Santa Fe, New mexico is the highest capital city in the United States at 7,000 feet above sea level. So that means that because it is closer to the sun it must be even better for solar power generation right??? OK maybe my logic is a little off on that one but New Mexico defintely has some of the best solar resources in the country with a reported 300-350 days of sunshine per year. But all those sunny days are useless without some progressive renewable energy legislation (see Wyoming). Luckily the New Mexico solar industry has been helped by state legisators who have been working hard to make it easier for residents to take advantage of all that sunshine.
Here are some of the most noteable accomplishments:
- April 2004, Governor Bill Richardson signed executive order EO-04-019, which declared New Mexico “The Clean Energy State.” Which basically has been the driving force behind increasing residential and commercial solar developments.
- In June 2006, the Solar Market Development Income Tax Credit was passed. If you install a residential solow power system you will receive a 30% credit, with a cap at $9000.
- In March 2007, the Solar Rights Act was ammened to prohibit Home Owners Associations (HOAs) and cities from passing codes that would prohibit the installation of solar power systems.
- In 2007, the Renewable Portfolio Standard (RPS) was doubled and now requires 20% of energy produced to be generated from renewable sources by 2020. In addition, 20% of that must be solar.
PACE financing allows people to finance clean energy and energy efficiency retrofits to their homes or businesses through a slightly higher property tax over the course of 20 years. The government provides the money upfront and you pay it back over time while at the same time saving money on electricity. In many cases, the financial savings exceed the increase in annual property taxes. New Mexico has authorized municipalities and counties to create special districts for financing a variety of projects including residential solar power systems and Santa Fe is currently developing a program. Check here for updates on the program.
As of January 2007, New Mexico now allows net-metering on facilities that generate up to 80MW. If you have net excess generation (NEG) less than $50 during a monthly billing period, the excess is carried over to your next monthly bill. If NEG exceeds $50 during a monthly billing period, the utility will pay you the following month for the excess. Unfortunately unlike New Jersey in New Mexico you do not own the renewable-energy credits (RECs) associated with the generation of electricity by net-metered systems.
Personal Tax Credit
New Mexico provides a 10% personal income tax credit (up to $9,000) for residents who purchase and install certified home solar power systems. Eligible systems include grid-tied commercial PV systems, off-grid and grid-tied residential PV systems, and (active) solar hot water or hot air systems. To be eligible, the New Mexico Energy, Minerals, and Natural Resources Department must certify systems. Note that solar pool or hot tub heaters are not eligible for this tax credit. Credits may be carried forward for a maximum of ten taxable years until fully expended. More information here
If you have a LEED certified home then you should take a look at this tax credit: Sustainable Building Tax Credit (Personal)
El Paso Electric Company – Small and Medium System Renewable Energy Certificate Purchase Program
On January 1, 2010, El Paso Electric started purchasing renewable energy certificates (RECs) from its New Mexico customers who install small home solar energy systems up to 10 kilowatts (kW), and medium systems between 10 kW and 100 kW. El Paso Electric purchases the RECs to help them meet New Mexico’s renewable portfolio standard (RPS), and provide a financial incentive for homeowners to go solar.
Here are the details:
- Only systems connected to the utility’s grid and net-metered are eligible.
- REC’s will be measured by a separate REC meter and purchased by El Paso Electric on a monthly basis.
- The utility will purchase the REC’s from a your system at a rate of $0.12 per kilowatt-hour (kWh) for small systems and $0.155 for medium systems.
- Payments will be made for a period of 12 years.
- REC payments will be appear as a credit on your monthly bill.
- Any credit balance up to $30.00 will be applied to the following month’s bill.
- Once the rolling credit exceeds $30.00 a direct payment will be made to you.
This program is basically the same as the El Paso Electric Program.
Details are as follows:
- PNM will purchase RECs generated by small PV systems at a rate of $0.13/kWh for 12 years of the system’s operation.
- If the amount paid for the RECs is greater than the total of your monthly electric bill plus kWh charges, the balance of the REC payment will be carried forward as a credit for the following month’s bill if $20 or less.
- If the REC payment balance is greater than $20 after credits to your electric bill have been made, the entire REC payment balance will be paid directly to the customer.
- To be part of the program you must pay an application fee of $100, which includes the cost of installing a second meter to monitor system output.
- There is also a net-metering application fee of $50 to establish an approved interconnection with PNM.
Xcel Energy – Solar*Rewards Program
The Xcel Solar*Rewards Program offers residential customers with new home solar power systems between 0.5 kW and 100 kW AC the following REC purchase deal:
- Xcel will pay $0.20 per kilowatt-hour (kWh) for RECs.
- Small systems between 0.5 kW and 10 kW will receive this payment for the first 14 years of the system’s life, and medium systems between 10.1 kW and 100 kW will receive the payment for 10 years.
Property Tax Exemption for Solar Systems
Simply put – you won’t pay additional property taxes on the added value of your home solar power system. However, if you sell your house this exemption will not carry on to the new owner.
|Av. Monthly Electricity Bill||$100|
|System Size||4.00 kW (6,563 kWh/yr)|
|% Reduction in Electricity Bill||77|
|Cost / Watt (installed)||$7.00|
|NM Personal Tax Credit||$2,800|
|Federal Tax Incentive||$8,400|
|NET COST – 1st Year||$16,800|
|New Av. Monthly Electric Bill||$24|
|Monthly Loan Payment (25 year home equity at 7%)||$118|
|Tax Saving (assuming married filing jointly, $140K income)||$38*|
|Average Monthly Payment||$104 – Yes you are paying $4 more each month, however, a 4% increase in electricity rates next year would even the playing field.|
|CO2 Emissions Saved||7,266 lbs|
|Option 2||Participate in the PNM – Performance-Based Customer Solar PV Program|
|REC payments ($0.13/kWh)||$71/month (for 12 years)|
|Total Monthly Payment||$33|
* Tax savings will decrease as the principal is paid down. Please consult your tax preparer.
If you want to know more, simply fill out our free solar evaluation form and we will have a knowledgeable New Mexico solar professional contact you to discuss how you can benefit from going solar.