The project, which would span six islands, could generate as much as 34 megawatts of electrical power and would likely be among the largest state-backed photovoltaic projects in the country.

Switching to solar power would allow the state to hedge against the rising cost of electricity while reducing reliance on imported crude oil. However, the project would not require any up-front investment by the state.

That's because the state wants a private business to buy and install the system, which would then provide power under a long-term 20 year power purchase agreement.

One megawatt of photovoltaic panels could reduce crude oil consumption by about 3,800 barrels per year, according to Hawaiian Electric Co. One megawatt of power also could supply the power needs of about 1,000 homes. However, solar power panels usually produce about 20 percent of their rated power output because the panels don't always receive sunlight.

The department started soliciting bids for the project in December and final bids are due late this month. The system, which encompass a dozen locations including major airports, could be up and running within two years. DOT spokesman Scott Ishikawa did not know how many bids were received for the project so far.

Richard Rocheleau, director for the Hawaii Natural Energy Institute, estimated the DOT solar power system could cost $50 million or more depending on how much of the 3.4 million square feet of roof top area is usable.

"If that was covered by (photovoltaic panels) that would be a huge amount," he said. "If someone did that entire area, it would certainly be one of the larger (projects) I've heard of."

The cost of the proposed project to the winning bidder could be offset by as much as 65 percent by using available state and federal tax credits.

Currently the largest photovoltaic power system on O'ahu is located on the rooftop of Hangar 54 on Ford Island. That system generates about one-third of a megawatt of power, or enough electricity to power 300 homes.

Previously the largest announced photovoltaic project in Hawai'i was planned by Castle & Cooke Inc. The company plans to build a 1.5-megawatt solar farm on a 10-acre site in south Lana'i. The project would cost an estimated $13 million to $18 million.

Castle & Cooke hopes to begin construction in April or May if it can acquire the needed construction permits, said Tim Hill, Castle & Cooke's executive vice president for renewable energy projects. The company wants to complete the project before a 30 percent federal tax credit expires at the end of this year.

Other local projects include a 167-kilowatt O'ahu solar power system being built by Hoku Scientific Inc. for Hawaiian Electric Co. The system at Ward Avenue is expected to be in service early this year, pending approval by the Public Utilities Commission.

Kapolei-based Hoku would not comment on whether it was bidding on the DOT project. However, Scott Paul, vice president for business development, agreed that the proposed state solar power project could be one of the largest planned by any government agency in the United States.

"We think it's fantastic that the state is taking the initiative," he said. "It is a really good way for (photovoltaic technology) to gain visibility as a viable solution to reduce overall energy costs for business or in this case a government agency."

According to the state's request for proposal, power generated at each state location would be used internally. The state would have the option to purchase these photovoltaic systems after 20 years or to renegotiate a new power purchase agreement.

The use of solar power panels appears is on the rise spurred by state and federal tax credits and rising energy prices, said Hawaii Natural Energy Institute's Rocheleau.

"For us on this island it's probably a bit of a longer pay back for the typical homeowner," he said. But "It's something that for a state entity probably is getting to the point when it makes sense. It certainly isn't out of the question at all."

Last year about 80 Hawaiian Electric customers signed so-called net energy metering agreements with the utility, said spokesman Peter Rosegg. Such agreements allow owners of solar power systems to sell excess electricity back to the utility.

Prior to 2007 there were only 23 net energy metering agreements in place, Rosegg said.

"We've had a record number of people applying for those," he said. "We encourage customers to consider whether a renewable energy system is right for them."