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Was mandating solar water heaters for new homes good policy?

Sen. Gary L. HooserSEN. GARY L. HOOSER
 Ron Richmond

Hawaii is the first state in the nation to require that all new single-family homes built after Jan. 1, 2010 be equipped with solar or other energy-efficient hot water systems.  Such laws already exist in Israel, Spain and other European communities and the public benefits resulting from the passage of this bold and innovative measure are huge and indisputable.

With the price of crude oil exceeding $140 per barrel, Hawaii's near-total dependency on imported petroleum is killing our economy, hurting our environment, and placing our state in an extremely precarious position.  Another Hurricane Katrina, a shipping disruption, a blockade by Iran of the straits of Hormuz, or an act of terrorism in an oil-producing region — any single occurrence could result in a total shutdown of our economy.

During the first decade of implementation, this measure will cut oil consumption in our state by an estimated 1.6 million barrels, inject nearly $2 billion in energy savings into our local economy, and prevent the emission of over 550,000 tons of greenhouse gases.

While the new law is widely seen as a solar hot water mandate, it also allows for other energy-efficient alternatives, establishes a process to ensure quality control, and retains existing solar tax credits for homes built prior to 2010.  

The best, cheapest and most efficient time to install a solar system is when a home is new, and economies of scale will lower the cost of installation statewide. While slightly increasing the initial cost of home ownership, this measure decreases the actual long-term cost as energy savings result in an immediate net financial benefit.

Mandating energy-efficient water heating in new homes just makes sense, and is a major step toward increased energy security, economic prosperity and environmental responsibility.
Solar mandate proponents are well-intended individuals enthralled by the idea of reducing Hawaii’s dependence on oil by requiring solar water heating systems on all new homes beginning in 2010. Along the legislative way they lost focus on the actual content of SB 644. The end result is numerous negative consequences that make this mandate bad law.

First, the law mandates choice, not solar. In fact, it provides builders four ways not to do solar. Three of the variances allow fossil-fueled water heaters, one allows tank-less gas water heaters, but only if the builder includes one additional gas appliance. It’s also worth noting that local gas comes from oil.

Second, the law eliminates tax credits. Beginning in 2010, tax credits are no longer available to single-family new homebuyers and existing homeowners. Eliminating tax credits for new homebuyers was expected. Governments do not usually allow tax credits for something they mandate. What is surprising is that the final version of the bill also eliminates the tax credits for existing single-family dwellings if the building permit is issued after Dec. 31, 2009.

Elimination of the tax credit increases the system cost by up to $2,250. The mandate will also result in the elimination of the $1,000 utility rebate. The utility is prohibited from giving rebates on something that is required. The result increases system cost by up to $3,250.

Hawaii has the most successful solar hot water market in the nation. This is in large  part because of the utility’s 100-point system inspection. At least one previous version of SB 644 provided for inspections of mandated systems. The final version does not. Without inspections there is no quality assurance.

Choice, increased cost and no inspections may result in less, not more, solar benefits. Hawaii leads the nation without solar mandates.

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