California State University Hayward earned a record-setting $3.4 million rebate from Pacific Gas and Electric Co. on Wednesday because the school installed a large solar electricity generation system.

Under state law, PG&E pays up to half the cost of large renewable energy systems, such as solar or wind. The Cal State Hayward rebate is the largest single solar rebate ever awarded by P&E, said company spokesman Paul Moreno. It far exceeded the next-largest rebate, the $2.3 million PG&E returned to the Oroville Sewage Commission in December 2002.

Cal State Hayward's system is mounted atop four buildings. It was installed at a cost $7.1 million last month by PowerLight Corp. of Berkeley, one of the nation's largest manufacturers of large-scale solar power systems. Cal State Hayward's system is still being tested, but it is producing some power, said university spokesman Barry Zepel.

University officials anticipate the system will generate 1.45 million kilowatt hours of electricity annually, enough to power 255 average homes. That would be enough energy to provide 30 percent of the university's needs while saving about $200,000 a year in energy costs.