As a solar data analyst with over 5 years‘ experience running the numbers on New Mexico installations, I can tell you with full confidence: No other state offers more solar incentives right now. Between bustling net metering savings, nation-leading tax breaks, and exceptional long-term policy support, the Land of Enchantment provides the perfect recipe for energy independence.
In this comprehensive guide, I‘ll equip you with insider knowledge for maximizing subsidies and credits to slash your solar costs. With the right information, you can leverage New Mexico‘s sun-drenched climate and exceptional support programs to unlock life-changing savings. Let‘s dive in!
New Mexico‘s Ideal Solar Resources
Before covering financial incentives, it‘s important to note New Mexico offers among the best natural solar resources in the U.S. With over 300 days of sun annually, the state averages 6.5 peak sunlight hours daily. This allows solar arrays to soak up the intense high-desert rays and convert abundent photons into emissions-free energy year-round.
In fact, a 2021 study by the National Renewable Energy Laboratory (NREL) ranked New Mexico 3rd nationally for rooftop solar potential. With 7% solar efficiency improvements over the average state, New Mexican solar panels consistently overperform.
Combine world-class sun exposure with mounting governmental support programs, and you have a solar sweet spot. Now let‘s unpack how you can save.
Unlock 30% Instant Savings with the Federal Solar Tax Credit
Far and away the most valuable solar subsidy across New Mexico comes from the 26% federal Investment Tax Credit (ITC). This program allows homeowners to deduct 26% of your solar installation costs directly from your income tax bill.
| System Size | 26% ITC Savings |
|---|---|
| 4 kW | $3,118 |
| 6 kW | $4,280 |
| 8 kW | $5,964 |
*Estimated savings assume 2023 system pricing averages $3.10/W before incentives.
With no maximum limit on qualified expenses, the ITC essentially provides an instant 30% discount on all solar-related equipment, labor, permitting fees, and more. And the savings stack on top of additional incentives.
While the federal credit does start stepping down in 2034, claiming your full 30% discount ahead of the phase-out window locks-in exceptional savings for decades to come.
Layer on New Mexico‘s 10% State Tax Credit
Unique to just a handful of states, New Mexicans investing in solar also gain access to a 10% personal income tax credit covering up to $6,000 in project costs.
So on a $16,000 6 kW solar installation, you save another $1,600 off your state tax bill.
Combined with the 30% federal ITC, New Mexico homeowners see nearly 50% of their solar purchase subsidized by taxpayer dollars. It‘s an outrageous amount of free money left on the table each year more locals don‘t take advantage of.
Net Metering: Save Big Over the Long Run
While upfront incentives provide instant gratification, arguably the biggest solar perk comes through net metering electricity bill savings over time.
New Mexico requires all utility companies to provide 1:1 credits for excess solar electricity your panels feed into the grid. So on sunny spring days when your solar system overproduces for your household needs, your meter spins backwards, bankrolling credits to tap on cloudier days.
This allows solar owners to offset nighttime electrical pulls for literally decades while paying nothing for excess daytime solar generation. You can‘t beat a better deal than $0 per kWh of clean energy.
When comparing electric costs, always factor long-run net metering savings into solar payback forecasts. The stability against utility rate hikes alone warrants strong consideration.
Exceptional Renewable Standards Support Continued Growth
While upfront incentives help offset the initial solar investment, New Mexico also offers exceptional long-term backing through its state Renewable Portfolio Standard (RPS).
The Land of Enchantment currently requires 50% renewable energy incorporation by 2030. This includes a 80% carbon-free mandate by 2040.
However, New Mexico goes further than any other state with a stretch goal for 100% zero-carbon electricity from renewable sources like solar by 2045.
Such trailblazing ambitions cement government support for solar expansion over the next 20+ years. While 194 countries worldwide have committed to net zero emissions, New Mexico stands poised to potentially achieve it first.
Some may bristle at the cost impacts of such aggressive timelines. However, numerous studies have found a transition to high renewable penetration can occur without substantially raising customer rates. In fact, citizens often benefit directly from local energy generation.
Either way, New Mexico‘s exceptional RPS signals a robust solar future. Jump in now before your neighbors compete for local solar market share.
Financing Options to Afford Your Solar Investment
Of course, even with generous incentives, the $10,000+ price tag of a full solar array gives many homeowners sticker shock. And yes – solar still costs money upfront.
Thankfully, numerous financing options exist to help distribute costs over time. Evaluating loans and on-bill financing programs allow many homeowners to immediately access solar savings while slowly paying off equipment.
Some popular solar financing options in New Mexico include:
- Home equity loans or lines of credit
- Cash-out mortgage refinancing
- Solar loans from local credit unions
- On-bill financing through utility companies
- Borrowing against your 401(k) or other assets
I always recommend speaking with multiple lenders to find the optimal solar loan for your financial situation. Whether you leverage your home equity or other avenues, affordable financing paired with considerable long-term net metering savings make paying for solar manageable for most homeowners.
Additional Solar Incentives to Note
I‘ve covered the heavy hitters, but veterans know every little bit counts when it comes to subsidy stacking for big solar savings. Here are some other New Mexico solar perks to remember:
- Property Tax Exemption – NM exempts the added home value from solar installations from increased assessments
- SRECs – NM has a renewable energy credit (SREC) market, although payout rates languish around only $2.50/MWh
- Sales Tax Exemption – Solar is exempt from NM state sales tax as an "installed service"
Now the big question potential solar shoppers have: should you buy or lease?
Solar Loans vs Leasing in New Mexico: The Verdict
While solar leases allow homeowners to access clean energy with no money down, the forfeiture of valuable tax credits reduces potential savings greatly. Remember, almost half of New Mexico solar installation costs get subsidized through various incentives.
However, consumers must consider total out-of-pocket costs against system ownership. Solar leases tend to charge escalating monthly payments making it hard to forecast long-term costs accurately. Always model total 25-year expenses when comparing solar loans vs buying.
For most credit-qualified homeowners able to utilize state and federal tax incentives, direct solar ownership utilizing financing like a home equity loan maximizes savings potential. But innovation and options provide avenues to savings either route you choose.
At the end of the day, I commend all New Mexicans taking personal action toward self-reliance and carbon footprint reduction regardless of path taken. Our exceptional solar resources coupled with outstanding policy support pave the road toward energy independence. Let me equip you with the knowledge to take advantage.
In Closing: Now Is the Time for New Mexico Solar
I hope this guide has proven useful equipping you to leverage New Mexico‘s first-rate solar savings programs fully. With exceptional natural irradiation, rapidly advancing renewable energy technology, and nation-leading government incentives, the financial prospects for investing in solar have never looked brighter.
Please don‘t hesitate to reach out with any questions about maximizing subsidies or navigating the transition to solar power in the Land of Enchantment. I‘m always glad to help neighbors harness our state‘s renewable bounty.
About the Author
Anthony Guillermo – Solar Financial Analyst
- 5 years modeling solar savings data in New Mexico
- Excited to help homeowners across NM access exceptional solar benefits
