Solar Panel Laws in New Mexico

Within New Mexico, there are more and more solar power prospects. The original idea of solar-powered houses is becoming brighter with each passing day.

The state is putting legislation in place, and they’ve teamed up with the Governor to ensure the law is passed. Read on as we dive into the solar panel laws in New Mexico.

The potential law will require 100% of all the energy generated by 2045 to be fully renewable. This is a huge leap for a great cause, and even the Land of Enchantment joins other states to introduce the same initiative.

While the primary goal comes many decades later, state utility companies have already started introducing better solar panels incentives.

Key Takeaways

• New Mexico is implementing legislation to require 100% renewable energy by 2045, aligning with other states in this initiative.
• The federal solar investment tax credit (ITC) offers a 30% tax credit for solar panel installations between 2022 and 2032.
• New Mexico has favorable net energy metering laws, offering solar panel owners a one-to-one credit for excess electricity sent to the grid, and the state also provides various incentives, including tax credits and property tax exemptions, for adopting solar power.

The Federal Solar Investment Tax Credit

If you’re considering switching to solar panels, the all-new federal solar investment tax credit will greatly impact the cost incurred. This perk is better known as the ITC. ITC is simply the shortened version of the Investment Tax Credit.

If, by chance, you install the photovoltaic system between 2022 and 2032, you can expect the federal tax credit to be 30% of the initial cost of your solar system. In essence, this 30% is calculated based on the total price for the whole package. This means that the cost includes the labor, equipment, and permits.

The following serves as an illustration of this concept:

If the final cost of your solar panel system is $20,000, then you should expect your federal tax to be 30% x $20,000 = $6,000.

Net Energy Metering In New Mexico

Since net metering is being widely used in several states, solar panel users can expect to get what is known as full retail rate credit. Credit is given based on the electricity generated and sent back to the grid from a household. People often don’t use all the generated electricity sent to the grid.

Since New Mexico is very sunny, it makes the perfect setting for solar panel systems. However, all of the sun in the world doesn’t matter if specific rules and regulations are not in place.

These rules generally protect solar panel owners from the darker side of selling electricity. Luckily, New Mexico citizens are in great hands, all thanks to the laws in place to deal with this.

Unlike many other states, the net metering laws within this one are pretty good and even considered the best in the country. The rules were constructed to ensure that homeowners would get a one-to-one deal on the credits. So, if ever you find yourself in a position where you’re generating more electricity, it can be sent to the grid for a small reward.

Most, if not all, users will also be able to have complete control over credits that are carried forward and retained. This is a huge benefit since it can be sold to the Public Service Company of New Mexico (PNM).

New Mexico Solar Rebates

While the state has not determined or even dedicated a rebate for installing solar panels in New Mexico, dedicated manufacturers now offer customers their rebated deals.

However, most of these are based on a strict time-sensitive basis. LG, in particular, offers its users up to $600 on their equipment.

As such, equipment installers can easily help redeem this during the upcoming year.

PNM Solar Payments

On average, some systems stand at 6kW. These systems will easily produce up to 10500-kW/h in a single year. However, as part of the specially designed PNM program, they can easily purchase the renewable credits that customers generate. As such, persons will be paid for eight years at a rate of $0.0025.

While it might not seem like a fortune, only a mere $300 was generated during that period. However, PNM now states that they’re covering their renewable goals.

Most agree that the state can do better with the performance payments. However, it’s still arguable that something is better than nothing.

New Mexico State Tax Credit

In 2020, the state of New Mexico passed a law that is referred to as the New Solar Market Development Income Tax Credit. The law is set to cover at least 10% of the installation costs. However, this only applies to the max of $6000.

It should be noted that since some systems only cost about $18,000, you’ll be able to receive about $1,800 in credit, and it can be carried forward.

However, there is a limit on the amount of time this is done. For the most part, the carryforward period is up to 5 years and applies if your taxes are less than this annually.

Property Tax Exemption

Due to the laws in place, several exemptions are also generated. This allows you to save money for the rest of your life with your new system in place. Homeowners can expect to earn yearly money when installing the solar panel system.

The house’s overall value also significantly increases by at least 20 times that of your regular electric savings. For most, they’re able to cash in on a small fortune with these incentives and laws. While taxes are paid on the increase, this exemption ensures that yours stay the same.

Case Study: Harnessing Solar Power in Santa Fe, New Mexico

Background

At Solar Panels Network USA, we strive to provide our clients with optimal solutions for their energy needs. Recently, we worked with a homeowner in Santa Fe, New Mexico, to install a solar panel system that leveraged the state’s favorable solar policies and incentives.

Project Overview

The homeowner aimed to reduce their energy bills, take advantage of available tax credits, and contribute to environmental sustainability. Given New Mexico’s sunny climate and robust solar incentives, we designed a plan that would maximize both financial and environmental benefits.

Implementation

We started with a comprehensive site assessment to determine the best placement for the solar panels, ensuring maximum sun exposure and energy production.

Calculating and Applying Tax Credits

The total installation cost for the 6 kW solar panel system was $20,000. By utilizing the Federal Solar Investment Tax Credit (ITC), the homeowner received a 30% credit, reducing the cost by $6,000. Additionally, New Mexico’s state tax credit provided a 10% credit on the installation costs, capped at $6,000. This resulted in an additional $2,000 credit, further lowering the effective cost of the installation.

Net Energy Metering

New Mexico’s net metering laws allowed the homeowner to receive full retail rate credit for excess electricity sent to the grid. This one-to-one credit system ensured that any surplus energy produced during peak sunlight hours could be credited against future energy consumption, reducing the homeowner’s electricity bills.

State Tax Credit Utilization

The New Mexico Solar Market Development Income Tax Credit enabled the homeowner to apply a 10% credit on the installation costs. Given the $20,000 cost of the system, the homeowner received a $2,000 state tax credit, which could be carried forward for up to five years if their annual taxes were less than this amount.

Property Tax Exemption

The installation of the solar panels also qualified for a property tax exemption. This meant that the increased home value resulting from the solar installation did not lead to higher property taxes. The homeowner benefited from the increased property value without the burden of additional taxes.

Results

The solar panel installation was completed efficiently, with the panels now fully operational and generating clean, renewable energy. The homeowner’s electricity bills were significantly reduced, and they began accumulating credits through net metering. The combined federal and state tax incentives provided substantial financial relief, making the investment highly cost-effective.

Financial Savings Breakdown

• Initial system cost: $20,000
• Federal Tax Credit (30%): $6,000
• State Tax Credit (10%): $2,000
• Net metering credits: ongoing savings and future bill reductions

The homeowner’s overall financial savings, coupled with the environmental benefits of using renewable energy, demonstrated the significant advantages of investing in solar power in New Mexico.

Summary

This case study illustrates how residents in Santa Fe, New Mexico, can effectively harness the benefits of solar power through state and federal incentives. By leveraging the Federal Solar Investment Tax Credit, state tax credits, and net metering laws, homeowners can achieve substantial financial savings while contributing to a cleaner environment. At Solar Panels Network USA, we are committed to helping our clients navigate these opportunities, ensuring that their solar investments are both financially and environmentally rewarding.

Expert Insights From Our Solar Panel Installers About Solar Panel Laws in New Mexico

New Mexico’s ambitious goal of achieving 100% renewable energy by 2045, coupled with the federal solar investment tax credit, makes it an excellent time for homeowners to invest in solar panels. The 30% federal tax credit significantly reduces the initial cost of installation, making solar energy more accessible.

Senior Solar Installer

Net metering laws in New Mexico are among the best in the country. Homeowners can benefit from one-to-one credit for excess electricity sent to the grid, ensuring that their solar investment provides ongoing financial returns.

Lead Solar Technician

The state tax credit and property tax exemptions in New Mexico offer additional financial incentives for solar panel installations. These incentives not only lower the upfront cost but also increase the value of the property without increasing property taxes.

Solar Installation Expert

Experience Solar Excellence with Us!

Trust in Solar Panels Network USA, where our seasoned experts deliver top-quality solar solutions for homes and businesses nationwide. With a legacy of countless successful installations and a commitment to sustainable energy, we’re your reliable partner in the solar journey. Ready for a brighter, eco-friendly future? Call us now at (855) 427-0058 and harness the power of the sun!

Conclusion

Solar panel installation in the state of New Mexico is looking more and more bright with each new day. The state is perfect for this initiative since it is generally very sunny.

With these incentives’ inclusion, the state will reach its no-fossil fuel goals in no time!

Map image by Wikimedia Commons User: TUBS / CC-BY-SA-3.0