New Mexico Solar Incentive Programs

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New Mexico, characterized by its vast landscapes and clear skies, have approximated 280 sunny days each year, placing it among the top states for sunlight exposure. This abundance of sunshine positions New Mexico as a prime location for solar energy initiatives. The state actively promotes renewable energy with various incentives and programs to support solar adoption. The state has a number of solar incentives and rebates available to help residents save money on their solar energy systems. Here are some of the incentives available to state’s home and business owners:

Federal Incentives

Federal Investment Tax Credit (ITC)

Commercial solar energy systems can take advantage of the Federal Investment Tax Credit 48E, which provides a tax credit of 30% of the total cost of the system, provided prevailing wage and apprenticeship requirements are met. 

Residential systems can no longer claim any federal solar tax credit, as the One Big Beautiful Bill eliminated it for systems installed after January 1st, 2026. 

Commercial Depreciation

Commercial asset owners can write off 100% of a project’s value in depreciation in the first year. The One Big Beautiful Bill reinstated the 100% bonus depreciation, while simultaneously eliminating the Modified Accelerated Cost Recovery System (MACRS) that previously depreciated solar energy systems over 5 years. 

The depreciable basis of a project is reduced by half of the ITC value when combined with the 30% ITC. Here’s a quick example:

• Project cost = $800,000
• 30% credit = $240,000
• Reduced depreciation basis: $800,000 – ($240,000 / 2) = $680,000

A company’s tax rate is then taken into account to calculate the exact amount they’re able to write off. 

Net Metering:

Net metering in New Mexico is a billing arrangement for solar panel owners that credits them for excess electricity they generate. When your solar panels produce more energy than your home consumes, the surplus is fed back into the grid and credited to your account, effectively spinning your meter backward. These credits can then be used to offset future electricity consumption, resulting in lower energy bills. Net metering promotes the efficient use of solar power, reduces reliance on fossil fuels, and supports the transition to clean energy. By participating in net metering, you not only save money but also contribute to a more sustainable energy future while helping maintain grid stability in New Mexico.

Renewable Energy Production Tax Credit (REPTC):

The state of New Mexico offers a Renewable Energy Production Tax Credit (REPTC) for solar installations. This incentive can reduce your state tax payments by up to $6,000 or 10% off your total solar energy expenses (whichever is lower). The tax credit applies to residential, commercial, and agricultural installations.

Sustainable Building Tax Credit:

The New Mexico state government will credit you on your taxes if you install solar as part of your sustainable building efforts on your home. In order to qualify, your home needs to be certified sustainable by the U.S. Green Building Council, and the value of the credit is determined by your certification level. You could earn as much as $6.50 per square foot for having a sustainable solar home.

Further information and programs can be found at the Programs.Dsireusa.org