I just read some exciting news. Congressman Dennis Cardoza (D-CA) has introduced, along with 75 co-sponsors, the Empowering America Act of 2006. The bill would change and enhance the current tax credits afforded to citizens who invest in solar technologies such as photovoltaic panels and solar water heats.

Specifically,

Residential Solar Tax Credit: Extends a 30-percent tax credit, created in the Energy Policy Act of 2005, for the purchase of residential solar water heating, photovoltaic equipment, and fuel cell property. Allows the ITC [Investment Tax Credit] to be taken against the alternative minimum tax. Changes the maximum credit to $4,000 for each kilowatt of capacity for solar equipment and $1,000 for each kilowatt of capacity for fuel cells. Expires after December 31, 2015.

It also makes it so that neighborhood covenants cannot block people from adding solar panels to their roofs. All very awesome news!

So lets do the math on this new bill… Will it make photovoltaic panels much more economical? How much more economical will it make solar water heaters?

Update: Added info on solar water heaters.
Update 2: Added info on the environmental impact of this bill.