Most new homes in Hawai 'i will need to come with a solar water heater under a law that takes effect today.

The legislation is one of only a handful of new laws that kick in on this New Year's Day.

Others address everything from naturopathic physicians to court document process servers and a cell phone ban for Big Island motorists.

But it's the so-called "solar roofs" law that puts Hawai'i on the map, since no other state mandates that new housing have solar water heaters.

The law is hailed by environmentalists, who say solar heaters are not only environmentally friendly, they save consumers money. But some in the solar heating industry still have concerns about the law's efficacy and some loopholes.

Enacted in 2008 but mandated to begin today, the law says a building permit cannot be issued for a new single-family structure that does not include a solar water heater system meeting certain standards.

A homebuilder may, however, apply for a variance through the state Department of Commerce and Consumer Affairs' energy resources coordinator, under some circumstances.

Jeff Mikulina, executive director of the nonprofit Blue Planet Foundation, said that with a solar water heater, the typical homeowner will pay 30 percent to 40 percent less on their electric bills, or about $750 a year, depending on the number of people in the household and how much water they use.

For a new house, a system would cost roughly $5,000 to $6,000, so it should pay for itself within 10 years. "It's just a matter of when," Mikulina said.

Carilyn Shon, the state's energy conservation program manager, pointed out that petroleum experts are estimating that oil prices will more than double in the coming two years, providing additional incentive for people to go to solar water heating.

"The people who are going to install solar water heating as of 2010, or who already have it, are going to be the beneficiaries," Shon said.

From the environmental standpoint, the law will reduce greenhouse gas emissions statewide by 8,000 tons annually from avoided electricity use, according to the Blue Planet Foundation, which aims to make Hawai'i energy independent.

TAX CREDITS GONE

Gentry Homes began installing solar water heaters on all its new homes in its Ewa By Gentry development around 2005, according to Mike Brandt, the company's vice president of engineering.

"It was a big hit with the buyers," Brandt said.

"It's a win-win all around," said Debra Luning, Gentry's director of governmental and community affairs. Besides being the "green" thing to do, "the buyer is getting good value for the dollar, and it helps us sell homes when people see a lot of value included in their homes."

The company has won several homebuilding awards related to being O'ahu's first developer to go all-solar, Luning said.

But some concerns about the mandate have been raised by those in the solar heating and building industries.

Ron Richmond, a manager at Inter-Island Solar Supply, said that individual homebuilders had already begun moving to solar water heating, largely because of rebates offered by HECO and tax credits by the state.

But those rebates and tax credits go away starting today, Richmond said.

"That cost will be passed on" to homebuyers, said Brandt, of Gentry. "More and more builders were starting to offer it as a standard feature, so (the law) ... wasn't necessary."

Gentry, other developers and the Building Industry Association of Hawaii voiced objections to the bill on those grounds.

GAS LOOPHOLE

Richmond's company is also concerned that there are too many loopholes in the law that allow a homebuilder to opt out of installing a solar water system.

The law says exemptions can be allowed if a homebuilder can demonstrate a home is being built in a "poor solar resource" area, or that a solar water heater is cost-prohibitive based on a 15-year life cycle cost-benefit analysis.

A related major concern, which is shared by environmental interests, including the Blue Planet Foundation, is language in the law that allows homebuilders to receive a variance if they choose to install a tankless gas water heater, in combination with another gas appliance.

Richmond said it makes no sense to allow gas water heaters as an option.

"The whole justification for the mandate was to get us off of oil," he said. "But all of our gas here is made from oil."

Said Mikulina: "Blue Planet believes that gas water heaters should only be allowed if the homeowner can demonstrate that using solar is not the most cost-efficient option."

Mark Duda, president of the Hawai'i Solar Energy Association, acknowledged the mixed feelings his industry has for the new law.

"We're in favor of anything that makes solar more available and more widely used," Duda said. "But we have an enormous concern with the gas loophole. There's really nothing in the law that prevents a developer from using gas if they want to use gas."

Last year, the Legislature attempted to clarify the bill, inserting language that states that variances "will be rarely, if ever, exercised or granted."

Both industry leaders and environmentalists said they will be monitoring the situation to ensure there is not a wholesale move by homebuilders toward tankless gas water heaters.

The DCCA's Hawai'i State Energy Office will begin accepting applications for variances via its Web site beginning Monday. A link will be provided from http://hawaii.gov/dbedt/info/energy.