Under the feed in tariff program -- called Clean LA Solar -- participating building owners can sell all the power generated from their rooftops to the Los Angeles Department of Water and Power for distribution on the city's power grid.
LADWP expects the program to generate 150 megawatts of solar energy, enough to power more than 43,000 typical homes, which it says would reduce 147 metric tons of CO2 emissions, the equivalent to removing 28,300 cars from the road.
The first solar panel installation, on the rooftop of a North Hollywood apartment building, was officially connected to Los Angeles' power grid this week. It will generate 142,000 kilowatt hours of solar energy annually.
The program "takes advantage of LA's abundant sunshine to spur new private sector investment that will create jobs and decrease our city's reliance on dirty fossil fuels," Mayor Antonio Villaraigosa said in a statement, noting the initiative represents a "major step forward in creating a clean energy future for Los Angeles."
LADWP General Manager Ronald O. Nichols said Los Angeles residents "can expect to see thousands of solar panels installed on apartment buildings, warehouses, parking structures and other rooftops throughout the city" that within the next few years.
"A big advantage of local solar installations is that they generate clean, sustainable power right here in Los Angeles, avoiding the cost of building new transmission or taking up capacity on existing lines," Nichols said. "This also avoids the cost of energy losses that occur when transporting energy from several hundred miles away."
SolarCity Corp., a rooftop solar company based in San Mateo, Calif., said it plans to introduce a system in California that would allow customers to generate power by panels during daylight hours and store the energy in battery packs at night, the Los Angeles Times reported.
The concept allows customers to sidestep a net metering arrangement used by most of the state's utilities so customers would pay the utility for the electricity they use over a 12-month period beyond the amount generated by their solar systems.
California ranked first in the nation for solar energy in the Solar Energy Industries Association's 2012 U.S. Solar Market Insight Report, with 1,032 megawatts installed last year, enough to power 626,000 homes.
SEIA had said if California were a country, it would rank seventh in installed global photovoltaic capacity.
California aims to generate 33 percent of its electricity using renewable sources by 2020.