New Mexico Solar Incentives (2023)

Considering going solar in New Mexico? You’re in luck! Did you know that New Mexico has some of the most attractive solar incentives in the country? With over 300 sunny days per year, it’s no surprise that the Land of Enchantment is an ideal location for solar panels.

This guide will provide an in-depth look at the various programs available to homeowners and business owners who want to go solar in New Mexico. We’ll explain each program’s details and eligibility requirements, as well as provide tips for maximizing your savings.

By taking advantage of the solar incentives, tax credits, and rebates available in New Mexico, you can reduce the cost of your solar installation and help create a more sustainable future for your community. So, let’s dive into the world of solar incentives in New Mexico and see how you can benefit from them.

Federal Solar Tax Credit

The Federal Solar Tax Credit, also known as the Residential Clean Energy Credit, is a significant incentive for New Mexico homeowners to save money on their solar panel system. This credit covers 30% of the total cost of a residential solar power installation and can offset the upfront cost of installation, making it more financially feasible.*

For instance, if a homeowner in New Mexico installs a solar power system that costs $25,000 in 2023, they would be eligible for a federal tax credit of up to $7,500 (30% of $25,000). This credit would be applied to their federal income taxes, reducing the amount they owe by $7,500.

The best part is, you can use the Federal Solar Tax Credit in addition to other state and local incentives, which means even more savings for you. If you’re interested, it’s a good idea to talk to a qualified tax professional to ensure that you’re eligible and that you claim the credit correctly on your taxes.

New Mexico state tax credit

In addition to the Federal Solar Tax Credit, homeowners in New Mexico can take advantage of the state solar tax credit, also known as the Solar Market Development Income Tax Credit. This credit provides a maximum of $6,000—or up to 10% of the total cost—of a solar panel system.(1)

To qualify for the New Mexico state solar tax credit, the solar panel system must be owned by the homeowner and installed by a licensed contractor. The installation should be done on a residential property used as the primary residence. The homeowner needs to file a complete application with the Energy, Minerals, and Natural Resources Department (EMNRD) within 12 months of installation. The tax credit is available on a first-come, first-served basis until the yearly allocation cap of $12,000,000 is reached.

Any excess amount of the new Solar Market Development Income Tax Credit that surpasses a taxpayer’s tax liability in the year of claiming the credit will be refunded to the taxpayer. This means you could receive a refund for the portion of the credit that exceeds your tax liability. You can combine the New Mexico state solar tax credit with the Federal Solar Tax Credit to save even more on your solar panel system. It is recommended to seek advice from a licensed tax professional to ensure eligibility and proper credit claiming.

Net metering

New Mexico homeowners can benefit from net metering by receiving credits for excess energy generated by their solar panel system.**

Net metering is a program mandated by the New Mexico Public Regulations Committee that provides credits for any excess energy a solar panel system generates and feeds back into the grid.(2) In other words, if a homeowner’s solar power system generates more electricity than they use, they can receive a credit on their electric bill for the excess energy.

In New Mexico, each of the three investor-owned utilities offer their own net metering program. To ensure that your solar panel system is eligible for net metering and you’re maximizing the program’s benefits, it’s essential to work with a licensed contractor.

Overall, net metering is an excellent option for New Mexico homeowners who want to reduce their energy bills and take advantage of their solar panel system’s full potential.

Property tax exemption for solar panels in New Mexico

If you’re a New Mexico homeowner considering a solar panel system installation, you’ll be happy to know that the state offers a property tax exemption for solar panels. This means you can enjoy the benefits of your solar panel system without having to pay additional property taxes. (3)

To be eligible for the property tax exemption, the solar panel system must be installed on a residential property used as your primary residence. Additionally, the system must be installed by a licensed contractor and meet all necessary safety and building code requirements.

It’s important to note that the property tax exemption applies only to the added value of the solar panel system and not the entire property. To claim the exemption, you’ll need to submit an application to your county assessor’s office.

Sales tax exemption for solar panels

New Mexico offers a gross receipts tax exemption for residential solar panel systems, making it more affordable for homeowners to invest in renewable energy. The gross receipts tax is a tax on the total amount of money that a business collects from its customers and applies to most goods and services in New Mexico.

However, solar panel systems are exempt from this tax, which can result in significant savings for homeowners who want to go solar.(4)

It’s important to note that the gross receipts tax exemption only applies to the equipment and materials used to install the system and not to any labor or installation costs. To take advantage of the exemption, it’s essential to work with a licensed contractor who can guide you through the installation process and ensure that you’re eligible.

New Mexico solar easement

New Mexico’s Solar Rights Act provides homeowners with the ability to create solar easements, which are legal agreements that protect a homeowner’s right to receive sunlight on their solar panels.(5)

This means that if a neighbor’s property obstructs your solar access, you can create a solar easement that legally prevents them from building anything that would block your solar panels. By protecting your solar access, you can generate the maximum amount of solar energy possible, allowing you to enjoy the full benefits of your solar panel system.

By working with a reputable solar installer such as ADT Solar, you can rest assured that your solar panel system is installed correctly and that you’re getting the most out New Mexico’s solar incentives.