Top 5 Incentives for Going Solar in New Mexico

The Land of Enchantment is setting an example in the country with a goal of using 100% renewable energy for electricity by 2045. 2045, of course, is just over 20 years away, but we’re off to a great start. Still, the state is incentivizing residential and commercial consumers to go solar early to help this goal become a reality. 

In this blog post, we’ll share the various incentives, both federal and state, and what that might look like for you so that you can be more informed if you’re thinking about jumping on the solar bandwagon!

State Incentives for Going Solar in New Mexico

New Mexicans are in an excellent position to go solar. In fact, the EIA shared that New Mexico is the third in the nation for solar energy potential since we get so much sun here! And with some of the best incentives in the country, there is really no reason not to. Tax credits can easily offset a good chunk of the investment, and other programs put power credits in your hands to use when/if your solar panels aren’t producing enough energy.

Sustainable Building Tax Credit

Building a green home in New Mexico? You can get some serious cash from the New Mexico Sustainable Building Tax Credit. There are over $7 million in tax credits available across various types of building projects in New Mexico. For afforadble residential builds, you can get up to $3,000 back on materials costs, and for non-affordable builds, get $1,500 back. Read more about it here.

Net Metering in New Mexico

When you have solar panels installed on your home in New Mexico, you can take advantage of the Net Metering Policy, which means you get credits for extra electricity that your panels produce (above what you need.) The credits don’t come as a monetary check, but you can use the credits when you don’t create enough power to cover your usage. The policy ensures you always have enough power. If your town has Xcel Energy as your utility provider, they have particularly good net metering policies in place.

Property Tax Exemption

Putting solar panels on your home increases the home value, which is great for resale. But homeowners might be weary of the tax burden that increased home values have. Thankfully, the state provides a tax exemption on the added value of your home. This means that if adding solar panels adds $20,000 to the value of your $300,000 home, raising the value to $320,000, you’ll still just pay property tax on $300,000 value.

New Mexico Solar Market Development Tax Credit

This tax credit, put in place in 2020, provides 10% back as a tax credit, for the cost of a solar install, up to $6,000. There is an allotment of $12 million each year for this tax credit, and it is applied on a first-come, first-served basis. So, you may want to consider doing a solar project earlier in the year to ensure you can take advantage of this credit.

Federal Incentives for Going Solar in New Mexico

While New Mexico has some great incentives in place to encourage its residents and businesses to go solar, don’t forget about the granddaddy of all solar credits—the Federal Solar Tax Credit. Read about it below!

Federal Solar Tax Credit

Great news for individuals looking to take advantage of the Federal Solar Tax Credit! The ITC Extension, a part of the recent Inflation Reduction Act, included prolonged, increased tax credits to those installing residential solar panels. 

Get 30% of your solar installation cost back as a tax credit the year you have the install completed. So, for example, if your solar install costs $16,000, you will get $4,800 back on your federal taxes. This tax credit applies through 2032 (which is new with the recent ITC extension.) Then, the credit percentage will decrease, and eventually go away altogether in the following years. Learn more about it here.

Going Solar Never Looked Better in NM

With a big push both statewide and nationally to use more renewable energy, switching to solar power includes lots of measures to help make it more possible. If you feel overwhelmed by tracking down all these programs—don’t worry! Part of our job here at Always Sunny Solar is to help you. Also, hiring a good CPA or tax accountant will be key in making sure you take advantage of all the incentives that exist for you!

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