Residential electric bills on Oahu hit a record high in December for the third consecutive month, continuing a trend that has prompted a growing number of homeowners to install rooftop photovoltaic systems to cut their soaring power bills.

The typical bill for a Hawaiian Electric Co. customer using 600 kilowatt hours of electricity a month rose to $219.03 in December, up $3.22 from November and about $60 from December 2010.

HECO attributed the rising rates to more expensive petroleum-based fuel used for the bulk of its power generation. Higher fuel costs accounted for more than 90 percent of the overall increase in rates, according to the utility.

Other factors, including a switch to a new rate-setting mechanism known as decoupling and an interim increase in the base rate, contributed to the rise in HECO’s rates.

Anna Winslow said she and her husband, Rick, had been considering photovoltaic panels for their Waianae home for several years, and finally were motivated to act after the recent run-up in electricity rates.

"I looked at one of my old bills from 2005 and saw that we were paying 16 cents a kilowatt hour. On my last bill it was 35 cents a kilowatt hour. We went from paying $200 to $250 a month to $400 a month. I said, ‘Whoa, what happened there? This is crazy.’"

The rapid rise in rates has narrowed what had been a traditionally wide gap between Oahu and the neighbor islands. The Oahu rate rose to 35.10 cents a kilowatt hour in December from 24.85 cents a kilowatt hour a year earlier, an increase of 41 percent. By comparison, the rate charged by Maui Electric Co. rose to 35.70 cents a kilowatt hour from 30.56 cents a kilowatt hour during the same span, an increase of 16.8 percent.

Hawaii Electric Light Co. charged its customers 41.70 cents a kilowatt hour in December, up 18.5 percent from a year go, while Kauai Island Utility Cooperative’s customers paid 40.6 cents a kilowatt hour, up 13 percent from last December. MECO and HELCO are subsidiaries of HECO, while KIUC is owned by its members.

Hawaii’s electric rates are by far the highest in the country. The most recent data published by the U.S. Department of Energy showed that Hawaii’s average residential rate was 37.53 cents a kilowatt hour in September. That was nearly double second-place New York, where residents paid an average of 18.91 cents a kilowatt hour. At the bottom of the list was Idaho with an average residential rate of 6.76 cents a kilowatt hour in September.

"On average, electricity prices are highest in Hawaii, mainly because most of the electricity there is generated with fuel oil. Idaho usually has the lowest prices mainly because of the availability of low-cost hydroelectric power from federal dams," according to the U.S. Energy Information Administration’s website.

The reason rates have risen faster on Oahu than on the neighbor islands is that the type of fossil fuel burned at HECO’s power plants, predominately low-sulfur fuel oil, has been trading at a premium compared with other types of fuels, such as diesel, said Peter Rosegg, a spokes­man for HECO. Demand for low-sulfur fuel oil in the Pacific Basin began rising following the shutdown of Japan’s Fukushima Daiichi nuclear plant in March. Japan began importing more low-sulfur fuel oil for electrical generation to help offset the drop in nuclear power production.

In November 2010 HECO was paying $87.75 a barrel for low-sulfur fuel oil, which is used in 99 percent of its oil-filled power plants on Oahu. In November 2011 the price had risen to $131.89 a barrel, an increase of more than 50 percent.

Diesel, the predominant fuel burned by MECO in its oil-fired plants, rose to $140.76 a barrel last month, up 38.8 percent from $101.39 a barrel in November 2010. Medium-sulfur fuel oil, the main petroleum based fuel burned by HELCO, rose to $117.27 a barrel in November, a 48.3 percent increase from $79.08 a barrel a year earlier.

The rise in oil prices illustrates the importance in moving to alternative forms of energy, such as solar, said Mark Duda, president of the Hawaii Solar Energy Association.

Solar panel installations have been on a steep trajectory statewide. The number of systems installed on Oahu, Maui and Hawaii island under HECO’s net metering program more than doubled in 2010 compared with 2009. And 2011 is on track to more than double the number installed in 2010.

"What we are trying to do is get off of oil and people are more motivated when there is an economic incentive," Duda said. "Here in Hawaii we are always going to be vulnerable as long as we are relying on oil. It is the most volatile fuel that is also the most expensive."

The solar installer that Anna and Rick Winslow, the Waianae couple, chose for their 7-kilowatt PV system was Honolulu-based Revolu­Sun. Winslow said they avoided much of the up-front cost of the system by opting to lease it from Revolu­Sun, which will sell them back the electricity at 9 cents a kilowatt hour for the next 20 years. The Winslows were able to lower the kilowatt-hour rate by paying $20,000 up front.

Under a traditional solar lease in which the installer pays all of the upfront costs, the homeowner typically pays the installer about 20 cents a kilowatt hour.