HONOLULU (AP) -- In a state where tropical sunshine is near constant and electricity costs twice the national average, solar power seems an easy answer.

But with the panels that produce the electricity already popular abroad and a batch of new domestic tax credits just kicking in, solar suppliers locally and around the globe are scrambling for stock.

''Those of us with a long vision here aren't jumping up and down,'' said Rick Reed, who has witnessed the fickleness of government incentives for his industry for 25 years. ''But we're sure happy business is good.''

The problem is that while demand for solar panels is increasing, the ability to meet that demand has not caught up, said Reed, president of the Hawaii Solar Energy Association.

The pressure could soon become even tougher in Hawaii as state politicians push for bigger incentives for residents to install the panels. Governor Linda Lingle has proposed boosting the caps on credits for single family homes from the current $1,750 (euro1,475) to $10,000 (euro8,429). The caps for businesses would double to $500,000 (euro421,478).

With a growth rate of almost 40 percent per year over the past five years, the solar panel industry is today worth $15 billion (euro12.6 billion) globally, said Rhone Resch, president of the Solar Energy Industries Association.

And the United States is beginning to catch on.

Citing soaring oil prices and the need for a more reliable and environmentally friendly fuel sources, a number of states and the federal government are pushing rebates and tax credits to encourage people to install solar panels on their roofs.

In a plan detailed earlier this month, President George W. Bush outlined a strategy to increase domestic solar power from its current 175 megawatts to up to 10,000 megawatts in the next decade.

Homeowners in January could begin claiming federal tax credits for installing solar power for the first time in 20 years. And in a bold move earlier this month, California energy regulators approved a plan to provide $2.9 billion (euro2.4 billion) in rebates for solar panels between 2007 and 2016.

Add to that, major government programs in Germany and Japan have already got those countries' markets humming -- and demand has quickly outstripped supply.

At the same time, however, the solar panel industry is being forced to slow down. That is because popularity has put a squeeze on the supply of the silicon, the key ingredient in the panels -- as well as the brains of computers and other high-tech gizmos.

In 2006 the solar industry is on track to use more of the silicon, known as polysilicon, than the entire semiconductor industry, Resch said.

''We've grown to such a point that there is no available polysilicon feedstock to continue to put into the solar industry so that we can grow at that rate,'' he said.

Historically solar was only a third of the market for the polysilicon also used in microchips, said Lara Chamness, senior market analyst for the trade group Semiconductor Equipment and Material International.

''But the solar guys are using more and more of the polysilicon than ever before. So that's causing a really tight supply situation and prices are going up accordingly,'' she said.

Contract prices are coming in at $70 (euro59) per kilogram, up from $30 (euro25) per kilogram just two years ago, she said.

The big players on the microchip market, such as IBM and Intel, are aware of the problem, but they are not showing any fear, she said. A spokesman for high-tech giant Intel said his company has long-term contracts with its suppliers.

And those companies use very little of the precious material in each of their products, so they can easily pass on the higher prices to customers, Chamness said. By contrast, polysilicon is the main ingredient covering the coffee table-size solar panels.

So with stocks scarce and raw material prices high, the prices for solar panels have yet to drop.

Polysilicon makers are moving to boost their supply.

Hemlock Semiconductor Corp., which is majority-owned by Dow Corning Corp., is the top supplier of polysilicon to the solar market. It is now working to double its capacity in the next two years with a $500 million (euro421 million) expansion at its Michigan facility.

The unforeseen government incentives for solar as well as the microchip industry's recovery after the dot-com bubble burst added to the unpredictability, said Marie Eckstein, vice president of advance technology and venture business at Dow Corning.

She said that for now the shortage is compelling the solar industry, which is still striving toward maturity, to find different ways to use silicon -- including less of it.

''I think we're just in startup pains,'' she said.

Reed said he's seen excitement for solar before. He's also seen it quickly fade when oil prices drop or when the White House changes hands.

But there are signs that the industry is maturing, he said, and the ups and downs aren't what matters anyway.

''At the end of the day, we're saving the world one roof at a time,'' he said.

On the Net:

Hawaii Solar Energy Association: http://www.hsea.org/

Solar Energy Industries Association: http://www.seia.org/

Semiconductor Equipment and Material International: http://www.semi.org/

Hemlock Semiconductor Corp.: http://www.hscpoly.com/

By Associated Press