With fuel prices and electricity bills shooting up, Hawai'i consumers are steadily converting to solar water heaters — some encouraged by rebates and tax credits.

That's the assessment of Hawaiian Electric Co. and its affiliates, which offer $1,000 rebates to customers installing the systems and several of the companies that install such systems.

Over at Poncho's Solar, co-owner Terrie Safranca said she's noticed an upswing. "We're definitely busier than we were in the past," she said.

At HECO, spokesman Darren Pai said the company and the Big Island and Maui companies saw increased use of the company rebate since February 2007 when it rose from $750 to $1,000. And he said consumers are mindful that the federal tax credit is set to expire at year's end.

As of this May, the company already recorded 2,010 rebates issued, up 32 percent compared with the same period last year.

A review of five years of rebates from HECO shows steady strong demand. "The increase in the rebate level has been driving demand, along with more awareness of the benefits of solar water heating and some concern about the possibility of the federal tax credit expiring at the end of this year," Pai said.

Based on 2006 data, the company estimates a system that would cost $5,250 could drop down to less than $1,500 for those who qualify for all the credits and rebates.

Since the rebate began in 1996 more than 42,000 solar water heaters have been installed in Hawai'i, according to HECO's records.

Pai said the solar power allows consumers to save 90 percent on water heating costs or about $5-10 per person per month. Safranca said customers now are looking for the savings after seeing the effect of skyrocketing fuel prices. "It's just made it so much more affordable, it pays for itself in 2-3 years instead of 6 to 7 years," she said.

Yesterday, crews from Poncho's installed a solar water heater at Ichiko Imai's home in Pacific Palisades.

Imai, who has lived in the house for more than 30 years, said her son suggested it was a wise purchase and a way to bring down monthly electric bills.

"I'm going to be saving on some energy," Imai said.

A recent bill passed by the state Legislature also stirred more interest in solar by requiring builders of new homes to install a solar water heater beginning in 2010. However, SB 644 — which is still awaiting Gov. Linda Lingle's action — has been met with mixed reviews because of a provision that would allow homeowners to opt for a "tankless" gas water heater as well as one other gas appliance instead of solar.

Ivan Gomez has been in the Hawai'i solar business since 1998 and started his own company, Saving Oahu's Solar, in Manoa in 2003.

He sees the recent upturn in business as a combination of cost-savings as a reaction to high fuel prices and increasing environmental awareness.

"I think a lot of people are thinking green," Gomez said.

His company focuses mainly on residential installation and some maintenance.

He said he's seen a "good steady increase" but also noted more homeowners wanting the more expensive photovoltaic systems that generate electricity from the sun.

While solar water heater systems run $5,000 to $12,000 depending on the size, Gomez said photovoltaic energy-generating systems start at $15,000 and go up from there.

Even with the higher price, he's starting to install one or two of the photovoltaic systems a month with people thinking that the systems can pay for themselves in about 10 years.

"It just seems like people are looking to do more," Gomez said. "It's more than just saving the planet. It's a good investment. The price of electricity keeps going up."

But Gomez and Safranca agree that the rebates and credits provide motivation for consumers and they hope they'll be extended. "I still think the rebates play a big part in their decision-making," Gomez said.

Reach Robbie Dingeman at rdingeman@honoluluadvertiser.com or 535-2429.