The story appeared on the front page of the Sunday Star-Advertiser’s Money section, the headline in bold stretching the width of the page. A subhead added: “More than 20% of new homes use loophole to avoid adding solar.”

The narrative seemed compelling. But, as far as I can tell, it’s wrong.

Here’s how the Star-Advertiser presented the story. Home builders have found and are exploiting a loophole by getting variances from the solar water heating requirement. I think the loophole the story refers to is installing more expensive photovoltaic systems, which then have to generate electricity to heat water. Turns out this is more expensive for consumers than just going directly to solar water heating.

From the story:

Although solar water heaters have been used in Hawaii for decades, they have been overtaken in popularity by photovoltaic electrical generation systems.

“We’ve had pretty explosive growth on the PV side, but flat on hot water,” Richmond said.

Many consumers do not realize that heating their water with a solar water heater is more efficient than using a PV system to generate the electricity to power a water heater, said Carilyn Shon, energy conservation program manager for the state Department of Business, Economic Development and Tourism.

“Before you even think about PV, you need (to) think about solar water. It’s significantly cheaper to install a solar water heater than PV,” she said.

But one little problem. The data contained in the story contradicted this narrative. The supposed “loophole” isn’t a loophole, and photovoltaic systems aren’t being substituted for solar water heating, at least not in more than a handful of cases.

Bottom line: The story and headline are wrong.

Loophole? Here’s the dictionary definition.

Definition of LOOPHOLE

1 a : a small opening through which small arms may be fired

b : a similar opening to admit light and air or to permit observation

2 : a means of escape; especially : an ambiguity or omission in the text through which the intent of a statute, contract, or obligation may be evaded

But, as the article makes clear, the new homes being built without solar water heating are not relying on “an ambiguity or omission” in the new law. They are, very clearly, relying on a provision of the new law allowing the substitution of other kinds of energy saving water heating under limited and well defined circumstances.

According to the story, almost all variances result from the builder, or homeowner, choosing to install a tankless gas water heater along with at least one other gas appliance.

Of 390 variances cited in the story, 383 were for use of gas heaters. That’s over 98% of the variances granted. Of the remainder, at least some were likely due to locations where solar won’t work. So these numbers don’t support the idea of the PV “loophole” being a problem.

And this isn’t a loophole. Use of tankless gas water heaters or alternative renewable energy sources (like PV) is specifically provided for in the statute, which was passed by the legislature in 2008 and went into effect as of the beginning of this year.

Check the language in SB644 CD1 (2008), the bill that created the solar water heating requirement:

A variance shall only be approved if an architect or engineer licensed under chapter 464 attests that:
(1) Installation is impracticable due to poor solar resource;

(2) Installation is cost-prohibitive based upon a life cycle cost-benefit analysis that incorporates the average residential utility bill and the cost of the new solar water heater system with a life cycle that does not exceed fifteen years;

(3) A substitute renewable energy technology system, as defined in section 235-12.5, is used as the primary energy source for heating water; or

(4) A demand water heater device approved by Underwriters Laboratories, Inc., is installed; provided that at least one other gas appliance is installed in the dwelling. For the purposes of this paragraph, “demand water heater” means a gas-tankless instantaneous water heater that provides hot water only as it is needed.

Subparagraph (3) applies to photovoltaic systems, or other renewable energy technologies, while (4) specifically allows tankless gas heaters.

The variance for tankless gas heaters is not a surprise. The Gas Company lobbied hard to be sure that tankless gas heaters were included, citing the product as energy efficient. Others point out that tankless gas heaters are widely used in other countries.

And with the popularity of high-end gas ranges for cooking, it doesn’t surprise me at all that some homeowners opt to take the tankless gas heater option to go with their gas kitchens.

So homebuilders aren’t skirting the law, they are following it by applying for variances where appropriate. And the loophole so prominently mentioned? It doesn’t seem to exist.

It looks to me as if there are two parts to the story. There are new homes, covered by the requirement to have solar water heating, and then there are all those existing homes which could be retrofitted.

It is very possible that some companies are trying to upsell customers who are looking to retrofit existing homes, pushing them towards more expensive photovoltaic systems when they inquire about solar water heating. But that’s not what the headline and the story appear to have been referring to.

So I have to wonder whether this story originally addressed the two parts of the market, new and existing homes, but became jumbled in the editing process.

Bottom line, though, is that readers were given an incorrect image of crafty homebuilders evading the law while getting variances under false pretenses. Data provided in the story not only fail to support the idea, they contradict it. And readers, like myself, are left confused.