Over 7,700 homeowners in New Mexico have used EnergySage to receive & compare solar panel installation quotes!
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Solar installation costs do not include the 30% federal investment tax credit or local incentives.
Plentiful sunshine and great solar incentives make the Land of Enchantment one of the best places in the U.S. for homeowners to go solar.
The sunny state of New Mexico lives up to its nickname, the Land of Enchantment. New Mexico’s legislation has been making a great effort to keep this southwestern state’s natural beauty intact through renewable energy sources. With plenty of sun and great incentives such as a strong net metering program and generous tax credits and exemptions, going solar in New Mexico has never been more rewarding.
In the state of New Mexico, the average cost of solar panel installation ranges from $13,940 to $18,860. On a cost per watt ($/W) basis, a solar panel installation in New Mexico ranges in price from $2.79 to $3.77. See how New Mexico compares to solar panel costs across the U.S.
How long does it take to earn back your initial investment in solar panels? A solar payback period is the amount of time it takes for property owners who install solar panels to recover their initial investment through electricity savings. In New Mexico, the average solar payback period is 10.22 years.
Regardless of the exact cost of installation, there are many affordable financing options for solar panel systems. Cash purchases are one common method to pay for solar and often lead to the most long-term value for your money. If an upfront purchase isn’t right for you, solar loans and solar lease/PPAs are available to help finance a solar energy system.
For property owners, you now can customize your solar panels, inverters, racking systems, and batteries, as well as the general aesthetic of the installation. This customizability has made it important for solar consumers to understand these various factors. For example, the best solar panels available may have premium efficiencies and warranties, but will typically be more costly. However, depending on the size of the installation, you’ll need to determine whether high-efficiency solar panels that can produce more electricity are worthwhile. Also, your appetite for risk can help determine which solar warranties best fit your needs. These are just a few of the many factors to consider when selecting solar panel equipment.
Aside from the power output of the solar equipment you choose to install, the amount of energy you generate with solar panels in New Mexico is directly related to the amount of sunlight that hits your panels. Good news for energy conscious home owners in New Mexico, the Land of Enchantment ranks number one in peak sun hours for the United States! This means your solar panels will likely produce more energy than a system of the same size installed elsewhere, such as the Northeast.
There are additional factors that determine how much solar electricity you can produce. These include shading and panel angle, which are used to calculate your total production estimate. a prediction of how much energy your solar installation will produce over time. This evaluation offers a clear estimate of how much energy your solar installation will produce. You can see how much solar panels can save you based on factors like geographic location and shading by using the EnergySage Solar Calculator.
Solar incentives in New Mexico can help you reduce the overall price of going solar. Learn more about why solar panels are such a great investment in New Mexico.
Learn about solar incentives in NMThe federal investment tax credit, now referred to as the Residential Clean Energy Credit for residential systems, has been one of the most reliable and impactful incentives for solar across the U.S. This solar incentive allows you to deduct 30 percent of the total system cost from your federal taxes. For example, a solar energy system installation that costs $15,000 out of pocket will qualify for a tax deduction of $4,500. For residential systems, this advantageous incentive lasts until the end of 2032 at which point it steps down to 26 percent. The federal ITC drops to 22 percent in 2034 and is eliminated for residential solar installations in 2035. Commercial systems are eligible at least through 2024, but may not be eligible for the full 30 percent depending on certain labor and domestic manufacturing requirements; they also may be eligible for specific ITC adders.
Besides the federal ITC, New Mexico has additional incentives for going solar that are dependent on your area and utility company. Of Note are a strong net metering program and tax credits and exemptions such as the sustainable building tax credit and the El Paso electric renewable energy certificate purchase program. To learn more about New Mexico’s best financial incentives for solar, check out our complete overview of the state’s best solar incentives.
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Learn more about EnergySageWith wide-ranging deserts and plenty of natural sunlight, the Land of Enchantment has successfully developed a mature solar industry for its residents. As of 2018, New Mexico has installed almost 800 megawatts of solar energy capacity, placing it 16th on SEIA’s national ranking in 2018. While its geography and solid solar resource has played an important role in the success of solar in New Mexico, the key driver of solar growth has arguably been the state’s effective policies over the years.
In 1977 and 1983, New Mexico policymakers implemented Solar Easements & Rights Laws. The purpose of these early solar policies was to establish that the right to use solar energy is a property right. Although this policy doesn’t provide any financial incentives, it effectively legitimized solar technology and the solar industry in New Mexico.
In 2004, New Mexico introduced its Renewable Portfolio Standard (RPS) program, which has been their most influential driver of solar growth to date. In fact, state energy requirements have been probably the most significant policy for clean energy development across the nation. For New Mexico, after strengthening their RPS in 2007 and 2014, the state ultimately mandated that investor-owned utilities supply 20 percent of retail electricity sales with renewable energy by 2020. Additionally, the state’s RPS specified in 2007 that utilities must generate 4 percent from solar energy by the same target date. New Mexico’s solar carve-out stands out as one of the strongest solar-specific goals in the nation.
The state’s RPS further benefits residents because utilities offer financial incentives to go solar in order to comply with the renewable targets. In New Mexico, solar performance payments have been offered through a Renewable Energy Credits (RECs) system by all the major utilities such as El Paso Electric, PNM, and Xcel Energy. El Paso Electric’s REC program is particularly robust, as it pays residents who generate solar energy $0.02 per kilowatt/hour (kWh) for the first eight years for systems up to 10 kW.
Much of this success, however, is predicated on New Mexico’s adoption of net metering in 2008. Throughout the nation, net metering programs have been crucial for the solar energy industry by allowing residents to store surplus net energy in the electric grid and receive compensation for it on their energy bill. In New Mexico, Xcel Energy offers the top utility net metering program in the state. New Mexico’s excess solar compensation is about average nationally, as utilities in the state offer the avoided cost rate instead of the retail rate.
Additionally, New Mexico provides further regulatory incentives to encourage solar development. For example in 2007, the state was able to enact the Sustainable Building Tax Credit as well as the Solar Energy Gross Receipts Tax Deduction to cut costs immediately when purchasing solar. Additionally, New Mexico has offered Property Assessed Clean Energy (PACE) financing since 2009, which effectively allows property owners to borrow money to pay for energy improvements. Finally, the state made solar more accessible to residents by legislating the Property Tax Exemption Act in 2010 to protect residents against increased property taxes that come with installing residential solar systems.
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