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Welcome to the Ultimate Guide to Solar Panels in New Mexico

This page is a complete guide to the complicated and sometimes confusing process of installing solar panels on your New Mexico home. Since there's a lot to consider, we've separated the page into sections to help you find what you are looking for. If you find this page useful, please share it with someone who might also find it interesting!

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** What's new for 2020 **

2019 was a banner year for New Mexico solar power, because this is the year when the legislature teamed up with new Governor Michelle Lujan Grisham to pass a law requiring 100% of all energy generated in the state to come from renewable sources by 2045.

That's an amazing feat! The Land of Enchantment joins just 5 other states in setting the 100% renewable goal, and with this kind of commitment, the outlook for solar power in New Mexico is great!

Questions? Our network of solar experts are on call to assist you. Simply sign up for personalized assistance on our special solar deals page. You can get discounted on-grid pricing as low as $4,000/kW! This is paired with the New Mexico solar incentives you see below.

What you'll find on this page:

The Solar Strategy section is focused on the 3 ways of paying for solar in New Mexico, so you can decide which is best for you. We've created a tool that asks you a few questions and recommends whether you should pursue a solar lease, loan, or outright purchase. Then, we provide detailed analysis of how each works.

The Policy Information section contains all our latest research on the rules set by lawmakers and the Public Utilities Commission, which determine how easy it is to go solar in New Mexico. These policies and rules govern everything from renewable energy mandates to interconnection, and have a huge effect on the viability of solar.

Finally, the Solar Incentives section includes information about money-back rebates and grants, tax credits, and tax exemptions for going solar in New Mexico.

Click any of the boxes below to go to that section of the page, or scroll down to read the page in order.

Generate an accurate online solar estimate for your home

Your Solar Strategy in New Mexico

Figuring out the best way to go solar in New Mexico can be a little daunting. From loans and leases to power-purchase agreements, there are a lot of options out there. To help you pick the one that might be best, we've created the handy decision tool below.

We'll ask you a few simple questions about you and your home. Once you're done, we'll recommend a good option. Further down this page, we provide cost estimates and example return-on-investment calculations for all the various options:

How should you pay for solar?

Use our decision tool to find out!

How to pay for solar panels in New Mexico

The chart above shows the 25-year returns for an investment in solar whether you choose to purchase a system with cash or pay over time with a loan or lease. As you can see, New Mexico has the potential for good financial returns. The purchase option leads to the highest dollar-amount returns over time, but look a little closer. Taking a loan (the orange bars) and paying for the system over time means you'll never actually put down any of your own money.

That's what makes the solar loan option better. If you take a HELOC, you'll pay the system cost down monthly, but you still get a huge tax credit after the first year. All you need is decent credit—or the equity for a HELOC.

The option with the smallest savings is for a solar lease or PPA, which means you put $0 down on a rooftop solar system and pay monthly while you accumulate electricity bill savings over time. Leases and PPAs are an excellent option if you don't have any equity or cash to put down, and they still save you thousands.

Read more below about each of three very good options for solar in New Mexico!

How much can solar panels on roof save you?

Option 1: Paying cash for solar

An outright purchase used to be the only way to get solar, and it's still the option that provides the 'biggest' financial returns. The reason we put 'biggest' in quotes here is because it's technically true. You'll see a net return of almost $22,000 in 25 years if you pay up front. But it requires a significant up-front investment.

If you have equity in your home or good credit, you can get a solar loan or HELOC with an interest rate of 4% or less. It's like being able to start a business that is sure to succeed, just by having a roof. Read about loans below.

If you've got cash and you prefer to pay up front, you'll have to plunk down $16,380. But by the end of year 1, incentives and energy savings will erase a bunch of it. Over 25 years, your system will have produced about $22,000 in income. The reason this works is that solar panels in New Mexico make a ton of electricity without a ton of up-front investment! Solar offsets enough of your electricity bill here to save you about $1,165 in year 1, and it just goes up from there. As the electric company raises rates, you save more and more, and more...

Here’s how the numbers pencil out when you pay up front for a 5.2-kW rooftop solar system:

  • Installing a typical 5.2-kW solar system should start at about $16,380. That's cheaper than solar has ever been, but it still might seem like a big investment. Don’t worry, because after tax breaks and energy savings, your first-year costs will be considerably less than that.
  • The Feds calculate their incentive based on actual out of pocket costs, so take 26% of $16,380, for a tax credit of $4,259. Your total investment is now down to just $12,121.
  • After the tax credit we subtract your first year’s energy savings, which we estimate to be $1,165. That reduces your cost after the first year to only $10,956.
  • Your system will pay for itself in just 6 years, and over its 25-year life, you'll see a total net profit of $22,025. The internal rate of return for this investment is a stupendous 10.8%!
  • And don't forget... your home's value just increased by around $12,700, too (your expected cost after solar incentives)!
  • In addition to all that cash (and home value), you’ve created some green for the earth as well by not using electricity from fossil fuels. It's like planting 258 trees a year, every year your solar power system is humming.
Keep in mind, the numbers above are based on an average home in New Mexico. If you're ready for a custom quote for a solar panel system, our network of experts are on call to assist you. Simply sign up for personalized assistance on our special solar deals page.

Option 2: Using a loan to pay for solar

You don't need $16,000 sitting around to pay for solar. As long as you have equity in your home, you can still own solar panels and reap all the benefits. Heck, even if you do have the cash, getting a loan to pay for solar is by far the best option when it comes to percentage return on investment.

That’s because, in New Mexico, using a loan to pay for solar is like investing in a business that's sure to succeed, and also earns you a tax break. Your tax savings will be huge in the first year—more than enough to offset the small difference between the loan payments and electric bill savings. And you'll come out way ahead over 25 years.

A solar purchase like this will make sense for you if the following is true about you and your current situation:

  • You can qualify for a solar loan or home-equity line of credit (HELOC) for $16,380, with a fixed rate of 4% or lower and a 15-year repayment period. Don't be put off if you're offered a higher rate. It just means a tiny bit less of the thousands of dollars you'll make with solar.
  • You love making money without much risk.

Here’s how the numbers pencil out for a New Mexico solar purchase with a loan:

  • Installing a typical 5.2-kW solar system should start at about $16,380. That's how big your loan will need to be to cover it.
  • The electricity you'll save in the first year of operation would have cost $1,165, but your annual loan payments will be $1,504, meaning you would spend $339 on solar this year, but...
  • You'll also see a huge tax break. The Feds give you 26% of the cost of your system back as a tax credit, which in this case is $4,259. You'll be paying over time but getting all the benefits up front!
  • The electricity savings will continue for 25 years, while your loan payments will last only 15. By the end of the 25-year life of your panels, you'll come out $15,850 ahead.
  • On top of the green that will stay in your pocket, your system will mean green for the environment, too. 258 trees-worth, every year!
Keep in mind, the numbers above are based on an average home in New Mexico. If you're ready for a custom quote for a solar loan, our network of experts are on call to assist you. Simply sign up for personalized assistance on our special solar deals page.

Option 3: Buying the electricity, not the panels with a Power Purchase Agreement (PPA)

A PPA is a great way to go solar if you haven't got stacks of cash or oodles of equity in your home. With thrid-party solar like this, it's possible to get solar panels for $0-down and see big savings over 20 or 25 years!

As for PPAs in New Mexico: the electricity costs here a little below the national average, but the amount of sun you get makes a lot of energy out of solar panels! That means a PPA doesn't save you a ton right away. The average homeowner will still bank about $152 in savings this year from a PPA, so you're able to save the planet and make a little cash doing it!

Now that might not sound like a huge amount of money right now, but as the utility company raises rates, you will start to see greater annual savings. Over 25 years, our estimate shows a total savings of about $6,499. The panels will be installed and maintained by professionals, and all you have to do is brag to the Joneses down the street about your green habits!

How a PPA saves you money

Unlike a loan or cash purchase, a PPA means you don't own the panels on your roof. Instead, the solar company fronts the money for the installation, claiming all the available government incentives for themselves. Then over a term of 20 years (plus a 5-year renewal, in our estimate), they sell you the electricity produced by the panels, starting out a little cheaper than the fossil-fuel energy you had been buying from the utility company. Of course you'll still be hooked in to the grid to ensure you have power both when the sun is shining and when it's not, but the excess energy produced by the panels offsets your whole electicity bill just like it would if you own the system.

If you can get a good initial rate and a low escalator clause (the amount the PPA price increases per year), a PPA can truly be a win-win-win; for you, the solar company, and the environment. Of course, if you have the cash, equity, or credit, a solar loan is the best option. But for those without those things, a New Mexico solar PPA can be a great option.

Keep in mind, the numbers above are based on an average home in New Mexico. If you're ready for a custom quote for a solar PPA, our network of experts are on call to assist you. Simply sign up for personalized assistance on our special solar deals page.

Calculate solar panel cost and savings for your specific home

New Mexico Solar Policy Information

Ever wonder why solar seems to be everywhere in some states, but not in others? We did too.

State legislatures and public utilities commissions can enact rules to make solar power accessible for everyone. Favorable rules explain why some of the cloudiest states—New York, New Jersey, and Connecticut, are doing so well with solar, and yet some of those with the most natural solar resources—like Alabama, Mississippi, and Georgia—are doing so poorly.

Below is important information about the public policy, rules, and economic reasons that affect your ability to go solar here in New Mexico:

New Mexico's Renewable Portfolio Standard

100% by 2045

Grade: A

New Mexico's Renewable Portfolio Standard grade

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.

Learn more about Renewable Portfolio Standards

New Mexico's Solar carve-out and SRECs

4% by 2020

Grade: C

New Mexico's Solar Carve-out grade

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.

Learn more about Solar Carve-outs

New Mexico Electricity Prices


Grade: C

New Mexico's Electricity cost grade

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.

Find out why electricity prices matter

New Mexico Net Metering


Grade: B

New Mexico's Net Metering grade

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.

Learn more about net metering

New Mexico Interconnection Rules


Grade: A

New Mexico's Interconnection Standards grade

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!

Learn more about solar interconnection rules

New Mexico Solar Incentives

Next to high electricity prices and net metering, solar incentives have traditionally been the most important factor for whether home solar power makes financial sense in a state. In the past, some states with otherwise lousy policy had tremendous incentives that drove down the up-front cost of going solar so much that homeowners could save oodles of money even without net metering or a good RPS.

These days, the big incentive most people can get is the Federal Solar Tax Credit that earns you 26% of your total system costs back after just 1 year. State incentives play less of a role than in the past, but some really good ones are still out there, ready to help homeowners go solar and save money before you know it.

Let's see how New Mexico measures up:

The availability of state solar incentives for residential solar systems was sourced from the Database of State Incentives for Renewables and Efficiency, utility company websites, and the state public utility commission.

New Mexico Solar Power Rebates


Grade: F

New Mexico's Solar Rebates grade

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!

Learn more about solar rebates

New Mexico Solar Tax Credits

Sustainable residential buildings

Grade: F

New Mexico's Solar Tax Credits grade

The Sustainable Building Tax Credit applies to homes that meet or exceed LEED or energy star standards. Certainly solar energy can be a part of that, though there’s a whole bunch of other requirements needed. If you’re eligible, it can account for between $6,000 and $13,000 in personal tax credits. The credit only applies to your liability for the year in which the credit is claimed. Excess credit can be carried forward for up to 7 years.

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 26% 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.

Learn more about state solar tax credits

Property Tax Exemption


Grade: A

New Mexico's Solar Property Tax Exemptions grade

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.

Sales Tax Exemption


Grade: A

New Mexico's Solar Sales Tax Exemption grade

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.

Learn more about tax exemptions for solar

Low-income Solar Programs


Grade: F

New Mexico's Solar Sales Tax Exemption grade Learn more about low-income solar programs available in the U.S.

The consensus on New Mexico solar power rebates and incentives

The overall solar outlook is pretty sunny here in New Mexico. Part of that is because we get so much of that glorious sunshine here, so our potential for solar power production is tops in the nation. Solar policy is strong, but incentives are not quite as strong as they could be.

All of the right foundations are in place: a top-notch RPS, strong net metering, and sensible, solar-friendly tax policies. All that’s missing is a stronger up-front solar power rebate, or a more extensive statewide performance payment incentive. Lawmakers are doing well here, and it would be good to see them enact some more incentives and sustainable building codes.

If you would like some personalized assistance or a quote of your own, simply connect with our network of solar experts. They’ll help sort out all the pricing, get you access to special deals, and they’re super friendly to boot!

Find solar companies in New Mexico!

30 thoughts on “2020 New Mexico Solar Incentives, Rebates, and Tax Credits

  1. Avatar for Jeremy Jeremy says:

    Hi Cyd, That’s a really good question. Height and width maximums allowed for ground-mounted solar panels in Bernalillo County, NM residential neighborhoods very well might depend on the size of the property and location itself (An HOA vs non-HOA for example). I do know that if the total structure height above grade, measured to the top of panel, is greater than 6’, calculations and stamp from a licensed structural engineer or architect must be provided during the permit process. You might find out more info by visiting the city website address: and as a local solar company here in town we are always available if you have any further questions. Check out our website for more information and reach out if you have any further questions about your project by visiting SunState Solar at or by calling 505-225-8502

  2. Avatar for Cyd Cyd says:

    What are the height and width maximums allowed for ground-mounted solar panels in Bernalillo County, NM residential neighborhoods?

  3. Avatar for Danny Hurles Danny Hurles says:

    I’ve had solar power since 2010. I’ve always enjoyed the benefits of my meter going backwards and being paid the retail rate when that happens. PNM came out last week and removed my analog meter and put in a digital one. I’m worried that now they’ll pay me at the wholesale rate for my electricity I generate. They won’t respond to my e-mail concerns. I have four years left on my 13 year contract.

    1. Avatar for Ben Zientara Ben Zientara says:

      Ohh, that’s shady! We’ll do some research and get back to you. PNM should definitely not be in the business of revoking net metering that was already granted under contract. We’ll let you know if we find anything, and please do the same for our readers here. Thanks, Danny!

  4. Avatar for Anonymous Anonymous says:

    i would like to convert my house to solar power and buy the system is that possible with your company?

  5. Avatar for tony tony says:

    is there any rebates for building agricultural greenhouses? i heard that certain designs or shapes had some type of incentives being offered.

  6. Avatar for Bill Bright Bill Bright says:

    For all things solar in & around Gallup go to www,

  7. Avatar for Karl Livergood Karl Livergood says:

    I’m interested in solar, but I’d also like info for wind generation and if the buyback still applies. Also any info on rebates ect. I’d like to consider combination setups.

  8. Avatar for Dick Ulmer Dick Ulmer says:

    Why does NM declare the solar generation credits as income and file a 1099? It would seem that the only time this should happen is if you have a net profit (generate more than you use)? Otherwise, you need to figue in your cost model the tax owed on the generated power.

  9. Avatar for George Romero George Romero says:

    Hello, I am a single parent of two, and I am interested in going solar, that is if I can afford it. I am hoping to build a new home for my family. I know if I can I would very much like to use materials that are energy efficient and durable. I just need an idea of how much it will cost, and or if I can get some kind of assistance. So far I very much like what I have read. Thank you
    [email protected]

  10. Avatar for rives mcdow rives mcdow says:

    Hi Paul,
    You can store the energy needed to power your solar energy band during the day on one of iCel system’s power storage packs. They are lithium based, last 10 – 15 years, and are currently being installed to back up the city of Anaheim for their spinning loads during the day. They are not cheap, about $2000 per kWh, but are pretty solid.

  11. Avatar for Gail Rubin Gail Rubin says:

    Good info – you may want to update your chart to reflect the 30% federal tax credit on solar energy systems, without the cost cap, and an additional 10% New Mexico state tax credit. More details are available at the state’s Energy Conservation and Management Division’s web site:

  12. Avatar for Zev Paiss Zev Paiss says:

    Does anyone know what programs are available for utility scale PV projects in the 1MW and larger size?

    1. Avatar for Tor a.k.a. "Solar Fred" Tor a.k.a. "Solar Fred" says:


      Check out Click on your state, and see what programs are being offered. In general, large scape programs can qualify for the 30% federal ITC, which can get converted into a cash grant, as well as receive other state rebates. Often, power purchase agreement (PPAs) are also used for utility financing of large megawatt farms.

      However, utility scale projects are always solicited with RFPs (Requests for Proposals) so…if you’re asking this type of question here, I’m thinking the utility is not going to be requesting a proposal from you, but someone with a track record for solar and solar financing.

      Hope that helps.

  13. Avatar for Toby Toby says:

    Since all of the benefits associated with home alternative energy systems revolve around tax credits …how can we senior citizens participate? Our combined annuities and Social Security put us below the lowest tax bracket, therefore the tax benefit is useless. Is there any kind of direct rebate available for those of us in this situation? We are firm believers in energy independence, but cannot afford it.

  14. Avatar for Murray Murray says:

    We provided Victoria with a solar option which will work for her Non-Profit Museum while saving them ~20% a month on their electricity and did not include any investment on the part of the museum either. Any other non-profits want to learn how its done, let us know.

  15. Avatar for Natasha Natasha says:

    The New Mexico state legislature recently passed an additional 10% rebate in the form of state tax credits in order to promote the use of solar power. This incentive is available for residential installations.

    We are an installer based in Albuquerque called Green Image Solar that would love to be included in your directory, check out our site:

  16. Avatar for Victoria Baker Victoria Baker says:

    Hello- we have a museum in the NE corner of NM (Clayton), our biggest expense is the electric bill – any suggestions for a non-profit organization trying to cut costs?

  17. Avatar for Kimm Kimm says:

    Yes.I sure do think that these solar power thingts work quite persicly, compared to those wind farm thingy majigers!!

  18. Avatar for Preston White Preston White says:

    Hello, I would like to begin with a small system and build up as money allows. For example, I would begin with enough to power my refrigerator/freezer. I do not have a lump sum of money. Would I qualify for any assistance using this approach?

  19. Avatar for Klaus Pieper Klaus Pieper says:

    I heard that the $2000 on the fed. incentive program has been lifted, how does this affect the state incentive program, will it replace it?

  20. Avatar for mark mark says:

    A security company wants to install solar-powered surveillance solutions at their customers’ sites. What are the most advantageous program incentives for either the business or the surveillance company?

  21. Avatar for jonathan jonathan says:

    where can i start if i am interested in starting an installation buisness?

  22. Avatar for Dan Hahn Dan Hahn says:

    Hi Debra,

    For workshop and conference info, look into NMSEA. They are the country’s oldest solar education nonprofit. For more information, visit, email [email protected], telephone 1-888-886-6765 or in Albuquerque, 246-0400.

  23. Avatar for Debra Vigil Braidwood Debra Vigil Braidwood says:

    Hello. Toying with the idea of putting solar panels up. Would love to go to a workshop or seminar. Anything coming up here in Alb. or close?


  24. Avatar for M. Gustke M. Gustke says:

    The New Mexico Renewable Energy Alliance Forum is now available to discuss renewable energy efforts in our great state. The forum is located at

  25. Avatar for David Llorens David Llorens says:

    Hi Paul,

    Well, it will only work during day concerts :-)

    My advice is to purchase REC’s to offset your band’s usage, or go here for info on mobile solar:

    1. Avatar for Dan Hahn Dan Hahn says:

      Well Dave,

      You could actually charge large batteries with solar, then discharge them at night for a show.

      1. Avatar for David Llorens David Llorens says:

        Yah but it’s a ton of money and maintenance. Lead-acid batteries have to be ventilated and refilled, and gel-cells have to be replaced every 5 years.

        If you want to help the environment I’d just buy REC’s or play during the day. Definitely good for the band’s PR. I’d honestly just give a buzz to the mobile movie people as they are doing something extremely similar and ask what unforeseen problems they ran into during their development.

  26. Avatar for Paul Pino Paul Pino says:

    Great info. What would be the best programs for me to look in to if I want to start a solar energy band (I play New Mexico Music) and use solar power for our gigs, I’d need portable solar power? I want as much help with the cost as possible and would like to provide demos to schools.


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