Renewable Portfolio Standards
New Mexico’s Renewable Portfolio Standards (RPS) have come due. The goal was 30% by 2020; that is, 30% of all the state’s energy must come from renewable sources by now. Utility companies pay fees if they miss the deadline, motivating them to offer deals.
Solar carve-outs require a certain percentage of a state’s renewable energy to come from solar by a certain deadline. The solar carve-out in New Mexico is a relatively big 4% by 2020 (in other states it is 0.3%).
Strong and clear net metering laws are a bonus in New Mexico. Net metering is a system in which solar panels or other renewable energy generators are connected to the public utility, allowing customers to offset the cost of the power they draw from the utility with credits they have earned through their home energy system. If your system produces more energy than you need, the excess power is sold to the grid, which you see as a credit on your power bill.
Interconnection standards are requirements for connecting solar and other electrical generation systems to the grid. They make installation easier and usually less expensive, and net metering is more reliable too. The standards in New Mexico are among the best in the nation.
Solar Tax Credits
The tax credit is good for 10% of the purchase price and installation of your solar power system, up to $9,000. Just take the amount directly off your tax payment, like it’s cash. This makes it a more valuable credit than a mere deduction from your taxable income.
Performance-Based Incentives (PBI)
The state offers PBIs, which are incentives based on the actual power your system generates. New Mexico calls them Solar Power Performance Payments. How it works is you get paid based on the actual kilowatt-hours (kWh) or BTUs generated by your renewal-energy system. The power produced is credited as Solar Renewable Energy Credits (SRECs), the value of which fluctuates by the rule of supply and demand.
State Sales Tax Exemption
Pay no state sales tax on the purchase of an installed solar energy system.
Property Tax Exemption
The value of your home in New Mexico will not be reassessed after the addition of a solar system. You keep paying property tax based on the value before adding the system.
Federal Tax Credit
On top of these great rebates and exemptions for you living in New Mexico, you also qualify for the hefty tax credit from the Federal government. The Investment Tax Credit (ITC) is worth 26 percent of the system cost, and will be deducted from your Federal income tax. The credit goes to those who buy their system (cash or loan), not to those who lease. If you lease a system, incentives go to the third-party owner. That’s a great reason to buy, not lease!