Keith Cronin, of Island Energy Solutions, whose own home is loaded with alternative energy technology.

Even in the oil-producing state of Texas, critics say, the electric utility Austin Energy pays customers a rebate of $5 per watt for energy generated by solar power. The utility estimates that covers 50 percent to 80 percent of the cost of installing a solar photovoltaic system.

But in Hawai'i, a residential photovoltaic system gets a $1,750 tax rebate—perhaps 5 percent of the cost of the system. It's not nearly enough, said Marco Mangelsdorf, president of ProVision Technologies, a Hilo-based solar power firm.

He and other critics say Hawai'i has a long way to go.

Said Rick Reed, president of the Hawai'i Solar Energy Association, "Look, if you put in a 4-kilowatt solar system and a solar hot water system, it's going to cost $30,000 to $40,000, but you're done (with paying power bills). If oil goes to $150 a barrel, you're still done."

The state is providing adequate incentives, said state Strategic Industries Division chief Maurice Kaya. He said record power prices in the Islands mean many existing programs already should be sufficient incentives.

"There are contrasting points of view on this matter," Kaya concedes.

Either way, the state has no plans to bring major alternative energy initiatives before the 2005 Legislature.

Kaya said he anticipates some fine-tuning of existing alternative energy incentives, and perhaps some new programs promoting conservation and energy efficiency.

Lowell Kalapa, president of the Tax Foundation of Hawai'i, said he doesn't object to the idea of government helping support alternative energy, and is himself a strong supporter of conservation and alternative energy. He said he has cut his home power bill to about $34 a month by using solar water heating, gas cooking, no air conditioner and drying his wash on a clothesline.

"The cost of photovoltaics is still rather expensive. What if, instead of doling out tax credits, the state used its bulk buying power to purchase solar panels, and perhaps subsidized the cost of systems. Then you have a better idea of the kinds of systems going in, and more accountability over the costs to government."

Hawai'i leads the nation in one area: per-capita installation of residential solar water heating systems. A state tax credit and utility rebates can cut a solar hot water system's cost of roughly $5,000 by half.

But if a resident wants to put up a solar photovoltaic system capable of producing all of an average home's power, which can cost $30,000 to $40,000, the maximum state tax credit is $1,750 — the same as for a water heating system.

By contrast, if a business wants to install photovoltaics or other alternative energy systems, it can get credits of 35 percent of the cost, up to a maximum of $250,000.

Kaua'i resident Moksha McClure found a unique way to take advantage of that in developing her pet-sitting business, Whiskers Resort.

McClure said her leased agricultural site at Kipu is far from the nearest utility pole.

"For me, it would have been really expensive to bring in electricity. I estimated $40,000 cost," she said.

She wanted to install a solar photovoltaic system, with a backup power generator that would burn biodiesel—fuel made from recycled vegetable oil. Total system cost, roughly $30,000, and total potential tax credit, $10,500. It would provide all her business's power requirements.

But McClure said she did not expect her business to produce enough profit in its first years to take advantage of the tax credit. So she arranged for Bank of Hawaii to buy the system and lease it to her. This way, the bank could take the tax credit and would reduce her lease payments accordingly.

"My lease rent is something like negative 18 percent," she said.

Activities to promote renewable energy in many states is high, said Lewis Milford of the Clean Energy States Alliance, a states' group promoting renewable energy.

When Peter Jones, a resident of South Burlington, Vt., put a $21,000 solar photovoltaic system on his roof, the state government paid a third of the cost. He no longer has electric bills. Vermont pays up to $12,500 toward solar photovoltaic or windpower systems and $7,500 toward solar hot water systems.

New Jersey's Clean Energy program pays up to $5.50 a watt as a rebate for qualified solar power systems. The New York Incentives for Renewable Energy program pays up to $4.50 a watt. Florida Power and Light's Green Pricing Program in 2002 initiated a system paying $2 to $4 a watt.

California offers a range of rebates for systems, depending on size and the technology used. Small photovoltaic systems qualify for $3.20 a watt. Small hot water systems get $3.60 a watt. Small wind energy systems can get $2.10 a watt.

Hawai'i's strong solar water heater program has been used in about 75,000 residential units statewide. But the less aggressive solar electric program has produced only about 50 legal net-metered systems across the state, said Reed, the Hawai'i Solar Energy Association president.

Gov. Linda Lingle has been supportive of alternative energy systems and has strongly backed the state's renewable energy portfolio standards, which require the utilities to produce 20 percent of all their power from nonifossil fuel sources by the year 2020. The state energy office estimated the state was at 8.2 percent renewable in 2003.

But that doesn't necessarily mean the state will dramatically expand the generation of renewable energy to reach that goal. It could also use conservation to get there.

"Hawai'i also defines renewable energy as electrical energy savings brought about by the use of solar and heat-pump water heating, seawater air conditioning, district cooling systems, solar air conditioning and ice storage, quantifiable energy conservation measures, use of rejected heat from small-scale cogeneration, and customer-sited combined heat and power systems," the state energy office said in a report to the federal Department of Energy.

Lingle said that both generation and reduced demand meet the goal. "It makes common sense to me that we do everything to reduce reliance on energy that's imported," Lingle said. "To sit here and stay as we are is not an option."

Many in the industry are frustrated particularly by the state's failure to support increases in solar photovoltaics.

"We would like to see the power of photovoltaics fulfilled," Reed said. He said that if the state fairly priced the costs of oil, including air pollution and the cost of carbon-dioxide emissions promoting global climate change, it would find solar cells to be a good investment.