With the big, bad bailout hogging most of everyone's time, it's amazing that our legislators got anything else accomplished this week. In a sure-to-be-underreported event, the Senate on Tuesday approved a bill extending the investment tax credit (ITC) for various renewable energy sources.

The meatiest piece of the bill definitely goes to the solar industry. A solar tax credit, set to expire at year's end, would be extended for eight years. This credit amounts to 30% of the cost of installation for both residential and commercial installations. A $2,000 cap on the residential credit would also be removed.

This legislation has been voted down more times than I can count, and -- along with some Spain pain -- has weighed somewhat heavily on the solar sector. The market response today is justifiably giddy, with Yingli Green Energy (NYSE:YGE) up handsomely, and share prices of domestic players like Energy Conversion Devices (NASDAQ:ENER), Evergreen Solar (NASDAQ:ESLR), and SunPower (NASDAQ:SPWR) acting particularly perky.

The importance of this legislation goes beyond simply getting more panels on more rooftops. Suntech Power (NYSE:STP) has explicitly tied its future investments in U.S.-based production to renewal of the ITC. The new legislation should also help create a lot more jobs, too. Navigant Consulting (NYSE:NCI) pegs the figure at around 440,000 permanent job additions.

I know that not all of my readers will be happy to subsidize energy production that isn't cost-competitive today. Given past adventures with synthetic fuels and other technologies, our country's record is spotty in that regard. But between supporting a rapidly growing industry with a fairly clear roadmap to profitability, and an industry that made reckless lending, securitization, and rating decisions -- imperiling our whole economy in the process -- I'll opt for the former support any day.

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Fool contributor Toby Shute doesn't have a position in any company mentioned. The Motley Fool has a disclosure policy.