Solar System Incentives. How does $0 out of pocket sound?
Most people are aware that solar will ultimately save them money, but some also believe that solar has a large upfront cost, which isn’t true! With local financing programs available, you can now switch to solar for $0 upfront and start saving immediately. Whether you choose to pay cash or finance your system, there are several incentives that make having solar panels installed on your home a great investment; both economically and environmentally!
New Mexico’s solar incentives are some of the best in America.
Lots of sunshine and great solar incentives make New Mexico a great place to have solar panels installed. Whether you choose to purchase or finance your solar electric system, you are making a sound decision to simply pay less for something you're already purchasing (electricity). Solar energy systems not only save you money, but they can also increase the value of your home. Thanks to the many solar incentives and rebates in New Mexico, it's a great place for solar; there's a reason our state flag has a sun (zia) on it!
Here are just a few New Mexico solar rebates and incentives:
Net metering in New Mexico.
When you put solar panels on your roof, you want to make sure you get credit for the power your system generates. Luckily, New Mexico has a net metering policy that credits you for the extra electricity your system produces, and allows you to use those credits when your system doesn’t generate enough power (think of it like roll-over minutes). PNM, El Paso Electric Company, and several other local co-op utilities offer net metering programs in New Mexico.
New Mexico Solar Market Development Tax Credit
The New Mexico Solar Market Development Tax Credit or "New Mexico Solar Tax Credit" was passed by the 2020 New Mexico Legislature and signed by New Mexico Governor Michelle Lujan Grisham.
- This bill provides a 10% tax credit with a savings value up to $6,000* for a solar energy systems.
- The bill states that a business or homeowner who purchases and installs a solar energy system on or after March 1, 2020 are eligible for this non-refundable tax credit.
- First come first served - the solar tax credit has an annual allotment of $8M. This will go quickly, so don't wait to get your solar project started.
Property & sales tax exemption for solar
Even though solar increases the value of your home and allows for greater marketability, that extra value is exempt from property taxes in New Mexico. A property tax exemption makes it more economically feasible for a taxpayer to install a solar system on a residential or commercial property – you get the financial benefits of generating your own power, without having to worry about a higher tax bill!
New Mexico also offers state sales tax exemptions for solar panel installation. A sales tax exemption means that homeowners and businesses would not have to pay any additional state sales tax on their solar panel system.
AVERAGE SAVINGS VALUE OF PROPERTY TAX EXEMPTION: Variable
AVERAGE SAVINGS VALUE OF SALES TAX EXEMPTION: $1,750
Federal Solar Tax Credit (ITC)
Perhaps one of the greatest and most-known solar incentives comes from the Federal government.
All 50 states are eligible for a Federal Investment Tax Credit (ITC)* to reduce the cost of the system. This is calculated as 26% of the value of your system (parts, labor, permitting, etc.) If you choose to purchase or finance your system, this tax credit goes to you directly through your federal tax return. Your solar specialist will calculate this for you and can consult with your accountant to fill out Form 5695 to claim your credit.
AVERAGE SAVINGS VALUE OF INVESTMENT TAX CREDIT: $8,000
GREAT NEWS! FEDERAL SOLAR TAX CREDIT EXTENDED FOR TWO MORE YEARS! LEARN MORE HERE.
* Consult with tax professional to determine if credit can be fully utilized based on your taxable liability.
Solar System Costs
As you can see, the cost for solar panel installation in New Mexico has many incentives and variables that affect the final investment cost. To get an accurate cost of going solar in New Mexico, it's best to speak with one of our local solar consultants who will help cover all the details.