The mayor of San Francisco, Gavin Newsom, has issued a challenge to the city’s largest 1,500 businesses to install solar energy technologies, as he continues his drive to position the city as one of the greenest in the US.

The mayor last week announced the creation of the Solar Founders' Circle, a club of solar-friendly businesses that will receive free energy audits and solar assessments.

The largest 1,500 companies in the city will be invited to join the group in the next few months with the mayor hoping that the programme will result in 170mW of solar power being generated.

The move follows the launch in March this year of a rebate programme called GoSolarSF, which offers rebates to both commercial and residential solar users. In conjunction with state and federal tax incentives, the programme can fund up to $10,000 (£5,700) of the cost of a firm's solar installation.

A mayoral statement in March said that the $3m earmarked for municipal solar funding this year should have created 1.5mW of private sector solar power.

According to the San Francisco Solar Map, San Francisco had 871 photovoltaic systems installed at the time of writing – up from 750 in March – and total capacity has jumped by almost a megawatt to date.

Now is a good time for California's solar industry. The $700bn bail-out package that finally made its way through Congress last week included an eight-year extension of the solar energy tax credit some had feared would be allowed to lapse at the end of this year.

Meanwhile, many solar firms are emerging to service the growing number of firms looking to install solar panels on their properties. Back in March, energy firm Southern California Edison, for example, announced a five-year, $875m plan to install solar panels on 65m square feet of commercial rooftops in southern California.