Michael Stoebner couldn't be happier a year after blanketing the roof of one of his Kane'ohe auto spa buildings with solar photovoltaic panels.

"So far it's been great," said Stoebner, general manager of Honda Windward, owner of the car wash and maintenance facility on Kahuhipa Street.

"It's a win-win situation for the business and the 'aina."

The photovoltaic panel system provides 40 percent of the power it takes to run some 200 vehicles through the facility's car wash each day, with the company looking at selling some of the power it produces to Hawaiian Electric Co.

Across the state similar stories are unfolding as photovoltaic electrical systems sprout on rooftops of businesses trying to escape Hawai'i's nation-leading commercial and residential electricity rates and take advantage of federal tax credits before they expire at the end of the year.

Businesses are also wary of future electricity price hikes as petroleum prices climb and $100-a-barrel oil is no longer fanciful talk. The state is 77 percent dependent on petroleum for its electricity production.

INSTALLERS SLAMMED

Local photovoltaic system installers report being busier than ever. Business was so hectic last week for SunEdison LLC, North America's largest solar services provider, that its executives had trouble finding time for an interview. Last year the Beltsville, Md.,-based company bought Kailua-based Island Energy in seeking a piece of the burgeoning business here.

The list of companies getting systems is growing and includes the likes of Wal-Mart Stores Inc., the Bentonville, Ark., discounter that in part built its cost-efficiency advantage by sophisticated use of technology at its warehouses and suppliers. Wal-Mart, with the help of SunEdison, has installed or is installing four systems on Hawai'i stores this year.

Castle & Cooke Inc. wants to install a 1.5-megawatt photovoltaic system on Lana'i that will provide 30 percent of the island's daytime power needs, while Actus Lend Lease Corp., the biggest builder of military housing here, has contracted another Kailua company, Suntech Hawaii, to put photovoltaic systems on 3,500 homes. Suntech says the homes will generate 65 percent of their own electricity.

The list continues. The state plans to put panels atop 12 buildings to generate up to 34 megawatts of electricity. Costco Wholesale Corp. has installed 680-kilowatt systems at its Kona and Lihu'e stores; an 804-kilowatt system is planned for Kona Commons shopping center.

Hilo's ProVision Technologies Inc. has put in systems atop car dealership buildings on Maui and the Big Island — at a Kahului linen supplier and at a Pahoa grocer. Even Hawaiian Electric Co. is putting in a 167-kilowatt system at its Ward Avenue facilities to gain more familiarity with the technology.

HAWAI'I'S 'AT THE TOP'

Hawai'i has two critical components to drive installation of commercial photovoltaic systems, a technology that's been around since the 1950s and is commonplace today in calculators and watches.

One of the factors is obvious — lots of sun for the photovoltaic cells to convert light to electricity. The second is savings that can be achieved by reducing power from an electric utility's grid. Travis Bradford, author of "Solar Revolution: The Economic Transformation of the Global Energy Industry" and editor of the PVNews newsletter, says Hawai'i is a leader in both categories.

"If you lined up all the states in the U.S., Hawai'i is at the top," said Bradford. "Hawai'i is a fantastic market for solar energy."

While there are many good environmental reasons for business to adopt photovoltaic systems, including the reduction of greenhouse gas emissions, there are powerful economic incentives in place for business to jump on the bandwagon. Suntech Hawaii installed Stoebner's system and estimates the system is saving the dealership $2,000 a month on electricity.

CREDITS, SAVINGS ADD UP

Business owners who buy the systems outright can get 72 percent of the system paid off in tax savings the first year, according to Sean Mullen, president of Suntech Hawaii. That includes a 30 percent federal tax credit, a 35 percent state credit and the remainder in accelerated depreciation. On Friday, Honolulu City Councilmember Charles Djou announced a new law exempting photovoltaic systems from the payment of permit fees.

"We're in a very, very busy time for the industry right now," Mullen said. "It's good for all of us."

There also are a variety of financing options available for businesses including from outright purchases, purchase power agreements and leases. Some businesses can't use all the tax benefits — a business installing a $1 million system would have hundreds of thousands of dollars in tax credits to offset profits.

That's where purchase power agreements and leases come in.

Under the PPAs the business signs an agreement to buy power from the company installing the equipment. Where Hawaiian Electric might charge 19.5 cents per kilowatt hour, the PPA might sell the electricity to the business for 16 cents or 17 cents per kilowatt hour, Mullen said. Such agreements may run 20 years and include an adjustment clause for inflation.

"You're kind of hedging against the oil price in the future," Mullen said. "The PPA prices we're giving out right now start out cheaper than what most customers are paying HECO."

He said the lease option is favored by people who can't purchase and don't want to commit to a 20-year PPA. Instead, they'll agree to pay a set lease amount, say $1,000 a month, for 10 years. Mullen said the lease rates typically are 20 percent less than what customers would pay for the electricity on the Neighbor Islands, where prices are higher than on O'ahu.

LOCKING IN LOWER PRICES

On O'ahu, the leases may be attractive to businesses who want to guard against electricity price increases in the future.

Businesses are rushing to get photovoltaic installed before the federal tax credit expires at the end of this year. But there are efforts to extend it in Congress.

Even then, Bradford said, photovoltaic systems should remain popular for the foreseeable future. He said systems have been declining in price by about 5 percent per year over the past 20 years. While there are some short-term pricing fluctuations because of shortages for photovoltaic, (Kapolei-based Hoku Scientific is building a polysilicon plant in Idaho to help meet this demand), the prices should continue to fall over the long run, Bradford said.

"I suspect you'll be seeing a lot more solar in Hawai'i," Bradford said.

Stoebner is completely sold on the systems and is considering installing photovoltaic stems for another Honda Windward facility and for his home as well.

"It was a great, great thing to do for our facility," he said. "It's a no-brainer if you look into it."