Hidden in the fine print of the massive Wall Street Bailout bill that was signed into law last week was a tax credit extension that had alternative energy companies, especially makers of home solar systems, dancing with joy. Instead of losing the federal tax credit at the end of the year, which seemed likely until Wall Street forced Congress to stay in session longer, consumers who install photovoltaic systems will now receive far greater tax savings than they currently enjoy. To put it bluntly, the federal government is willing to pay 30% of your cost to go solar. For a description of the roller-coaster ride that these tax credits have taken over the last few months, read my post from last week, Senate Bailout Plan Could be Boon for Alternative Energies, Home Solar.

Now that the bill has become law, it’s time to reassess the overall costs and return on investment for a home photovoltaic system. Because of their up-front expense, Photovoltaic systems are often viewed as a luxury for the wealthy. And with the down economy it is possible that even these impressive tax credits won’t cause a spike in the purchase of photovoltaic systems. Convincing someone to invest tens of thousands of dollars in something that may take a decade to pay itself off is a hard sell. Let the hard sell begin:

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