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Last updated: May 2026
Avg. sun hours/day
5.9 hrs
Avg. electricity rate
$0.14/kWh
Active incentives
3
10% of solar PV cost, capped at $6,000 per residence. Non-refundable; carries forward up to 5 years. Annual statewide cap of $12 million issued first-come-first-served.
Reauthorised in 2020 under HB 29 and renewed in subsequent legislation, the New Mexico Solar Market Development Tax Credit provides a 10% credit on residential solar PV system cost up to $6,000. Filed on PIT-RC schedule with the annual New Mexico personal income tax return. The credit is allocated against the statewide $12M annual cap on a first-come-first-served basis; certifications issued by the New Mexico Energy, Minerals and Natural Resources Department (EMNRD). Carries forward up to 5 years if unused. Battery storage installed alongside qualifying solar PV is generally eligible. Stacks with all federal-level expired credits as a state-only program.
Exemption from property tax assessment of the value added by qualifying solar PV systems on residential property.
Under New Mexico Statute 7-36-21.3, residential solar energy systems are excluded from the increase in property tax assessment that would otherwise result from installation. The exemption applies for the life of the system. Filing is via the local County Assessor; some counties apply automatically upon discovery of a permit, others require homeowner application.
1:1 retail-rate net metering for systems ≤ 80 kW under PNM, El Paso Electric, and Xcel Energy NM territories. Surplus credits roll forward indefinitely on customer's bill.
New Mexico Public Regulation Commission rules require investor-owned utilities to offer 1:1 retail-rate net metering for residential and small-commercial solar systems up to 80 kW. PNM, El Paso Electric, and Xcel Energy New Mexico participate. Surplus generation rolls forward as kWh credits with no annual reset. Cooperatives have varied participation; some offer 1:1, others lower compensation rates. New Mexico's strong solar irradiance (5.9 PSH) makes the state one of the better post-ITC residential solar markets — combined with the 10% state credit and net metering, payback in 2026 typically lands at 9–11 years.
Expired for systems placed in service after December 31, 2025.
Federal Section 25D expired 2026-01-01. New Mexico's 10% state Solar Market Development Tax Credit is in addition to the federal credit; with federal expiration, the state credit becomes the only tax-credit incentive available. Strong solar resource (5.9 PSH) keeps payback economics workable. See /guides/solar-after-itc-expired.
Our calculator uses New Mexico's actual sun hours (5.9 hrs/day) and electricity rates.
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