All utilities in New Mexico are regulated by the Public Regulation Commission (NMPRC), except municipal utilities such as the city utilities of Los Alamos and Farmington. The NMPRC has ruled that all regulated utilities must offer net metering for solar power systems. This means that utilities must pay you the same rate for your clean energy as they charge you for their energy.

In PNM and EPE (El Paso Electric) territories, in addition to net metering, the utilities will buy Renewable Energy Credits (called RECs) for 13 cents per kilowatt-hour from interconnected solar photovoltaic systems that are under ten kilowatts. PNM (only) will also purchase RECs from large PV systems (over 10 kilowatts) for 15 cents per kilowatt-hour. The utility will pay customers for every kilowatt-hour generated for 12 years if it is a small PV system and 20 years if it is a large system.  After 12 years, there is likely to be another REC program in place. Large systems, however, do not have the same net metering benefit as small systems.

RECs are equivalent to green tags or carbon offsets, but are presently worth much more. The NMPRC requires that utilities must obtain a percentage of their electricity from clean renewable energy, including a portion from commercial solar systems. This is called a Renewable Portfolio Standard (RPS). Larger New Mexico utilities have set up incentives to encourage solar PV installations. They are not buying electricity when they purchase your RECs. Rather, they are buying the right to claim the carbon offset created when you produce electricity from the sun versus generating electricity from non-renewable sources.

What this means is that if you use either of these utilities, you receive about 22 cents for each kilowatt-hour of clean electricity that you produce, whether you send the power back into the lines or use it yourself, while you pay about nine cents per kilowatt-hour for energy you buy from the utility. You can actually receive a monthly check back from the utility! Over time, this REC payment adds up to about 30% of the total system cost if you buy a system in 2009.

Generating clean power for your business locks in your power rates and will actually reduce your costs today. Assuming a typical installed system price of $8.00 per watt, the average solar PV system today will cost about 21 cents per kilowatt-hour before incentives. Reduced by the federal tax credit of 30% <hotlink>, the net cost is 14 cents per kilowatt-hour. Thus as a business owner, you may expect to receive at least 22 cents per kilowatt-hour for clean power you produce, significantly higher than the net cost of 14 cents per kilowatt-hour.

PNM Incentives

PNM offers two programs:

-Small PV program is offered to residential and business customers with PV systems of ten kilowatts or smaller. For reference, a ten kilowatt system consists of about 45 modules and generates about 1600 kilowatt-hours per month.
-Large PV program is offered to residential and business customers with PV systems greater than 10 kilowatts but less than 1 megawatt.  This is a new program, established in early 2009.

Comparison of PNM Incentive Programs

PNM Program

Small PV Program
System size up to 10 kW

Large PV Program
System size over 10 kW and  under 1MW

Net Metering
Solar production nets against consumption at retail rates.
Any excess monthly generation over consumption is carried forward indefinitely.
Any accumulated excess generation is paid upon account closure at avoided cost, which is much less than retail rates.
Solar production nets against consumption at retail rates.
Any excess generation over consumption is paid monthly at avoided cost, which is much less than retail rates.

Solar REC program
Solar RECs are paid at $0.13 per kilowatt-hour for all production.
Solar RECs are paid at $0.15 per kilowatt-hour, up to   consumption.
No REC is paid over monthly consumption.