It's a technology that has been used in California in one form or another since the 1800s. But, like its photovoltaic counterpart, solar hot water heating in the state is about to ramp up production in a big way with the signing of bill AB 1470 by Governor Arnold Schwarzenegger last week.

Known as The Solar Water and Heating Efficiency Act of 2007, the new legislation is designed to create a broad market for solar water heating technologies by offering $250 million in rebates for the state's consumers over the next ten years.

The rebate fund would come from a $0.13 per month surcharge on gas bills and be implemented by the California Public Utilities Commission and individual municipal utilities.

"The goal of the program is to install 200,000 hot water systems on businesses and homes throughout state of California, see reduction in price and similar to the California Solar Initiative that we passed last year—to support solar electric technologies—the vision of this program is to create a mainstream market for solar water heating technologies as well," said Bernadette Del Chiaro, Clean Energy Advocate for Environment California, during an interview with Inside Renewable Energy host Stephen Lacey.

Authored by California Assemblymember Jared Huffman (Marin) and sponsored by Environment California, AB 1470 was originally envisioned to be included as part of the Million Solar Roofs bill, SB 1, which was signed into law by Schwarzenegger in 2006.

Fast forward one year. In an effort to diversify California's solar market, supporters successfully pushed AB 1470 through the California legislature as a companion to the Million Solar Roofs legislation.

"California can achieve greater energy independence, fight global warming, and save homeowners and businesses money by encouraging a mainstream market for solar water heating," said Assemblymember Huffman.

A report released in April by Environment California Research & Policy Center showed that a mainstream market for solar water heating could cut 6.8 million tons of global warming pollution per year, while cutting natural gas demand in each home by 50-75%.

"Launching a mainstream solar water heating program is really beneficial to consumers as well as the environment. The estimates show that if we were to take advantage of California's potential solar water heating market, we could see a 25 to 35% reduction in wholesale prices of natural gas and that is simply because demand for natural gas is going nowhere but up, and supplies worldwide are going nowhere but down," said Del Chiaro.

"By signing this bill into law, Gov. Schwarzenegger is placing yet another solar power technology in the spotlight, harnessing it for California's growing demand for renewable energy," added Del Chiaro.

But while normally the trendsetter when it comes to implementing solar policy legislation in the U.S., California is not the first to create a mass market for solar hot water heating. That title actually belongs to Hawaii.

"In the United States, Hawaii is actually out competing, out installing solar water heaters compared to California 4 to 1. So they're installing about 4,000 domestic solar water heaters in Hawaii every year where as California is installing about 1,000," said Del Chiaro, noting Hawaii has a rebate program for consumers.

"In this case we'll be following Hawaii's lead in some ways, but we want to basically show the rest of the country that solar water heating—just like solar electric—is a good technology to invest in and something that is ready for mainstream."