Several weeks ago, we relayed news that Texas was to launch a statewide solar incentive program. The state legislature was reviewing a bill that would allocate $500 million in rebates for utility-scale and small-scale rooftop solar installations. Serious cash was on the table. Observers rejoiced when a net-metering bill and the solar incentives passed the Texas Senate. We dreamed of a $2.40/watt rebate for residential solar panel systems, and a rebate of $1.50/watt for commercial systems. Optimism abounded.

Then, late on Friday, May 29th, the bill died in the legislature — this despite its having strong support among both Democrats and Republicans. Solar rebates in TX, it seems, are off the table until 2011 at the earliest. On these developments, a few quick points are relevant.

First, it’s clear that, when it comes to policy making, nothing is a done deal until the ink has dried on the page and the money is fully allocated in the budget. (Show me the money!) Beyond getting people’s hopes up, the two-steps-forward, one-step-back nature of politics can impede good decision making. People in the business world, for example, often talk about the importance of having regulatory certainty — the idea that, without a clear idea of what to expect in terms of rules and regulations, it’s damn-near impossible to plan for your business. Indeed, this has been one of the main themes in the debate over U.S. federal climate legislation.

Regular consumers, too, face similar challenges. If you thought the state was going to levy a tax on, say, gasoline, you may decide against buying a Hummer. If in the end that tax bill didn’t pass, you may end up cursing the government for biasing your decision to buy an under-powered compact. Obviously, I’m talking in extremes here. But the point remains the same: like or not, government decisions form the broad basis on which all other purchasing decisions are made. This is particularly true when it comes to something like solar photvoltaic (PV) panels, which currently make the most financial sense when they receive strong government incentives — from the federal government and individual state governments. Simply put, in order to know whether getting solar makes sense, you need to know how much incentive money is available. (We try to answer that question here at GetSolar, and any solar installation pro will help you navigate state and federal solar incentives.)

California lawmakers, for example, understand the importance of regulatory certainty — at least when it comes to solar rebates. To enable buyers to plan effectively, the California Solar Initiative makes clear the structure of its solar rebates and incentives. Since there are no surprises, people have all the information they need to make a sound purchasing decision.

Long story short: Texas just poured a whole lot of cold water on statewide interest in solar. The real kicker is that, in so doing, TX lawmakers may also being foregoing a whole lotta job creation and investment in manufacturing. Just check out this recent story from the Memphis Business Journal:

If Texas doesn’t want money to develop solar energy, Tennessee will take it, say some state Democrats.

Over the weekend, Texas legislators let the clock run out on a bill that would have created a $500 million rebate program to build solar installations in the Lone Star State.

On Tennessee’s Capitol Hill Monday, Sen. Jim Kyle was quick to capitalize.

“To any company that had an eye on Texas, we say come on up to Tennessee,” said Kyle, D-Memphis, who is sponsoring Gov. Phil Bredesen’s energy bill.

Bredesen has proposed using $600 million in stimulus bill funds to create a Tennessee Solar Institute and West Tennessee Solar Farm that would bring together the resources of the University of Tennessee, Oak Ridge National Laboratories and new companies investing here that will produce solar components, including Wacker Chemie in Bradley County and Hemlock Semiconductor in Clarksville.