Updated Jan 10, 2023
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New Mexico is a state with plenty of sunshine. However, without some renewable energy credits, loan programs, or tax incentives offered in New Mexico, it can be hard to afford a solar panel system. Luckily New Mexico has some great options to help homeowners and business owners save money. If you are looking for all of the best New Mexico solar incentives, our guide will help you learn why solar installation makes sense. We’ve also included information on rebates and tax incentives to help you save money on your solar energy system.
The state of New Mexico solar tax credit combined with the federal tax credit is an impressive combination that can save thousands of dollars. This program won’t last forever; it’s important to take advantage of it when you can.
New Mexico currently ranks 21st in the nation according to the SEIA regarding solar friendliness. The ranking is pretty impressive and shows that areas like Albuquerque, Santa Fe, and others have people that are taking advantage of these programs. The reason is that the time it takes to recuperate the money invested in the system is better than in other states.
People typically invest in solar arrays for their homes because they want to save money on electricity long-term. These photovoltaic systems and solar panels tend to have high installation costs but have strong long-term benefits.
In addition, the ability to no longer rely on the grid nearly as much and be able to produce green energy is something that New Mexico residents find to be quite desirable. Adding solar panels to your home will help increase your home’s total value, making it more desirable from an investment standpoint.
New Mexico solar costs are average, ranging from around $17,000 to more than $30,000. You’ll have to determine how much solar energy your home needs to accurately determine the total system cost.
The solar panels cost money to purchase and install, but overall upkeep and maintenance on the system are not all that bad. Luckily with the current incentives in New Mexico, there is quite a bit of money to be saved.
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The average savings from the federal tax savings programs for New Mexico homeowners will be around $4,500 to 5,000 dollars. When you add in the state government credits, typically ranging from $1,500 to $3,000, the total savings should be north of $5,000 and sometimes even close to $10,000.
In addition, when your system is up and running, you can qualify for energy efficiency and net metering programs that can help save you some money and even start to make some of it back.
The Federal Solar Investment Tax Credit (ITC) is the best solar incentive in New Mexico. However, the fact that New Mexico also has a solid statewide tax credit will help make solar panel installation and energy efficiency so much more affordable for your home or business. Some loan programs can make it much easier for commercial businesses to choose solar energy.
|Federal Solar Tax Credit (ITC)||New Mexico residents can take advantage of the Federal Solar Tax Credit and get a discount of up to 30% applied to their tax returns. If you purchase $20,000 worth of solar panels, you can get a credit of $6,000 on your next tax return. Remember, this does require you to come out of pocket first.||December 31st, 2032|
|Net Metering||Net metering allows homeowners that create excess energy to use it as a credit on their next electric bill. Net metering in New Mexico is a strong program allowing people the retail rates of electricity when they bank excess.||None|
|New Mexico State Tax Incentive||Homeowners in New Mexico can save up to 10% on their state taxes when investing in a solar power system for their home.||2032|
|Property Tax Exemption||The state of New Mexico does not increase property taxes for those with a solar panel installation. This can save thousands in property taxes through the years.||None|
The Federal Solar Investment Tax credit is available in all 50 states, New Mexico included. This program will help offer savings on your next federal tax return. The Federal Solar Investment Tax Credit is the best option for those looking to save a large chunk on solar installation and something that all New Mexico homeowners should be taking advantage of.
Consumers and businesses who install solar on their properties are eligible for a tax rebate equal to 30% of the total cost of their solar system. This program is set to extend through at least the end of 2032.
When taking advantage of this program in the Land of Enchantment, make sure that you follow all guidelines and determine system requirements before installation; this is the only way to ensure that you can take full advantage of this income tax credit.
New Mexico has a strong solar energy tax credit at the state level. Homeowners can qualify for a 10% tax credit applied to their state income taxes owed. If all of this credit is not necessary the year you install the solar system, you can use the credit at a later date.
With the cost of a system in New Mexico being close to $20,000, you can expect a credit of up to $2,000 that will stick with you for about five years. The credit will expire at the end of 2027, and there are limits to this program.
The program will stop if the total amount saved reaches $8 million. The original goal was to create this program to ensure that the state reaches some of its solar goals, and the New Mexico Solar Energy Tax Credit is helping to get that done.
Most products purchased in the state of New Mexico require a sales tax payment of 5.125%. However, an exemption for green energy helps ensure you will not pay any taxes on a solar panel system as a homeowner or business owner.
This can save close to $1,000 on most solar panel installations.
The New Mexico Solar Property Tax Exemption helps make the solar panel system much more affordable. When a system is installed, your home’s value often increases, and property taxes can increase with them.
Luckily in New Mexico, you won’t have to worry about this; your property taxes will not increase with installing a solar panel array.
Net metering is the process of banking some of the excess energy you create and having the utility company give it back to you at a reduced rate when you need it. The great thing about New Mexico net metering is that it is a requirement that companies must offer.
Therefore, XCel Energy and El Paso Electric will always offer the net metering program and help you save money on a rainy day; you may struggle to have the energy to run your air conditioner or your washing machine. The only thing New Mexico homeowners need to be aware of here is that the price per kilowatt hour you get from your power system will vary depending on the company you choose.
The PNM Performance-Based Solar Program was created in 2006 and continued through to 2019. This program is often discussed as something that could come back for New Mexico residents. The Renewable Energy Credit (REC) was for homeowners that participated, and they could essentially sell back their credit and then apply it to the electric bill on a monthly basis. The homes with PV systems originally enrolled in this program get access to the credit for 8 years from the installation date.
The Sustainable Building Tax Credit is a program that is put forward to help homeowners that are trying to create more sustainable homes. This solar market development tax credit will be in place until 2032, and there are different values and eligibility requirements that can be found on the New Mexico Taxation & Revenue Department website.
If you have no need for this state tax credit, you can carry it forward for a total of seven years.
When it comes to commercial properties in New Mexico, most of the incentives for transitioning to solar power are the same as they are for residential.
Non-profit organizations will benefit from homeowners and business owners being able to transfer their tax credits to them. However, this is not typically done. For the most part, non-profits will have a good selection of programs to choose from to help them save money on their solar project and encourage some lower electric bills in the near future.
The United States Department of Agriculture offers a REAP grant or Rural Energy for America program. Agricultural producers are very important pieces of our economy; however, they also require a lot of power to stay up and running. With the REAP Grant, agricultural producers can save quite a bit of money on loans for their solar system.
In addition to the money savings, there are also financing options that may otherwise not be available through other providers. These financing options allow agricultural producers to get their loans in place at a much faster pace and start moving towards more green energy solutions. Contact the USDA at the start of your solar project and ensure you get the maximum benefit throughout this process.
For a federal corporate income tax return, there is a 30% credit against the cost of any system that was placed onto a commercial structure. This credit is available for any non-tax-exempt businesses and will run through at least 2032.
The net metering program in New Mexico is strong for commercial and residential property owners. With net metering, you can work with local utility companies to have a rebate on electricity when needed but don’t produce enough solar power to run it.
With New Mexico commercial net metering, you must shop for the best deal to find which provider offers the most significant discount. These discounts will vary but can save you hundreds if not thousands of dollars.
Although it may seem as though it has nothing to do with solar power, it does. This fund was amended to include green energy projects for local governments. Local governments can get loans ranging from 0% to 4%, and they will have terms that last for nearly 20 years. This is a great resource to consider if you have a solar project but need funding.
The Sustainable Building Tax Credit is similar to the residential version. The idea here is to create more green energy and encourage businesses and properties to work towards that. There are individual savings amounts that each update to the building can get credit for. This will come off the state taxes and can carry forward for up to 7 years. This program will be in place in 2032.
The best New Mexico solar incentives are the federal programs combined with the state tax credit. With New Mexico working towards these impressive programs for financing, incentives, and rebates, the decision to go solar is a much easier one. If you are interested in solar incentives in your state, ensure you stay up to date with local and federal and state programs. They are constantly changing, and you will want to take advantage of any program that comes your way.
Solar in New Mexico is worth it as it will help you save money and help the environment. Clean energy may cost money upfront, but the unique savings programs in New Mexico will make it a good option for budget-conscious people.
Solar panels in New Mexico are about $18,000 for an average size home. With the incentives offered in the state, many homeowners can get the totals down to the $12,000 range. The size of the home and the amount of energy you use will impact the cost of your solar array.
Solar panels are not offered for free in New Mexico. New Mexico does have some of the better clean energy savings programs across the nation, so the savings rates are higher, but you will still have to pay some out of pocket.
Currently, the solar rebates in New Mexico include federal rebates as well as a state tax rebate. In addition, there are loan programs, a hold on property taxes, and no sales tax on a solar array installed in your home or office.
There are only about 300,000 homes with solar panels in New Mexico; this is a significant presence and seems only to be getting stronger. However, homeowners and business owners need to take advantage of these programs before they expire.
Solar panels will not increase property taxes in New Mexico because a program is in place to help keep these costs down. Installing a solar power system will increase the value of your home but keep your property taxes the same.
The current Federal ITC programs allow a total possible rebate of 30% of the total cost of your solar system installation. This program will be in place through 2032, as the Inflation Reduction Act mandates.
At House Method, transparency and trust are our most important values for the reader. That’s why we took the time to create an objective rating system and score each solar energy company/service according to our methodology.
Our research team dug deep into the fine print of contracts, combed through more than one hundred customer reviews, and thoroughly investigated each solar energy company’s services, costs, and products. We’ve done the homework for you by researching nearly all the solar energy companies on the market so you can have the information you need to make the best choice for your home.
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