First-in-nation solar law comes with concerns

Lingle OKs a measure requiring solar water heaters in new homes

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Gov. Linda Lingle approved a bill yesterday that makes Hawaii the first state to require solar water heaters in new single-family homes starting in 2010.

But opponents said the measure will increase the already high cost of new houses and take away a 35 percent state tax credit for the installation of solar water heaters.

Lingle said Hawaii should capitalize on using natural renewable energy sources to cut the state's dependence on imported oil.

The governor said she would try to restore the tax credit during next year's Legislature.

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Hawaii became yesterday the first state to require new single-family homes to be built with solar water heaters.

Enlightening FACTS » Number of homes with solar water heating units statewide: 85,000 » Ratio of homes with solar water heaters in Hawaii: 1-in-4 » Estimated cost of installing a solar water heating unit: $6,000 » Number of Hawaii residents who have collected a HECO rebate for the installation of a solar water heater (total number): 1998: 3,568 (6,861) 1999: 3,545 (10,406) 2000: 3,379 (13,785) 2001: 2,767 (16,552) 2002: 3,001 (19,553) 2003: 3,304 (22,857) 2004: 2,960 (25,817) 2005: 3,504 (29,321) 2006: 4,452 (33,773) 2007: 5,295 (39,068) 2008*: 2,940 (42,008) * Half-year Source: Hawaiian Electric Co.

Gov. Linda Lingle signed the measure, Senate Bill 644, SD 3, HD 3, CD 1, into law yesterday to reduce Hawaii's dependence on imported oil. It requires all building permits for single-family homes issued after Jan. 1, 2010, to include solar water heaters.

Exceptions will be allowed where homes have poor sunlight; if it is cost-prohibitive after 15 years; when the dwelling has a substitute renewable energy source; or if there is an approved tankless water heater and another appliance, both powered by gas.

Proponents praised the new law, Act 204, as helping to increase Hawaii's use of renewable energy, but some unlikely opponents say it is significantly flawed. Both sides say the law still needs work.

Lingle said in a news release that the law is an important step in "our long-term plan for energy independence in Hawaii."

"In addition to solar, it is critical that we continue to develop innovative energy solutions that capitalize on our natural renewable resource advantages in order to achieve our goal of having 70 percent clean energy in Hawaii by 2030," she said.

But the governor raised concerns about the measure's wording, which eliminates a 35 percent tax credit next year for residential developers who install solar water heaters and for homeowners who make the installation on their houses starting in 2010.

She said she will introduce legislation next session to restore the tax credit.

Opposing the bill was the Building Industry Association of Hawaii, which represents contractors, developers and suppliers.

BIA Chief Executive Officer Karen Nakamura said the law would raise the cost of homes. She said the law not only eliminates the 35 percent state tax credit, but a $1,000 HECO rebate for new home buyers.

Nakamura said that first-time home buyers who are already having trouble qualifying will suffer the most because the additional cost will make buying a new home further out of reach.

"The total cost is being put on their backs," she said.

Sen. Gary Hooser (D, Kauai-Niihau), who introduced the bill, said, "With oil $140 a barrel, this is especially timely and will save consumers money, create additional energy security for the state and dramatically reduce greenhouse gas for the environment."

He said he is hopeful other states will follow Hawaii's lead.

The bill eliminated the state tax credit after 2010 because it was intended for homeowners and not developers, he said. Any issues can be corrected next legislative session, he said.

While the cost of a home will increase, the cost of homeownership will decrease, he said.

Peter Rosegg, Hawaiian Electric Co. spokesman, said a solar water heater costs $5,000 to $6,000 to install and saves a family of four $40 to $60 a month, or about 30 percent of the homeowner's electricity bill.

Another opponent of the bill is Solar Energy Industries Association, Hawaii, which represents some 25 businesses that install a majority of the solar water heaters in Hawaii.

The law has a loophole that will allow developers to opt out of the mandate by heating the home with a tankless water heater using gas instead, said group Vice President Rolf Christ.

"That gets him off the hook," said Christ, who is afraid more developers will take that option. "To the builder it makes no difference."

Christ, who is also owner of R&R Solar Supply, the only manufacturer of solar water heaters in Hawaii, said he expects his business will rise with the mandate, but said the law will make solar water heaters less affordable for people buying homes.