive, use the online calculator tool.

Customers may choose from a list of  eligible contractors, who have been pre-qualified to participate in the program, or install the systems themselves. Participating SWH contractors and self-installers must attend a one day training offered by either CPAU or PG&E to qualify.

Ready to get started?

Look for tips on finding a contractor.

Solar Water Heating Resources

Below are a variety of resources that will help residents decide whether solar water heating is right for their home.  The SWH program handbook offers in-depth information about the program and design and technical aspects of a SWH system.  Your contractor is required to complete the forms listed in the rebate application forms section. If you have any questions, feel free to contact us for additional assistance by calling (866) 611-CPAU or sending an email to Solar Water Heating Resources

Resources for Customers

Resources for Contractors and Self-Installers

CPAU Solar Water Heating Program Application Forms


Please don't hesitate to contact us for any questions you have related to the CPAU Solar Water Heating program:

Toll-Free SWHP Hotline: (866) 611-CPAU

SWH Application Mailing Address

Center for Sustainable Energy
CPAU SWH Program
9325 Sky Park Court Suite 100

San Diego, CA 92123