Congratulations! You've found the ultimate guide to going solar in New Mexico

A Renewables Portfolio Standard (“RPS”) requires utilities in the state to eventually source at least a certain percentage of their electricity from clean, renewable sources like solar panels. New Mexico has one of the best RPS laws in the country, aiming for 100% renewable energy by 2045. The state joins a few others at the top of our rankings, all of which are aiming for the 100% standard, but each with their own way of getting there.

The New Mexico RPS is critical to strong renewable energy policy. Utility companies aren't really all that gung-ho about you producing your own power. After all, it costs them money when you use less of their electricity. They also don’t naturally want to give you big payments for energy you're feeding back into the grid. The main reason the utilities are aiding your transition to lower utility bills and offering you incentives to put solar on your roof is because the state forces them to. If the utilities don't hit their RPS numbers, they have to pay large fees back to the state.

Investor-owned utilities must also generate 4% of retail electric sales from solar power by the 2020 target date. That’s one of the strongest solar carve-outs we’ve seen! In addition to the solar carve-out, 0.6% of total energy must be generated from small-scale distributed generation power; i.e., from sources like your residential solar power system instead from giant earth-killing power plants.

New Mexico pays an average of 13 cents/kWh of electricity. That’s just a tad below the national average of 13.6 cents/kWh. Here at Solar Power Rocks, we actually think the national average is too cheap, so we think energy in New Mexico is currently too cheap as well. We know you hate high electric bills, but hear us out.

Right now most of our electricity still comes from burning millions of tons of fossil fuels. The cost of those fossil fuels in dollars and cents may be low (for now), but the environmental costs are astronomically high. Switching to solar power now saves you money (and helps save the planet). When scarcity and environmental costs drive up the monetary costs of fossil-fuel based energy, the early switch to solar power is going to be saving you stacks on stacks of money. You can thank us later.

New Mexico have lots of sun and strong goals for installing solar, but that doesn't mean much unless there are also strong rules in place to protect solar owners from the shadier side of selling electricity to the utility company. Luckily, New Mexico does a pretty good job with that!

The state's net metering laws are some of the best in the country, but for one thing (which we'll get to in a moment). The rules provide for generators (that's you if you have solar panels) to retain control of any renewable energy credits they earn from their systems, and also to be credited for their excess generation—a credit which is carried over indefinitely.

The one place where the state's rules miss the mark is safe harbor rules for customer-generators. Without those rules, utility companies can impose fees and additional charges on net metering customers, which can make solar much less viable for smaller systems.

New Mexico's interconnection rules are nearly ideal for homeowners who want to go solar. The state guarantees net metering, doesn't require additional homeowners' insurance or expensive external disconnect switches, and offers a simplified process for small systems. All that adds up to a really easy, inexpensive process to get your panels connected to the grid and making you money!

There are currently no up-front rebates available on the installation of a solar power system in New Mexico. Especially with three of the big utilities offering ongoing performance payments, the legislature is missing a golden opportunity to promote clean, efficient, and reliable solar power. Even a small solar power rebate can go a long way when New Mexicans know those Solar Renewable Energy Credit (SREC) payments will kick in once the system is up and running!

Sadly, 2016 is the year the New Mexico state government ended its great personal solar tax credit on the purchase and installation of a residential solar power system.

Still, you'll benefit from the 30% Federal Solar Tax Credit. There's no cap on the federal tax credit and fortunately for New Mexico, having no state rebate to deduct means a larger tax credit coming your way.

Three New Mexico utility companies currently offer performance payments, called Solar Renewable Energy Credits (SRECs), for the production of solar energy. All three programs are structured identically, but the numbers vary a little bit from utility to utility:

First, El Paso Electric Company’s REC Purchase Program will pay its net-metered customers $0.02/kilowatt-hour (kWh) for the first eight years of systems up to 10kW. These payments are built into the net-metering program, and do not replace it. REC payments will start as a credit on your next month’s bill. Every time the rolling credit goes above $30, the electric company will cut you a check.

Second, PNM’s Performance-Based Solar PV Program offers an eight year purchase contract at $0.0025/kWh for systems up to 10 kW. Again, REC payments will be applied to your next bill until the credit exceeds $20, at which point the utility cuts you a check for the full amount. Sadly, this only applies if you have a current contract with PNM, as systems under 100 kW (way bigger than home size) are no longer able to subscribe.

Finally Xcel Energy’s Solar Rewards Program used to offer twelve year contracts at $0.08/kWh for PV systems up to 10 kW in size, but the program is fully subscribed. 10 kW is pretty large for a home solar system, but if you have a good deal of land or a really large roof space, you can still get payments of $0.05/kWh.

Please note that all three of these are tiered programs. That means that as certain goals are met (i.e. as the utilities convince enough people to switch to solar power to keep on target with their RPS mandates), the rates currently being offered will be lowered step by step. That means less money for you -- so the sooner you sign up, the better!

And, as always, connect with local installers to get expert guidance on how best to go solar in your area.

The legislature has also built tax exemptions into the laws here, saving you money both up-front and every year thereafter for the life of your new solar power system.

New Mexico’s property tax exemption will keep you saving money every year. When you install a solar power system, your home goes up in value by about twenty times your annual electricity bill savings. That adds up to a lot of money in most cases! Normally you’d pay taxes on that increase in value, but thanks to this exemption, your property taxes stay the same.

In addition to the property tax incentive, you save up-front on solar in New Mexico because the state exempts solar equipment from its gross receipts tax. Businesses that sell solar equipment should be building that tax discount into the price they pass on to you – this saves you money on day one. For more detailed information on this exemption, check out this handy guidance document.