Ho‘opili poised to join many exempted from solar heater law

In 2010, Hawaii became the first state to require new single-family homes be built with solar water heaters.

Republican Gov. Linda Lingle signed the measure, saying it was a key step toward breaking the state’s dependence on imported oil.

But in the six years since passage, more than 30 percent of the 14,375 new homes built were completed without solar water heaters.

The state has approved 99 percent of builders’ requests for exemptions from the law.

Now the largest Hawaii development in at least two decades, the 11,750-home Ho‘opili community on Oahu’s Ewa Plain, is set to add to the number of exemptions.

D.R. Horton, owner of Ho‘opili, is advertising its first phase of homes will have tankless gas water heaters. Hawaii Gas has been working with Ho‘opili on supplying gas to the new development.

Some supporters of Hawaii’s renewable energy goals object to the use of gas at Ho‘opili.

“Building out new fossil fuel infrastructure would be starkly at odds with the state’s commitment to transition to 100 percent renewable energy,” said Richard Wallsgrove, policy director at Blue Planet Foundation.

D.R. Horton declined to comment on its plans for gas water heaters at Ho‘opili.

Typically, builders favor gas water heaters to keep costs down. The average gas tankless water heater is $1,500. A solar water system can add up to $6,000 to the price of a new home, even though over time it may prove to be cheaper.

David Sands, chief architect and co-founder of Bamboo Living, has built several homes without solar water since 2010. He said his clients decided to apply for a variance because of the cost, and many already had a gas appliance.

“As much as anything, it has been a budget issue,” Sands said. “If they are already putting propane gas for a stove, then it’s an inexpensive way for them to get into the house. Most of my clients want to be fully solar anyway, but some of the time they’re starting with a limited budget. So they’ll opt to wait to do the thermal panel until later, once they’re in the house.”

‘A broken promise’

The solar water law, as amended, says variances “will be rarely, if ever, exercised or granted because the burden of proof will lie with the applicant to demonstrate that a solar water heater system, regardless of location or circumstance, is not cost effective in the context of a thirty-year mortgage term.”

As of January, 4,484 homes were approved to be exempt from the law, out of 4,509 applications submitted to the Department of Business, Economic Development & Tourism.

From 2010 to 2016, there were 14,375 building permits issued for single-family homes, according to data compiled by DBEDT. Some 4,428 of those have been exempt from the law.

The applicant with the highest number of variances is architect Robert Smelker, who submitted 1,770 applications, most for homes on Hawaii island. Smelker declined to comment.

Environmentalists said they were concerned with the overuse of the variance, as the state works to meet renewable energy goals.

“The gas water heater loophole has been used far more frequently than lawmakers intended,” said Wallsgrove. “We simply cannot afford to see this trend expand to the 11,000-plus homes planned for Ho‘opili, and other developments across the state.”

Wallsgrove said Ho‘opili seeking to use gas water heaters contradicts the developer’s original promises.

“Consumers were led to believe that Ho‘opili is committed to green design elements, including cutting monthly household energy usage by 15 to 30 percent with solar hot water and other smart energy efficiency solutions. The developer even said that ‘all of these features should be standard in any 21st century project.’”

The requirement for solar water heaters was mentioned in Ho‘opili’s environmental impact statement in 2008.

“To switch at the last moment, and now use water heaters powered by fossil fuels, would look a lot like a broken promise,” Wallsgrove said. “And building out new fossil fuel infrastructure would be starkly at odds with the state’s commitment to transition to 100 percent renewable energy.”

But because of the loose law, the switch is legal.

DBEDT has granted D.R. Horton variances for the solar water heating mandate for 91 properties. Ten properties in D.R. Horton’s first phase of the Ho‘opili development have been approved for a solar water heater variance.

Efficiency dispute

D.R. Horton has brought Hawaii Gas into the project. In a request for proposals issued by Hawaii Gas in December, the gas utility said it was seeking a supplier of 170 tankless gas water heaters for the gas utility to lease to the homeowners of Ho‘opili. Hawaii Gas’ request said it was to provide an option for the homeowners living in the first phase. Hawaii Gas said recently it hasn’t selected a supplier for tankless heaters and the request for proposals was just to gather information.

“Tankless water heaters are one of the most cost-efficient ways to heat water,” said Nathan Nelson, vice president, general counsel and secretary at Hawaii Gas. “We’re pleased to be working with D.R. Horton on the Ho‘opili development, and are confident that they will be obtaining all appropriate variances that may be required.”

The tankless water heater is up to 34 percent more efficient than a storage water heater, according to the U.S. Department of Energy. The 20-year life of the tankless water heater also beats the storage water heater’s 10- to 15-year life.

According to the law, homes can be built without solar water heaters if the installation is impractical because the home isn’t in a sunny area, installation is too expensive based on a life cycle cost-benefit analysis, a demand water heater device approved by safety consulting firm Underwriter Laboratories Inc. is installed, or at least one other gas appliance is installed in the home.

Solar water heating systems usually have higher upfront costs than conventional water heating systems, but residents usually save money in the long run with solar.

Adding a solar water heater to a new 30-year mortgage usually results in homeowners paying between $13 and $20 a month extra, according to the U.S. Department of Energy. The federal income tax deduction for mortgage interest if a home has a solar system reduces that by about $3 to $5 a month.

The U.S. Department of Energy said that if a homeowner’s fuel savings are more than $15 a month and the cost of the solar system is folded into the mortgage, solar saves homeowners money immediately.

Marti Townsend, director of the Sierra Club Hawaii Chapter, said Ho‘opili seeking to use gas water heaters is a misuse of the variance to the solar hot water mandate.

“It is undisputed that solar hot water heaters are cheaper than water heaters that rely on fossil fuels,” Townsend said. “Because these massive loopholes are being exploited, new homeowners will be paying more in electric and gas bills, and will have to spend even more to convert to solar hot water in the future. This is not the promise Ho‘opili developers made to the community. This loophole directly contradicts our commitment to a 100 percent clean-energy future and should be immediately amended.”

Environmental battle

This isn’t the first time D.R. Horton has come head-to-head with Hawaii’s environmentalists.

The 11-year battle to begin development on the land sandwiched between Kapolei and Ewa consisted of opponents arguing that the new development would impact traffic and use prime agricultural lands. Supporters argued that the Ho‘opili project is needed to ease Oahu’s housing shortage and, to a lesser extent, create jobs.

Sen. Stanley Chang (D, Hawaii Kai, Kuliouou, Niu Valley, Aina Haina, Waialae-­Kahala, Diamond Head) proposed a bill this session, SB 1121, to close the loophole in the solar water heater law. Chang says the need to amend the law is “particularly sharp at a time when substantial new residential tracts are being developed.”

“We just wanted to make sure the original intent of the program was going to be upheld,” Chang said.

As of late last week, the bill hadn’t been scheduled for a hearing, a key first step for any bill to progress.