Starting Jan. 1, Hawaii became the first state in the nation with a law requiring all new homes built here to include a solar water heater.

But going into the first week of January, many homebuilders were still navigating how to comply with the new law.

The Honolulu Department of Planning and Permitting has been fielding questions from builders and referring them to the state, which oversees the law. Counties will administer the law because they issue building permits, but the state will oversee its implementation.

For starters, utility rebates and tax credits will no longer be available for solar water heaters installed on new homes built this year. Solar water heaters installed on existing homes still qualify.

The average cost of a solar water heater is about $6,250, which is reduced to about $1,200 with the rebate and tax credits.

The Hawaii Energy Efficiency Program said rebates still would be offered to anyone who pulled a building permit before Jan. 1, as long as standard rules for a solar water heater were followed.

Jim Byxbee of Homeworks Construction said some of his permits were held up at the end of the year because they didn't include solar water heating.

Byxbee says he'll have to go back to some clients and adjust estimates to include the extra costs of installing the heater.

“;It's an adjustment for everybody,”; Byxbee said. “;I'm not opposed to it at all. Solar actually makes sense, in my opinion, but there's definitely an adjustment.”;

Still, Byxbee said the $1,000 rebate previously offered by the utilities should stay in place.

The Blue Planet Foundation says a new home cuts its electricity bill by 30 percent to 40 percent - or about $750 a year - by installing a solar water heater.

Craig Watase, president of Mark Development, was caught in between while developing his affordable Ke Ola O Pokai Bay project in Waianae.

Prior to the law, Watase decided to install solar water heaters in every home as a value-added feature to help families save money.

About 50 homes were built prior to the new law, qualifying Mark Development for about $50,000 in rebates (at $1,000 per system). But for the next 70 homes, Watase said, he'll be taking a $70,000 loss.

At the same time, price increases do not bode well for the current real estate market. Watase said he believes solar makes sense, but may not be feasible for every project.

“;If they wanted to make a real impact, make it mandatory for everyone in the state,”; Watase said.

Karen Nakamura, chief executive officer of the Building Industry Association, said builders most likely will pass on the additional costs to the buyer.

Nakamura wonders whether families building new homes will have to choose between an additional room or footing the additional expenses of a solar water heater.

For some large-scale developers like D.R. Horton Schuler, the transition isn't too difficult.

D.R. Horton already was installing solar water heaters at its Kahiwelo at Makakilo subdivision, as well as at its Na Hoku at Maui Lani project.

“;We will continue to work with the solar subcontractors that were in place to put them (solar water heaters) on all houses now,”; said Mike Jones, president of D.R. Horton Schuler.

There are several exemptions to the law - developers can instead opt for a solar photovoltaic system, wind power or tankless gas heater. Also, builders can ask for a variance if the solar water heater is not deemed cost-effective due to the home's location.

Builders opting for those alternatives must have a licensed architect or mechanical engineer apply for the variance from the state.

Dean Masai, state energy analyst, said no variances had been requested as of this week. Masai said building permits simply need to include details of where a solar water heater will be installed.

State and federal tax credits are no longer available to anyone building a home this year with solar water heaters.

“;Once it becomes mandatory, there's no sense making an incentive for it,”; Masai said.