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At the direction of Governor Schwarzenegger, the California Solar Initiative was approved by the California Public Utilities Commission (CPUC) on January 12, 2006. The initiative creates a $3.3 billion ten-year program to put solar on a million roofs in the state.

This program changes the way the state's renewable energy incentives and rebates will be managed. The CPUC will oversee a program to provide incentives for existing residential customers and for all non-residential customers.

The California Energy Commission will manage a 10-year, $400 million program to encourage solar in new home construction, known as the New Solar Homes Partnership (NSHP).

The Energy Commission will work with builders and developers to incorporate high levels of energy efficiency and high-performing solar systems to help create a self-sustaining solar market where home buyers demand energy efficient, solar homes. The NSHP will specifically target single family, low-income, and multi-family housing markets.