Californians across the Golden State have additional incentive to consider solar water heating installations in 2010. This past January, the state Public Utilities Commission approved $350 million in rebates for citizens who install solar hot water systems in their homes. According to experts, the solar hot water rebates could reduce the cost of purchase and installation by 15 to 25 percent. While solar electric — or photovoltaic systems — often get more attention, solar water heating systems are less expensive and can save a lot of energy.

The California solar hot water rebate program is merely a snapshot in the landscape of incentives that make up the California Solar Initiative (CSI), the driving force behind the state’s solar energy ambitions. The program is part of a still larger Go Solar California campaign, built on 10 years of state solar rebates.

Under the program, CSI will disburse $250 million in funding to replace natural-gas-powered water heaters, and another $100.8 million to replace electric-powered water heaters, with solar hot water heaters throughout the state. An additional $25 million will be awarded to help low-income consumers access the solar water heating option. All buyers may also take advantage of the 30 percent tax credit given by the federal government for solar installation.

The extensive funding for the program comes at an uncertain time for the state, which has been battling both a budget crisis and high unemployment. In January, the U.S. Bureau of Labor Statistics reported the California unemployment rate at 13.2 percent. Even so, solar-interest companies are confident that funding will bring worthy returns on several fronts.

The California Utilities Commission expects the funding to result in the installation of systems that could displace as much as 585 million therms of natural gas (equivalent to placing water heaters in 200,000 single-family homes) and 275.7 million kilowatt-hours of electricity each year. That’s a lot of saved electricity that would otherwise need to be generated with conventional sources, like natural gas, hydro, nuclear and coal.

According to the advocacy group Environment California, the solar hot water program could translate to more than 3,000 new California jobs, a drop in natural gas demand by 5 percent and a drop in wholesale gas prices by 35 percent.