The $20 million Project Nexus is funded by the state.
The project is deploying solar panels in two canals about 100 miles inland from San Francisco.
The first of the two pilot projects is a 500-foot span of a canal in Hickman.
And the second is a mile-long straightaway in nearby Ceres.
If eventually scaled up, the initiative could save billions of gallons of evaporated water while providing electricity to millions of homes.
Lining the canals with solar panels would also eliminate the need to use other land for such purposes.
The project is based on a similar venture in the west Indian state of Gujarat, but is the first of its kind in the U.S.