New Mexico’s Key Solar Incentives: A Breakdown

Image source: Canva.com

New Mexico has become a growing hub for solar energy, thanks to its abundant sunshine and a range of incentives that make solar more accessible and affordable for residents and businesses. From generous tax credits to net metering and solar rebates, the state offers a variety of financial tools to help lower the cost of solar installations. In this guide, we’ll break down New Mexico’s key solar incentives, explore how they work, and explain how they can help you save on your solar investment while contributing to a cleaner energy future.

The Residential Clean Energy Credit

The Residential Clean Energy Credit, previously known as the Federal Investment Tax Credit (ITC), can reduce the cost of your solar panel system by 30%. This incentive covers the entire system, including equipment, labor, permitting, and sales tax.

To claim this incentive, you need to purchase your system with cash or a solar loan, as leasing does not qualify for the ITC. You must have a sufficient federal tax liability to use the credit, though any unused portion can be rolled over year-to-year until the ITC expires at the end of 2034. Direct payment of the ITC is only available to tax-exempt entities, such as nonprofit organizations.

Net Metering

New Mexico has implemented a net metering policy designed to reward solar energy system owners for the excess electricity their panels generate. Under this system, when your solar panels produce more energy than your home or business consumes, the surplus is sent back to the grid. In return, you receive credits on your utility bill. These credits can be applied when your solar system isn’t generating enough power, such as during cloudy days or at night. By banking these credits, you can offset future energy costs, making solar energy an even more attractive investment. This system not only helps you save money but also supports a more sustainable energy grid by utilizing locally produced, renewable energy. Additionally, any remaining credits at the end of the billing cycle may roll over or, in some cases, be redeemed for financial compensation, depending on the utility provider’s policies.

Sustainable Building Tax Credit (Personal)

Residential buildings that are certified as sustainable homes may qualify for a tax credit. Eligible residential buildings include single-family homes, multi-family homes, and Energy Star-certified manufactured homes. These buildings must be certified as Build Green Gold or higher, LEED-H Gold or higher, and must be broadband- and electric vehicle-ready. The tax credit amount depends on the building’s square footage, the certification level achieved, and whether it qualifies as affordable or low-income housing. Additional credits can be received if a residential building is fully electric or certified as zero-carbon, energy, waste, or water-efficient. Existing residential buildings can also earn tax credits for installing energy-saving technologies. 

Solar for All

• The Community Power Coalition (CPC)’s SFA program, “Powering America Together,” will collaborate with and enhance the impact of the US Department of Energy’s National Community Solar Partnership and Community Power Accelerator program. Led by Inclusive Prosperity Capital, Inc., CPC comprises seasoned community solar experts who have contributed to the Community Power Accelerator as developers, lenders, trainers, and technical assistance providers. The program aims to support the development of low-income community solar projects, reduce carbon emissions, lower energy costs, and promote quality jobs, community wealth-building, energy resilience, and equitable workforce development. 
• To address existing challenges hindering the widespread adoption of distributed solar generation, the State of New Mexico’s Energy, Minerals and Natural Resources Department (EMNRD) and its coalition partners (Project Team) are expanding access to shared solar beyond the limitations of the state’s current community solar program as defined by statute. This initiative aims to bring online the most isolated and off-grid residents, such as those living in unelectrified homes while bolstering grid resilience through on-site solar installations. The program is tailored to meet the needs of low-income and disadvantaged communities, including both homeowners and renters, by providing direct grants and financing options for solar projects that reduce household energy expenses through annual electric bill savings. 
• The Clean Energy Fund of Texas (TxCEF), in collaboration with the Bullard Center for Environmental and Climate Justice at Texas Southern University (BCECJ), collectively known as CEFBC, is dedicated to deploying technical assistance, private capital, and grants to minority-serving institutions. Together, these organizations aim to facilitate the establishment of residential-serving community solar projects in low-income and disadvantaged communities that face significant challenges related to energy policy and grid vulnerability. These projects are anticipated to result in emissions reductions, savings on household utility bills, generation of shared revenues through community ownership, and the mobilization of private capital.
• Teaming up with lead applicant GRID Alternatives, a coalition of ten mission-driven nonprofit solar and affordable housing providers and allies has collaborated to develop the Solar Access for Nationwide Affordable Housing Program (SANAH). SANAH is meticulously crafted to maximize benefits for households and communities while advancing equity, reducing harmful pollution, and combating climate change. The program offers a multitude of advantages, including expanded access to solar and storage for income-qualified households, significant energy savings and relief from burdensome costs, as well as additional benefits like efficiency improvements and electrification.

Disclaimer

The information provided herein is for informational purposes only and is accurate as of the time of publication. Please be aware that the solar energy landscape, including technology, regulations, incentives, and market conditions, changes frequently. Therefore, it is essential to consult with qualified experts and professionals before making any decisions regarding solar energy installations or investments. This will ensure that you receive the most current and applicable advice tailored to your specific circumstances.