New Mexico Solar Incentives

Renewable Energy-Related Legislation and Loan programs in New Mexico

According to N.M. Stat. § 7-9G-2 enacted in 4th July 2007, all commercial projects in the field of Solar thermal electric, Geothermal electric and Photovoltaics are eligible to avail Advanced Energy Tax Credit(Corporate). All projects approved by the New Mexico Environment Department can get a 6% credit against corporate, withholding or compensating taxes. The eligible generation plant costs under this program includes development and construction expenses, site assessment and engineering, design, carbon dioxide capture, treatment, compression, system acquisition etc. And amount of $60 million was sanctioned under this program. According to SB 237 enacted in 3rd September 2009, Geothermal and Photovoltaic electric systems installed after 1st July 2009 with capacity of 1 megawatt or greater can also apply for the tax credit. But it shouldn't exceed the maximum name-plate capacity of net 700 megawatts. Carryover provision for any sort of unused credit was set at 10 years. And if the claimed amount is more than the taxpayer's liability then it must be carried over for the next 5 years. All the decisions are made by New Mexico Taxation and Revenue Department and so an applicant must file for a tax credit after getting certified by the same department. And after the eligible generation plant costs have incurred, the credit must be filed within 1 year.

According to N.M. Stat. § 7-2A-19 enacted in 7th January 2002, all commercial and industrial systems generating electricity from Solar Thermal power, wind, Biomass, anaerobic digestion, Solid Waste are eligible to avail Renewable Energy Production Tax Credit (Corporate). The eligible system must start producing electricity on or before 1st January 2018. The qualified energy generator will be liable to get a tax credit of 1 cent per kilo-watt-hour of the first 400 thousands megawatt-hours in the taxable year. Solar light or solar heat driven generators are limited to get a tax credit for the first 200 thousands megawatt-hours of electricity produced during the taxable year. The amount which can be credited under this tax credit varies greatly based upon the taxable year. A qualified taxpayer is eligible for the renewable energy production tax credit for ten consecutive years. The amount credited to the taxpayer will be deducted from his New Mexico corporate income tax liability for the taxable year. If the amount is more than his corporate income tax liability and the qualified energy generator first produced electric before 1st October 2007, then the excess amount can be carried forward for a period of 5 taxable years. And if it is after 1st October 2007, then the excess amount will be refunded to the taxpayer.

According to N.M. Stat. § 7-2A-21 enacted in 4th January 2009, all new sustainable building constructions in New Mexico or renovation of an existing building in New Mexico into a sustainable one, are eligible to avail Sustainable Building Tax Credit (Corporate). This tax credit is available in Residential, Commercial and multi-family residential sectors. The taxpayer must be the owner of the building at the time when it gets certified by the LEED green building rating system or the build green New Mexico rating system. The amount that can be credited will be calculated based on the certification level and qualified occupied square footage in the sustainable building. Taxpayer must apply for the certification from the departments of energy, minerals and natural resources. The total amount of sustainable building tax credits should not exceed in any year an average amount of $5,000,000 for commercial buildings and $1,250,000 for sustainable residential buildings. The certification level must be submitted to the taxation and revenue department to become eligible for the tax credit. After the document granting sustainable tax credit has been issued, it can be sold or transferred and the department must be notified of the same within 10 days. If the amount to be credited is more than the taxpayer liability then the excess amount can be carried over for up to next 7 years. According to SB 291 of 2009 nonprofits are also eligible to apply for the certification and transfer the tax credits or even sell them. Moreover, entities who do not have enough taxes to become eligible for the tax credit, can also sell it to other parties that can pay the taxes. This information was independently researched and published for Solar Power Authority.

According to N.M. Stat. § 7-9J-1 enacted on 4th March 2007, all alternative energy products, vehicles or components are eligible to get Alternative Energy Product Manufacturers Tax Credit. Alternative energy products or vehicles include fuel cell system, renewable energy system or any component of an alternative energy vehicle. The taxpayer must have made the purchase of manufacturing equipment after 1st July, 2006 and it must be certified by the department. Various renewable energy systems eligible for this tax credit are solar thermal energy system, photovoltaic energy system, biomass and wind energy system, battery cell energy system etc. the taxpayer must have employed at least one full time employee for at least one year prior to the day on which the tax credit was claimed. An amount of not more than 5% of the total expenses can be claimed.

According to SB 237 enacted on 3rd September 2009, all solar thermal electric plants and associated energy devices can get Advanced Energy Tax Credit (Personal). Under this program 6% tax credit can be clamed against gross recipients or withholding taxes. Photovoltaic or geothermal electric generators were also added by SB 237. The maximum tax credit amount cannot exceed an amount of $60 million. And unused tax credit can be carried forward for the next 10 years.

According to NM Stat. § 7-2-18.14 enacted on 3rd June 2006, a taxpayer purchasing and installing solar thermal system or photovoltaic system on or after 1st January 2006 can claim Solar Market Development Tax Credit. It will cover 30$ of the total purchase and installation costs. Eligible sectors are residence, business or agricultural enterprises in New Mexico. An amount up to $2 million for solar systems and $3 million for photovoltaic systems can be allowed by the department. Until the credit gets fully expanded it can be forwarded for next 10 years.

El Paso Electric in New Mexico started purchasing renewable energy certificate (REC) from all taxpayers in New Mexico who own photovoltaic systems capable of producing a maximum of 10 kilowatts. This way, homeowners can easily avail financial incentives to buy and install Photovoltaic systems. From March 2006, PNM also started purchasing RECs from New Mexico customers with a capacity of producing electricity up to 1 megawatt. Xcel Energy also purchases RECs for systems with a capacity in between 0.5 kilowatt and 10 kilowatt.

New Mexico State Government has gross receipts tax structure under which each business is taxed based on the total amount of transaction before deducting the expenses. So, revenue generated from solar systems for space heat, hot water or electricity is deducted from the gross receipts before calculating the tax.

Rebate programs

Central New Mexico Electric Cooperative - Residential Energy Efficiency Rebate Program
Central New Mexico Electric Cooperative (CNMEC) has started an incentive program under which all New Mexico residents who want to install renewable energy products in their homes can avail various rebates on the purchase made. The rebate can also be availed for replacement installments. To become eligible the applicant must belong to CNMEC's service area. An amount up to $70 can be availed through this rebate program for purchasing a renewable energy product. And extra $50 will be provided as bonus if the system has a timer or low-wattage element. And the applicant must make the claim for the rebate within 180 days of the purchase of the system.

Kit Carson Electric Cooperative - ETS System Rebate Program
Under this utility rebate program, Kit Carson Electric Cooperative has started incentive program for its New Mexico customers who are willing to install energy efficient cooling/heating equipment. Customers can also apply for various discounts available for Electric Thermal Storage (ETS) systems. The amount of rebate will be in the range of $900 to $3000 and it will greatly depend on the size of the system.

PNM - Commercial Energy Efficiency Rebate Program
This utility rebate program from PNM is applicable to only in commercial sector. Customers can increase the energy efficiency of their buildings through this incentive program. Eligible technologies under this rebate program are lighting, advanced evaporative coolers. Advanced evaporative coolers can avail incentives up to $500 and for lighting it will decided based on the lighting type.