New Solar Market Development Tax Credit

New Mexico provides a 10% personal income tax credit (up to $6,000) for taxpayers that own a residence, business, or agricultural enterprise who purchase and install certified photovoltaic (PV) and solar thermal systems on their property. Eligible systems include grid-tied commercial and industrial PV systems, off-grid and grid-tied residential PV systems, active solar thermal systems, and systems with or without storage. To be eligible, systems must first be certified by the New Mexico Energy, Minerals and Natural Resources Department. The taxpayer must then apply for the tax credit with the New Mexico Taxation and Revenue Department within 12 months of installation. Note that solar pool or hot tub heaters and passive solar heating are not eligible for this tax credit.

If the credit exceeds a taxpayer's tax obligation, the taxpayer will receive the excess as a tax refund that year. Aggregate credit levels are capped annually at $12,000,000. These tax credits are set to expire December 31, 2032.

All relevant forms and eligibility requirements are available on the program website listed above.