In 2004, Governor Bill Richardson declared New Mexico the "Clean Energy State." That same year the state enacted its renewable portfolio standard (RPS), which requires all investor-owned utilities to harvest 20% of their energy from renewable resources by 2020 (rural electric cooperatives 10% by 2020). Furthermore, solar energy must provide 20% of those RPS energy requirements. All of those percentages work out to some good incentives for solar power in the so-called Land of Enchantment.
Personal Tax Credit
New Mexico offers a 10% tax credit (up to $9,000) for the purchase and installation of residential, commercial and industrial solar energy systems. That includes solar water heaters, solar space heating and cooling, as well as photovoltaics (PV). There is a maximum 10-year carryover and the credit, which began in 2009, expires at the end of 2016. See the New Mexico Energy, Minerals and Natural Resources Department (EMNRD) for more information and all applicable forms.
PACE Financing
A Local Option law has been passed by the New Mexico legislature that allows cities and counties to develop their own renewable financing programs based on property tax assessments. Called Property Assessed Clean Energy (PACE) programs, they let homeowners borrow money to pay for energy improvements and repay it by way of a special assessment on their property taxes over a period of years. Typically, the loan stays with the property (not the individual) in the case of home sale. Not every local government in New Mexico will offer these programs and programs may vary from city to city. Contact your municipality of residence to learn if and how it offers PACE financing. More information on the state legislation may be found at EMNRD.
Production Incentives
Three utilities in New Mexico offer production incentives for solar electricity produced by small home systems. The El Paso Electric Company offers 12 cents per kilowatt-hour (kWh) of solar energy produced over 12 years for PV systems sized at 12 kW and less.
PNM offers a similar production incentive with slightly higher rates. In an effort to comply with state RPS requirements, the utility will pay 13 cents per kWh for renewable energy credits produced by PV systems under a 12-year contract.
Xcel Energy's Solar*Rewards Program is the most lucrative, at least for new systems. The multi-state utility will pay 20 cents/kWh-AC for new systems between 0.5 kW and 100 kW in size. They'll also pay 10 cents/kWh for existing systems. Contracts span 14 years.
Property Tax Incentive
Beginning January 1, 2010, any added home value resulting from the installation of solar water heat, solar space heat or PV systems is exempt from property tax assessment. The term specifically does not include windows, dark-colored water tanks and non-vented trombe walls.
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