New Mexico

The New Mexico Solar Market Development Tax Credit (SMDTC) offers financial support to residents who install solar energy systems on their property. This state tax credit allows you to claim 10% of your solar system’s equipment, materials, and labor costs, up to a maximum of $6,000. The credit directly reduces your state income tax liability, potentially resulting in significant savings on your solar investment.

To qualify, you must own the property where the system is installed (or hold a leasehold on tribal lands), have the system properly inspected by the appropriate building code authority, and submit required documentation including property ownership proof, inspection reports, itemized invoices, and system design specifications. The program also offers supplemental tax credits for systems installed between 2020-2023 that didn’t receive credits due to funding limitations. Applications typically take 3-4 weeks to process, after which you’ll receive an electronic certificate of eligibility to use when filing your taxes.

New Mexico’s Solar Property Tax Exemption offers homeowners a significant financial benefit by valuing solar energy systems at $0 for property tax purposes. This means when you install solar panels on your residential property, the value of your solar system won’t increase your property tax bill, helping you save money while transitioning to clean energy.

To qualify for this exemption, your solar installation must be on residential property and include photovoltaic panels or other solar-electric equipment. The exemption applies to systems installed on or after January 1, 2026. While the exemption primarily benefits homeowners, it’s also available to rental property owners, potentially saving approximately $1,200 annually on property taxes for a typical system. There’s no expiration date for this incentive, making it a long-term benefit for New Mexico residents investing in solar energy.

Net Metering in New Mexico allows solar homeowners to receive credit for excess electricity their system sends back to the grid. This program varies slightly depending on your utility provider, but the core benefit remains the same: you can offset your electricity consumption with the solar energy you produce. When your solar panels generate more electricity than you’re using, that excess power flows back to the grid, and you receive credits on your bill.

In New Mexico, the three main utility companies handle net metering differently:

• Public Service Company of New Mexico (PNM) offers full 1:1 net metering, meaning you get credited at the full retail rate for excess electricity. These credits carry over month to month with no annual expiration.

• El Paso Electric provides monthly net metering where excess generation is credited at their Purchased Power Rate (averaging around 11 cents per kWh in recent years, though rates fluctuate monthly).

• Xcel Energy also offers monthly net metering, but excess credits are valued at their FPPCAC rate, typically only 1-3 cents per kWh. Xcel will issue a check if your accumulated credits reach $50 or more at the end of a billing period.

To qualify for net metering in New Mexico, you simply need to own a grid-connected solar system and be a customer of one of these utilities. There are no specific deadlines to enroll, but you’ll need to complete an interconnection agreement with your utility before your system can be connected to the grid. For the most accurate and current information about net metering rates and policies, it’s advisable to contact your specific utility provider directly.