State energy regulators will now decide on the rules. A test program began in San Diego County this summer, offering homeowners a one-time rebate as large as $1,500. The results of that test will help the California Public Utilities Commission design the statewide program.

Authors of the new legislation hope to see 200,000 new solar water heating systems installed as a result of the rebates. The rebate money is expected tol come from a fee tacked onto the natural gas bills paid by utility customers, amounting to about 13 cents per month.

California also is taking part in its "million solar roofs" initiative, a $3.3 billion program that gives rebates to homeowners who install solar electricity systems.