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New Mexico Solar Rebates and Incentives

Solar Rebate and Incentive Programs

  • New Mexico Rebates and Incentives Summary


    New Mexico isn’t just home for aliens and secret government research into the extraterrestrial (allegedly), or home to the world’s first nuclear tests. It’s also the home of abundant solar resources, in fact, with the overwhelming majority of New Mexico getting more than 6 kilowatt hours per square meter of direct sunlight a day, the state is eclipsed only by Arizona in terms of sunniest states. This makes the state rife with opportunity for installing both photovoltaics (PVs) and solar thermal energy projects. The state noted that it has “the potential to provide 1,000 times more energy than Public Service Company of New Mexico’s current demand.” In addition, new transmission in the “state would allow the export of large quantities of clean energy.”

    To help encourage residents to install solar power on their homes, the state offers some incentives to help reduce costs of systems and installation. Among these are a strong net-metering program, various tax credits, property-assessed clean energy (PACE) financing, rebate programs for installing clean energy. In this sun-drenched, desert state with limited water resources and greatly varying temperatures, energy-efficiency and water conservation also are paramount and the state has many incentives for residents and businesses that undertake energy efficiency projects and for practicing sustainable building techniques—including installing renewable energy.

    New Mexico has a renewable portfolio standard (RPS) that requires investor-owned utilities in the state—i.e., companies like Xcel Energy—to source at least 20 percent of the electricity sold to retail customers from renewable sources by 2020. In addition, the utilities must offer customers the option to purchase energy generated from renewable resources.

    The RPS has incremental steps, one of which requires utilities to source 10 percent of power generated for their retail customers to come from renewable sources by 2011. As utilities work to meet these goals, it is becoming important for them to sign customer-generators to distributed-generation contracts, particularly because 3 percent of investor-owned utility’s RPS must come from distributed generation (like home and building owners) by 2015. Of all the renewable power the utilities must include in their portfolio, at least 20 percent must come from solar, another 20 percent from wind, and 10 percent from other renewable technologies. Rural electric cooperatives must get or generate 10 percent of their electricity from renewable sources by 2020 under the law.

    Utilities prove compliance with the renewable energy requirements through renewable energy credits (RECs) that are registered with the Western Renewable Energy Generation Information System (WREGIS). Such unused energy credits have a four-year lifespan. Customer-generators entering into net-metering arrangements and performance-based incentive programs with their utility company automatically sell their renewable energy credits to their utility under New Mexico law.

    Despite the incentives and the RPS, New Mexico still has a long way to go to reach its full solar potential. While it should be second in the nation in terms of solar, according to OpenPV, a project of the National Renewable Energy Laboratory, New Mexico is 22nd in terms of installed solar power capacity. It’s also 16th in terms of how many installations are operational, as of August 2010.
     

     

  • New Mexico Net Metering


    Program Type Net Metering
    Technologies Photovoltaics and Solar Thermal
    Amount Up to 80 megawatts (MWs)
    Required Documentation

    Interconnection agreement sent to customer’s utility for systems up to 10 kW. For larger systems,

    additional studies and paperwork are required.
    Official Web Site http://www.nmprc.state.nm.us/energy/solar.htm#

    New Mexico allows customer-generators producing up to 80 megawatts of electricity to sign up for net metering—the highest in the country as of August 2010. Under the rules customer-generators, businesses and industrial operations may qualify to net-meter. Systems up to 10 kilowatts (more than enough for most homes and small businesses) may sign up using only the interconnection agreement. When customer-generators net meter, they sell any renewable energy credits (RECs) to their utility.

    Utilities set the rate at which they reimburse customer-generators for the electricity and generation credits. For net excess generation, net-metered customers must be credited at the utility’s avoided-cost rate for power produced. In addition, the credit either is carried forward to the next month’s bill, or if net excess generation exceeds $50 during a monthly period, the utility will pay the customer-generator for the power produced. Net metering customer-generators producing less than 10.1 kW of power do not need additional equipment other than an inverter capable of being tied to the grid to enter into net-metering arrangements with their utility. The rates paid to customer-generators are set by their utilities.

    The three main utilities in the state, PNM, Xcel Energy and El Paso Electric, all offer performance-based incentives in addition to the net-metering payments. The performance-based incentives are purchased by the utilities in the form of RECs. The utilities use the credits to count toward their renewable energy portfolio.

    As of August 2010:

    • PNM offered customer-generators producing between 0.5 kW and 10 kW $0.13 per kW hour produced for RECs. System owners must enter into a 12 year power purchase agreement with PNM.
    • Xcel offered customer-generators producing between 0.5 kW and 100 kW $0.20 per kW hour produced for RECs. Systems up to 10 kW enter into a power-purchase agreement for 14 years. Systems between 10.1 kW and 100 kW enter into 10 year power-purchase agreements. And existing systems operating after February 2009, are eligible to enter into an contract for $0.10 per kW hour.
    • El Paso Electric offered customer-generators producing 10 kW or less $0.12 per kW hour produced for RECs with solar, less for wind. For systems up to 100 kW and installed after Jan. 1, 2010, the company offered $0.155 per kW hour, less for wind. All contracts are for a 12 year period.

    Related Links: New Mexico Solar Installers

  • New Mexico PACE Financing


    Program Type Property-based Financing
    Technologies Photovoltaics and Solar Thermal
    Amount Determined locally
    Required Documentation Determined by district
    Official Web Site http://www.emnrd.state.nm.us/ECMD/CleanEnergyTaxIncentives/CleanEnergyFinancing.htm

    In 2009, New Mexican lawmakers passed two bills that allowed counties in the state to create financing programs to support renewable development for home and building owners. These programs allow counties in New Mexico to create renewable energy financing districts and fund them by issuing bonds or securing other financing. Home and building owners opting in to the programs can fund their clean energy projects with little or no up-front money.

    After the property owners purchase the system with the PACE money, an assessment equivalent to the amount financed is assessed on the property and added as a lien on the property, usually paid for as part of the local property tax. The assessment is paid back over a period of years. In the case of foreclosure, the lien is paid prior to other claims against the property. If the property is sold prior to full repayment of the lien, both the remaining lien and the renewable-energy installation are transferred to the new owner.

    New Mexico also enacted legislation allowing counties to create a solar energy improvement special assessment provision. Counties are not authorized to directly finance solar installations on homes under this law. However, they can certify private banks and financial institutions as institutions that certify solar-energy improvements. The institutions may loan property owners up to 40 percent the property’s assessed value to finance solar-energy improvements. Property owners enter into a direct agreement with the project funder and send notification to the county. Loans through the program are assessed as liens against the property and repaid via a property-tax assessment.

    The programs began in 2009, and not all counties yet offer PACE or financing for solar energy projects through private institutions. Thus far, Sante Fe County has started a PACE program, and Lincoln County may soon follow. The state now is encouraging other counties and municipalities to enact renewable financing with educational brochures and assistance from the state’s Energy Conservation and Management Division, which is working with the New Mexico Association of Counties.

  • Solar Market Development Tax Credit


    Program Type Tax Credit
    Technologies Photovoltaics, Solar Hot Water, Solar Space Heating, and Cooling and Solar Thermal
    Amount Limited to $9,000 or 10 percent of system installation and cost
    Required Documentation Solar System Certification Application Form and Solar System Installation Form
    Official Web Site http://www.emnrd.state.nm.us/ECMD/CleanEnergyTaxIncentives/solartaxcredit.htm

    New Mexico’s Solar Tax Credit is funded at $5 million a year and is available to home owners and non-corporate business owners. Eligible PV and other solar energy systems must be operational after Jan. 1 2009, to be eligible for the credit. Applicants are eligible to receive up to $9,000 or 10 percent of system costs. And they may apply for multiple incentives. For instance, someone installing a PV system and a solar thermal system could qualify for up to $18,000 in tax credits in a year. Applicants also are eligible for the 30 percent federal tax credit on a qualified system.

    Since it was established in 2006, New Mexico said it has invested $13.8 million through the tax credit. The state reported that “$2.8 million in state solar credits was used to leverage $1.2 million in federal tax credits.” It added that the incentive has supported installation of “372 solar PV systems producing 986 kilowatts and 268 solar heating systems generating 20.5 million British Thermal Units (BTUs) per day.”

  • New Mexico Solar Power Financial Incentives


    Financial Incentives

    Corporate Tax Credit

    Industry Recruitment/Support

    Personal Tax Credit

    Production Incentive

    Sales Tax Exemption

    State Bond Program

    Utility Rebate Program



    Rules, Regulations & Policies

    Building Energy Code

    Energy Standards for Public Buildings

    Interconnection

    Mandatory Utility Green Power Option

    Net Metering

    Public Benefits Fund

    Renewables Portfolio Standard

    Solar Access Law/Guideline




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