As the price of energy continues to soar, homeowners are turning to the most abundant renewable energy source on the planet – the sun.

Jeff Davis, a sales manager and partner of Hawaiian Island Solar, says the number of homeowners installing solar water heaters is soaring. He attributes the increase to rising fuel prices that continue to eat-up large chunks of a family’s budget.

“We're putting in two or three solars a day,” said Davis. “Basically it's an economically driven push to try and get that electric bill down.”

Hawaiian Electric Co. spokesman Darren Pai says water heating is the number one expense in powering a home and it makes sense to switch to solar, especially in larger households.

“Solar water heating is one of the best things any homeowner can do to bring down their electric bill,” said Pai. “Typically in a regular household anywhere between 25 to 40% of their use of electricity is for water heating.”

While monthly savings can quickly add up, state and federal tax credits along with a $1,000 rebate offered by HECO makes solar water heating extremely attractive.

The average solar water heating system costs about $6,000 but after factoring in rebates and tax credits the overall price shrinks substantially. “Currently, we've got state and federal (tax credits) totaling $4,250 max,” said Davis. “You've got HECO down for another $1,000 - that's $5,200.”

According to HECO statistics 3,087 homeowners took advantage of the thousand dollar rebate last year. As of March 9th of this year, 1,797 rebate checks have been mailed out.

Although Pai was hesitant to forecast end of the year numbers, more than 9,500 homeowners may take advantage of the one-time rebate if the current pace keeps up.

“We think that's a great bandwagon for people to be getting on,” said Pai. “You get your system at a lower price and the contractor is the one that's applying for the rebate.”

Meanwhile, the federal solar tax credit of $2,000 is set to expire at the end of the year. While some in Congress are hoping to extend the subsidy, Davis expects even more business in the last quarter of 2008 as homeowners rush to take advantage. “It's going to be the mother of all end of the year this year,” he said. “The end of the year often results in 25% of the total solar installed.”

A bill passed by lawmakers this past legislative session (SB644) mandates that all new homes built in Hawaii on or after January 1, 2010 must have a solar water heater installed. While HECO supports the measure Davis does not, saying it could lead to shoddy workmanship and higher prices.

“In certain developments the solar option is ten thousand dollars” he says. “At that same development our solar goes in with a net cost of $1,800 to $1,900.”

Russell Pang, chief of media relations for the governor, says while Lingle supports the intent of SB644, she’s still gathering information, which includes concerns from the building industry about the bill.

“She has until July 8th to make her decision,” said Pang, which is deadline for Lingle to either veto, sign the bill or allow it to become law without her signature.

Andrew may be reached at apereira@khon2.com or ph. 591-4263.