I am installing a Takagi T-H2-DV water heater. For some reason the installation manual says not to use cellular foam core PVC pipe for the air intake and exhaust pipes. What would be the reason for this? All the local stores only carry the cell core pipe.

That is something I would ask the manufacturer or their rep. Certainly some heat in the exhaust but other than that, not sure. However, cellular PVC has more flex and must be supported well. We used cellular PVC on a 92% heater running through the trusses. After a couple of months, a sag developed and the high pressure sensor shut down the heater. Rehung with more supports and that was 6 years ago. Maybe that is part of their reason.