A bill that would provide a one-time real property tax credit of $300 for Honolulu homeowners who install a solar water heater is moving forward.

The bill, for owners of single-family homes and duplexes, passed the City Council's budget committee yesterday. It is scheduled for a second of three required votes and a public hearing before the full council on March 19.

"It's definitely going to lower the amount of electricity we as a community use," said Councilman Donovan M. Dela Cruz. "The more we can encourage alternative uses of energy, the more we reach toward our goal of becoming more sustainable."

The bill was introduced by Dela Cruz and Councilwoman Ann H. Kobayashi in November 2007. It would go into effect July 1, 2009, if approved.

About 80,000 single-family homes and multi-unit dwellings on O'ahu have solar water heaters, according to the state.

By encouraging residents to install the solar heaters, the council would be assisting efforts to reduce "household's and the state's dependence on nonsustainable energy sources," said Jessica S. Barry, in written testimony submitted in support of the bill. "There are still many houses without them."

Residents already are eligible for incentives to install the heaters.

Last year, Hawaiian Electric Co. received permission from the public utilities commission to increase its rebates for those who install a solar water heater. It increased the rebate to $1,000 from $750.

The higher rebate applies to installation contracts signed on Feb. 13, 2007, or later, the company said.

The rebate is available to residential customers who have qualifying systems installed by a HECO-approved contractor.

The rebate, combined with a 30 percent federal tax credit and a 35 percent Hawai'i state tax credit, can bring the cost of a typical solar water heating system down to about $1,500, according to HECO. The regular cost of a solar water heating system can cost between $3,200 ad $5,000.

Since the 1996 launch of the solar water heating program, HECO said it has installed more than 30,000 systems on O'ahu, making the program one of the largest and most successful in the country.

Reach Peter Boylan at pboylan@honoluluadvertiser.com.