Solar Tax Credits (2006)
Critical Facts
- Amount of credit: This program provides a 30% personal income tax credit for installation of solar systems on a home or business when combined with the federal credits (see next bullet).
- The formula for these credits: The credit is worth 30% of system cost, minus any applicable federal credits, up to $9000. Note that commercial systems that are eligible for the federal solar tax credit (which has no cap on the amount), will not receive a state credit (until, say, the federal credits expire). The federal credits for residential systems are currently capped at $2000. This means that residential systems that cost less than $6666 (i.e. for which 30% of the cost is less than $2000) will not receive a state credit, but that systems that cost more than $6666 will. This formula, and the $9000 cap for the state credits and the $2000 cap for residential federal credits, collectively imply that residential systems that cost up to $36,666 will receive a full 30% in combined tax incentives. Below this amount, the state credits will be less than $9000. Above this amount, the total, combined credits will max out, but will add up to a total tax incentive of $11,000.
- Years available: The state solar tax credits are available for systems installed between January 1, 2006, and December 31, 2015.
- Carry-Over: Claimants may carry-over their credits up to 10 years if their liability is insufficient to absorb the credit in the first year.
- Total State Budget for the Solar Tax Credits: There is a total budget of $5 million/yr for the credits: $3 million/yr for PV, $2 million/yr for thermal systems.
- System Certification: Systems must be certified in advance by the Energy, Minerals, and Natural Resources Dept as meeting certain quality standards. The requirements are quite rigorous: Consult them before you install a system.
- Other Incentives: This, combined with PNM’s PV RECs program, net-metering, solar sales tax exemption, and solar rights, completes a fairly completely suite of incentives for solar energy installations in New Mexico.
- Note: These solar credits and New Mexico's Green Building Tax Credits cannot be used together if a solar system that takes advantage of the credits is also used to help obtain the green building certification of the building.
- State Contact: Brian Johnson; 505-476-3313.
- Guide to Going Solar: See our "How to Go Solar Guide" for a step-by-step approach to going solar, and other information about clean energy incentives in New Mexico on our Clean Energy Incentives page.
- New Mexico Solar Community: Visit the New Mexico Solar Energy Association.
