2024 Solar Incentives Guide for Chaparral, NM - Tax Credits & Rebates

What Solar Tax Credits, Incentives, and Rebates are Available in Chaparral?

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Solar incentives mitigate the cost of installing a solar panel system on your home. These financial incentives are in place to encourage more people to switch their home over to renewable energy. Incentives could include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are provided by the federal government, while others are provided by the state of New Mexico or by your specific utility company, county or municipality. You might qualify for any of the following types of solar incentives:

• Net Metering: You may be able to sign a net metering agreement with your Chaparral utility company that will apply to all or a percentage of the excess electricity that is generated by your solar panels. Your utility company will then deduct this value from your utility bill each month.
• Rebates: Rebates, or cash back after a purchase, are usually applied before any solar tax credits are calculated. Rebates might be given by your local utility company, by your county or by your state.
• Tax Exemptions: Tax exemptions may come in one of two forms. The first is sales tax exemption, applied at the time you purchase your solar panels. The second is property tax exemption, which allows you to exclude the value added by your solar system when paying property tax on your house.
• Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government. (A tax credit is different from a tax deduction.)

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Federal Solar Incentives

Federal incentives are the kind of incentives that you are most likely to have some familiarity with. The solar incentive that you're most likely to have heard of is the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a specified percentage of your solar system's cost.

The ITC applies to solar panels installed on your primary or secondary residence in the United States. The solar system has to have been installed after January 1, 2006, on a property owned by you for you to be eligible for the credit. Originally, the ITC covered 30% of all system costs (panels, equipment, accessories and labor), although the covered amount has fluctuated over the last few years between 26-30%. The amount you qualify for will depend on when your solar system was installed. There is no cap on the amount you can claim.

Contacting your local Chaparral solar panel installer is the best way to understand how the ITC could apply to you.

The ITC was both renewed and expanded by the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. The Clean Energy Credit bolsters the current credit, increasing it up to 30% for solar installations undertaken between January 1, 2022, and December 31, 2032. At this point, the credit percentage will be reduced slightly each year until the program expires in 2035. Beginning in 2023, it will also be easier to get credits for energy storage systems under this new program.

More information about the new Inflation Reduction Act can be found here. The easiest way to learn more about how the new Clean Energy Credit applies to you is to reach out to your local Chaparral solar panel installation expert with your questions.

State & Local Solar Incentives

Tax credits, rebates and more might be provided at multiple levels. In addition to federal solar incentives, there are often state and local ones as well. These incentives may be given out by the New Mexico government, or by your county or municipality. Some incentives may be ongoing, while others are available for a limited time.

Next Steps for Installing Solar in Chaparral

You can qualify for solar incentives from the New Mexico government and the federal government, as well as from your local utility company. This increase in availability of solar initiatives over the last 15 years has helped increase solar adoption nationwide. Reaching out to your local Chaparral solar panel installation expert is an excellent first step towards getting the most money possible when you switch to solar energy.