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New Mexico is a state with plenty of sunshine. However, without some of the 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 available to help both homeowners and business owners save money. If you are looking for all of the best New Mexico solar incentives, our guide will provide the following:
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 they have very strong long-term benefits.
In addition, the ability to no longer rely on the grid nearly as much and be able to produce your 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 about average, ranging from around $17,000 to more than $30,000. The average home will have to determine how much solar thermal energy it 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 is 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. There are also some loan programs that can make it much easier for commercial businesses to choose solar as their energy source.
|Federal Solar Tax Credit (ITC)||New Mexico residents can take advantage of the Federal Solar Tax Credit and get a discount of up to 26% applied to their tax returns. If you purchase $20,000 worth of solar panels, you can get a credit for more than $5,000 on your next tax return. Remember, this does require you to come out of pocket first.||December 31st, 2023|
|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 that have 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.
There is one problem with this tax credit, and that is that it is not going to last forever. The ITC is set to expire at the end of 2023. In addition, the rates will go down from 26% to 22% in 2023, making it the perfect time for a taxpayer to invest in a solar panel system for their New Mexico home.
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 that will be 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.
If the total amount saved reaches $8 million dollar, the program will stop. 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, there is an exemption for green energy that 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 to make the cost of a solar panel system much more affordable long term. Many times when a system is installed, the value of your home goes up, and the property taxes will increase with them.
Luckily in the state of New Mexico, you won’t have to worry about this; your property taxes will not increase with the installation of 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 that new Mexico homeowners need to be aware of here is that the price per kilowatt hour that you get from your power system will vary depending on the company you choose to go with.
The PNM Performance-Based Solar Program was created in 2006 and continued through to 2019. This is a program that is often talked about 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 into the building. The Federal Solar Tax Credit is the best way for New Mexico state businesses and property owners to save the most amount of money. Unfortunately, in the year 2023, you will notice the rate of savings go down to 10%, and in 2024, it will expire.
There is always a chance that this program will be extended, but it’s best to take advantage of it as it is still active.
The net metering program in New Mexico is strong for both commercial and residential property owners. With net metering, you can work with local utility companies to have a rebate on electricity when you need it 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 the Drinking Water State Revolving Loan Fund 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 government. Local government 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 a similar program 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 be something that 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, make sure you stay up to date with local programs as well as federal and state. 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. The clear energy may cost money upfront, but the impressive savings programs in New Mexico will make it a good option for those that are budget conscious.
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 26% rebate on the total cost of the solar system. With the current state savings at 10%, you can save close to $5,000 on your federal return and around $2,000 on the state tax return.
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 all of each solar energy company’s services, costs, and products. We’ve done the homework for you by researching nearly all of the solar energy companies on the market so you can have the information you need to make the best choice for your home.
We developed a formula to objectively determine the best solar energy companies and give each a score out of 100 based on the following criteria:
Plan Options (30): Do they provide a variety of plan options? We looked at the number of plans each solar energy company offered and the flexibility of adjusting the plan.
Services offered (20): How many services are offered in each plan? We looked at whether the company manufactures its own solar panels, whether it contracts out installation, and what additional products each company offers.
Trust (10): What do customers say after their solar panels are installed? Does this company offer a guarantee? We considered how satisfied customers are post-service if the company does what it says it will, BBB accreditation, and service guarantees.
Prices (10): How reasonable are the costs of the plan or service in comparison to the industry average? We compared the costs of each company to competitors that offer the same solar energy services.
Unique perks (10): Does the company offer discounts or special services such as financial incentives, rebates, or a useful mobile app? We looked for extras each company offers that set them apart from the competition.
Customer Service (10): How is the customer experience when contacting the company? We considered the speed of response, weekend/holiday availability, and ease of communication through phone calls, email, and online chat functions.
Nationwide availability (10): How many states does the company offer its services? Companies that operate nationally and in all zip codes are favored over those with limited availability.
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