Last Thursday, Senator Bernie Sanders (I-Vt.) introduced solar legislation that has sent the solar industry into a hopeful tizzy: his bill, the 10 Million Solar Roofs and 10 Million Gallons of Solar Water Heating Act of 2010, would authorize rebates and other incentives with the aim of supporting up to half the net installed cost—after factoring in existing federal and state incentives—of 10 million photovoltaic solar systems and 200,000 solar hot water systems across the country. Residential, commercial, government and non-profit solar systems alike would be eligible for the rebates.

Boasting nine co-sponsors, Sanders’ bill is modeled after the generous solar incentives in California and New Jersey, the top states for solar in the U.S. It would offer a direct rebate to buyers of solar systems, starting at $1.75/watt for PV systems and $1/watt for solar hot water systems, declining gradually with either the natural passing of time or with the increased volume of installed solar. To see how this might work—and the money you might save—take a look at our nuts-and-bolts write-up on the California Solar Initiative here.

So what exactly does this mean for you, as the consumer or enterprising business-owner? Grist has an excellent interview with Senator Sanders here, from which we’ve excerpted Sanders’ explanation of how the bill would work.

The [pre-existing] federal tax credit would be up to 30 percent off the cost of a project. That’s a lot.  Let’s say hypothetically you wanted to spend $40,000 on solar. If you take 30 percent off that, you’re down to $28,000. If you get state help you’re down to $25,000. Then the federal government would pay half of that.

While the proposed $2 to $3 billion price tag of Sanders’ initiative is sure to send many on Capitol Hill—and off—up in arms, the senator asserts that his legislation would help to produce 30,000 new megawatts of energy at the end of a 10-year-period. Furthermore, he notes that the proliferation of distributed energy generation is both more cost-effective and labor-intensive than central-plant options, as it avoids the need for increased transmission lines, is faster to build, uses already developed land and creates “more jobs per dollar of investment than its competitors.”