New Mexico solar rebates and tax credits calculator

Solar incentive

Federal ITC 26% (tax credit)

State tax credit: Yes ($6,000)

Net metering (by utility)

Calculate for your homes location

There can be solar tax credits and incentives available at the federal, state and local levels. The calculator above will show you the value of all incentives your home is eligible for.

Summary of New Mexico solar incentives 2020

Prospects for home solar power in New Mexico are brighter than ever, since the state legislature teamed up with Governor Michelle Lujan Grisham to pass a law requiring 100% of all energy generated in the state to come from renewable sources by 2045.

That's an amazing feat! The Land of Enchantment joins just 5 other states in setting the 100% renewable goal. While that target is a few decades away, the standard helps commit the state’s utility companies to source more energy from your home solar panels with stronger solar incentives.

On this page, you can:

  1. Learn what solar incentives are available to New Mexico homeowners

  2. See what New Mexico solar incentives you qualify for based on your utility company and city

  3. Find out how much these incentives and/or New Mexico solar tax credits will reduce your cost to go solar and add batteries

Federal solar investment tax credit

The federal solar investment tax credit will have the biggest impact on the cost you will face to go solar in New Mexico

This perk is commonly known as the ITC, short for “Investment Tax Credit”. If you install your photovoltaic system in 2020, the federal tax credit is 26% of the cost of your solar panel system. This is 26% off the entire cost of the system including equipment, labor and permitting.

Example: If your solar energy system costs $20,000, your federal solar tax credit would be $20,000 x 26% = $5,200.

The federal tax credit falls to 22% in 2021. Unless new legislation is introduced in Washington D.C., this program will be gone in 2022.

Net energy metering in New Mexico

With net metering in some states, you get full retail rate credit for the amount of electricity you send back into the grid with your solar panels.

New Mexico has lots of sun and strong goals for installing solar, but that doesn't mean much unless there are also strong rules in place to protect solar owners from the shadier side of selling electricity to the utility company. Luckily, New Mexico does a pretty good job with that!

The state's net metering laws are some of the best in the country. The rules make it so you can get 1-to1 retail electricity rate credits for your extra solar electricity you send back into the grid that you aren’t able to use onsite. The credits are carried forward indefinitely. You also get to retain control of any renewable energy credits your solar system produces. That has a benefit, as you can sell them to PNM as part of their solar performance program outlined below.

New Mexico solar rebates

While New Mexico does not have a dedicated state rebate for solar panel installation, some manufacturers like LG offer their own solar rebates. These programs are usually time sensitive. For example, LG offers a $600 solar rebate on their equipment, which your installer can help you redeem over the next year.

PNM solar payments

An average sized 6kW solar system will produce about 10,500 kilowatt-hours (kWh) over a year in New Mexico. As part of a PNM program to purchase your renewable energy credits, they’ll pay you $0.0025 per kwh for a term of 8 years. 

Unfortunately, that amounts to a mere $300 over the course of 8 years, excluding your $150 application fee. As a result of your participation, PNM gets to say they are meeting their renewable energy goals with your RECs. 

We’d like to see the state do a little better here relating to stronger solar performance payments, but hey at least it’s a little something. 

New Mexico state tax credit

In 2020, New Mexico lawmakers passed a statewide solar tax credit, called the “New Solar Market Development Income Tax Credit”. It covers 10% of your installation costs, up to a maximum of $6,000. 

Since most average sized 6kW systems cost about $1,8000, you can expect a credit of about $1,800. The credit carries forward for 5 years if you have less tax due annually than this amount.

Property tax exemption

The legislature has also built tax exemptions into the laws here, saving you money both up-front and every year thereafter for the life of your new solar power system.

New Mexico’s property tax exemption will keep you saving money every year. When you install a solar power system, your home goes up in value by about twenty times your annual electricity bill savings. That adds up to a lot of money in most cases! Normally you’d pay taxes on that increase in value, but thanks to this exemption, your property taxes stay the same.

Cost of solar panels in your part of New Mexico after all applicable solar incentives

Showing data for:

Prices based on a 7.9kW system, after 26% federal tax credit

Solar prices near you

Cost range of local prices

$13,618-$16,644

Payback period

5-6.1 years

Net profit (savings less system cost)

$53,432-$65,306

Average size system installed in NM in 2020

7.9kW

Solar panel cost calculator

Best 10 solar companies in New Mexico

24 solar companies in New Mexico provide pricing on SolarReviews. Here are the best rated companies near you.

Solar guides for your New Mexico city

For more information about going solar near where you live, check out the following resources:

Find local city information

 

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