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The glaring loophole in what was as the nation’s first solar water heater mandate won’t be closed this year. If anything, it might be getting wider.

proposes to shift responsibility for administering a key exemption to the law from the state to the individual counties.

A two-part Civil Beat investigation in November — Part 1 and Part 2 — revealed that more than 20 percent of new homes permitted in the first ten months of 2010 were set to install not solar-powered but gas-powered water heaters. Half the new homes on Kauai and the Big Island took advantage of the loophole.

The investigation also revealed that many of the applicants were not homeowners but developers.

Hundreds of applications were quickly approved by the Department of Business, Economic Development and Tourism. The state employee in charge of reviewing applications told Civil Beat that he wasn’t aware that the law intended to exclude developers.

Told about the variances, House Energy and Environmental Protection Committee Chair Hermina Morita¹ — one of the lawmakers that helped shape the law — was angry.

“There are a handful of individuals who are intent in undermining the intent of the law. We tried to give as much flexibility as possible, we tried to give as much leeway as possible to some legitimate concerns,” she told Civil Beat last year. “But I know it’s being abused, and it looks like it’s being abused by a handful of architects. And I’m not sure how to approach that problem except asking DBEDT to ensure that this isn’t the architects’ preference but this is the homeowners’ preference.”

Instead, it appears, DBEDT will be taken out of the equation altogether.

The new bill, proposed by Senate Energy and Environment Committee Chair Mike Gabbard², would make the county planning departments responsible for approving any variance to the law. Those are the entities that are already handling building permits, so Gabbard said it will streamline the process.

“I just think that this is the way to go because it would simplify the process,” he told Civil Beat Wednesday. “To me, it makes it easier for the homeowner.”

To ease the burden on the counties, the bill would authorize them to impose fees to cover the cost of administering the variances. Under , the state has also been authorized to recoup its expenses through fees deposited in the energy security special fund, but did not do so. Gabbard said the program was costing the state staff time and money.

Asked if he believes the counties will be able to handle the responsibility, Gabbard said his time on the Honolulu City Council made him confident. His daughter, Tulsi Gabbard Tamayo, now serves on the City Council.

It’s unclear if the counties will do a better or worse job of administering the law than the state has done. The state’s energy office has as one its missions attaining the goals laid out in the , while the counties’ planning departments have no such expectation.

In testimony opposing the bill, the Sierra Club instead suggests that the Legislature give the state’s energy resources coordinator “the discretion and responsibility to review variance applications.”

“This allows the coordinator to grant the variance in legitimate situations — like a infrequently-used vacation rental house — and deny developers that are simply trying to flout the intent of the law, namely to ensure Hawaii residents obtain the cleanest and cheapest form of energy.”

One of the Sierra Club’s proposed changes to the bill would require each application to include the name of the dwelling owner, presumably as a way to weed out developers. The Legislature clarified the law’s intent in 2009 to exclude developers from using the gas loophole, but former state Energy Administrator Ted Peck told Civil Beat last year that statements of intent don’t have the force of statute.

“In any case, we’re going to work with the Legislature and the administration next year to see if we can get that more explicit and more defendable,” Peck told Civil Beat. He has since resigned to join a hui trying to buy Hawaiian Electric Co.

Asked about closing the loophole, Gabbard told Civil Beat he’s willing to take a look. He attempted to do something similar when he introduced in 2009, but said he wasn’t able to pass it over concerns from colleagues who said it would unfairly hurt neighbor island residents who are more dependent on natural gas.

Another Gabbard bill — — would have required the gas company to meet the same portfolio standards as the electric company: 25 percent renewable by 2020 and 40 percent clean by 2030. It was amended to simply require the gas company to report its use of renewable resources and signed into law as Act 30.

He said he takes the gas company at its word when it says it will [pdf] and become 50 percent renewable by 2015.

“You just do the best you can,” Gabbard said.

For others, there’s a higher target.

“The solar mandate was a critical step in securing Hawaii’s energy future, reducing our contribution to global climate change, and improving the affordability of housing in Hawaii,” the Sierra Club testimony concludes. “Respectfully, we ask this Committee to reject 25% or 50% success, and instead ensure a solar water heater on each and every home in Hawaii.”

SB1372 is before the Energy and Environment and Public Safety, Government Operations, and Military Affairs Committees this afternoon. If it passes, it would then be referred to the Ways and Means Committee.

DISCUSSION Should the Legislature take steps to close the loophole in the solar hot water law? Join the conversation.