✅ Federal Incentives
All federal benefits apply to entities in New Mexico.
✅ State Incentives
⚡ New Solar Market Development Tax Credit (NSMDTC)
New Mexico offers a state tax credit for individuals, corporations, and agricultural enterprises that install solar energy systems on their property. The credit is 10% of the total cost of the system, including equipment, materials, and labor, up to a maximum of $6,000. (LINK)
⚡ Supplemental Solar Market Development Tax Credit
For systems installed in 2020, 2021, 2022, or 2023 that were previously denied due to the cap being reached, a supplemental credit is available. This credit provides up to 10% of the system's cost, up to $6,000, and applications must be submitted by December 31, 2025. (LINK)
⚡ Sustainable Building Tax Credit (SBTC)
This credit is available for new residential construction or commercial renovation projects that incorporate sustainable building practices, including the installation of solar energy systems. The credit amount is determined by the level of certification achieved (e.g., LEED, Energy Star), with a maximum cap of $6.50 per square foot for residential projects. (LINK)
⚡ Property Tax Exemption
New Mexico provides a property tax exemption for the added value of solar energy systems. This means that installing a solar system will not increase the assessed value of your property for tax purposes.
⚡ Sales Tax Exemption
The state offers a sales tax exemption for solar energy systems, reducing the upfront cost by eliminating the 5.125% state sales tax on the purchase of solar equipment. (LINK)
✅ Utility Incentives
⚡ Solar Renewable Energy Credits (SRECs)
Customers of El Paso Electric Company (EPE) and Public Service Company of New Mexico (PNM) can earn SRECs for each kilowatt-hour (kWh) of electricity their solar system generates. These credits can be sold to utilities, providing an additional revenue stream. (LINK)
✅ Additional Considerations for Nonprofits
Under the Inflation Reduction Act (IRA) of 2022, tax-exempt organizations such as nonprofits are now eligible to receive a direct payment equal to 30% of their solar installation cost, effectively mirroring the federal Investment Tax Credit (ITC).
Summary
New Mexico offers a combination of federal incentives, state tax credits, sales and property tax exemptions, and utility-level incentives to make solar energy a viable and beneficial investment for individuals, businesses, and nonprofits.