A giant Mainland solar energy services company has acquired small Kailua-based Island Energy Solutions Inc., raising the potential for expanded solar power use in the state.

SunEdison — based in Beltsville, Md. — announced the acquisition yesterday. Island Energy is an electrical contractor that also specializes in solar electric system installation. Terms of the deal were not disclosed.

Jigar Shah, SunEdison CEO, in a statement said the company views Hawai'i as an important market it expects will be the first state where utility electricity prices reach parity with solar energy costs.

Hawai'i has some of the highest electricity costs in the country, as well as some of the best climate conditions for solar power use.

As a result, solar power production in the form of residential solar water heaters is higher than in any other state, according to the state's Department of Business, Economic Development & Tourism.

About a quarter of all Hawai'i homes use solar power to heat water, traditionally a major use of electricity.

DBEDT energy analyst Howard Wiig said generating electricity through photovoltaic systems is becoming more economically attractive statewide, especially on Maui and the Big Island, where residential electricity prices are above 30 cents per kilowatt hour.

"That makes photovoltaics very, very economically attractive," he said, adding that state and federal tax credits for photovoltaic system purchases also are incentives.

Still, the state relies on oil to fuel or generate about 90 percent of its energy, more than any other state, according to the U.S. Energy Information Administration. Gov. Linda Lingle has set a goal of having 20 percent of Hawai'i's energy from renewable sources by 2020.

Earlier this month, Lingle announced that the state will explore ways for state and county governments to buy electricity directly from independent renewable energy providers such as solar power producers, windfarms and geothermal providers.

"Renewable energy has to be an important component of our state's energy supply in order to reduce our dependence on imported fossil fuels," Lingle said.

Island Energy, established in 1999, is a firm with 14 employees that focuses on residential electrical service but also is involved in commercial and institutional markets. The company has installed roughly 75 solar power systems to date.

Shah of SunEdison said Island Energy's broad expertise will help it solve the energy needs of Hawai'i. "We are honored that they have chosen to become part of the SunEdison team," he said.

Island Energy will now be known as SunEdison Hawaii. Keith Cronin, Island Energy president and CEO, will continue as president of the acquired firm.

"We are excited that Island Energy can be part of a global organization with the credentials of SunEdison, the true leader in solar energy services," Cronin said in a statement. "Together, we look forward to deploying solar (photovoltaic) systems throughout the state of Hawai'i. In addition, we look forward to contributing ideas successfully used here in Hawai'i to SunEdison that can be rolled out on a global scale."

SunEdison said it is the largest solar energy provider in the country. The company builds, owns and maintains solar plants, and sells the solar electricity to customers. SunEdison is constructing what it calls the largest utility-based photovoltaic project in the United States, an 8.2-megawatt plant in Alamosa, Colo.

SunEdison also develops smaller systems for individual customers such as the city of San Diego, the California state university system, Kohl's, Staples and Whole Foods.

In Hawai'i, SunEdison has installed systems on the Big Island for Island Naturals Market & Deli in Pahoa and two Toyota dealerships. The company also is installing rooftop solar panels on four Hawai'i Wal-Mart stores designed to supply up to 30 percent of store electricity as part of a solar test by the retailer at 22 stores in California and Hawai'i.

Reach Andrew Gomes at agomes@honoluluadvertiser.com.