Solar Incentives in New Mexico

New Mexico homeowners have access to several solar incentives that can significantly reduce installation costs. All New Mexico residents can claim the 30% federal Investment Tax Credit (ITC), which alone can save thousands of dollars. Depending on your location in New Mexico, you may also qualify for state tax credits, utility rebates, Solar Renewable Energy Credits (SRECs), property tax exemptions, and sales tax exemptions. The specific incentives available to you depend on your utility company, municipality, and the current status of New Mexico's solar programs. Contact a local New Mexico solar installer for a personalized incentive analysis.

Net metering availability in New Mexico depends on your specific utility company and the state's current policies. Net metering allows you to receive credits on your electricity bill when your solar panels produce more energy than your home consumes. In states and utilities that offer net metering, these credits can significantly improve your solar savings and shorten your payback period. New Mexico's net metering policies may include specifics about credit rates, system size limits, and annual true-up periods. Check with your New Mexico utility company or a local solar installer for the current net metering terms available to you.

Whether New Mexico has a Solar Renewable Energy Credit (SREC) market depends on the state's Renewable Portfolio Standard. In states with SREC programs, your solar panels generate one SREC for every megawatt-hour (MWh) of electricity produced, and you can sell these credits to utilities for additional income. SREC prices vary significantly by state, ranging from $10 to over $300. If New Mexico does not have an SREC market, other incentives like net metering, state tax credits, and rebates may be available. A qualified New Mexico solar installer can explain which production-based incentives apply to your situation.

Many states, including potentially New Mexico, offer property tax exemptions for residential solar installations. A property tax exemption means that the added home value from your solar panels is excluded from your property tax assessment, so your taxes do not increase even though your home is worth more. Solar panels typically add $15,000-$25,000 or more to a home's value, so a property tax exemption can save hundreds of dollars annually. Check with your New Mexico county assessor's office or a local solar installer to confirm whether a property tax exemption applies in your specific New Mexico municipality.

New Mexico homeowners claim the 30% federal solar Investment Tax Credit (ITC) by filing IRS Form 5695 with their annual federal tax return. The process is straightforward: after your solar system is installed and operational, you include the total system cost on Form 5695, calculate the 30% credit, and transfer the credit amount to your Form 1040. You need to owe at least as much in federal taxes as the credit amount; if your tax liability is less than the credit, you can carry the remaining credit forward to future tax years. Your New Mexico solar installer should provide documentation of all qualifying costs. Consider consulting a tax professional to ensure you maximize your federal and any New Mexico-specific tax benefits.