In a medium skillet over medium-low heat, melt 2 tablespoons butter. Sauté onions and 1/2 teaspoon salt until soft, about 20 minutes. Add sugar, raise heat to medium, and cook, stirring frequently, until onions begin to brown, 5 minutes. Add 3 tablespoons water and stir to deglaze skillet. Cook until onions are brown, 5 to 8 minutes. Set aside.