2023 Solar Incentives Guide for Farmington, NM - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Farmington.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
Solar installers are experts in maximizing your solar tax credits and rebates.
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Updated March 14, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Farmington?
Property Tax Exemption for Residential Solar Systems
Solar Energy Gross Receipts Tax Deduction
Geothermal Heat Pump Tax Credit (Personal)
Geothermal Heat Pump Tax Credit (Corporate)
Local Option - Renewable Energy Financing District/Solar Energy Improvement Special Assessments
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
The phrase "solar incentives" generally refers to financial incentives designed to encourage the adoption and use renewable energy by making the installation and use of solar panels more affordable. Different types of incentives, like discounts, cash back or monthly utility bill credits, may be available to you. Certain incentives may be handled by the New Mexico government, by your utility company or by county or municipality, while other incentives are federal. Types of solar incentives might include:
- Tax Exemptions: Tax exemptions may come in two forms. The first is sales tax exemption, which is applied when you purchase solar panels. The second is property tax exemption, which allows you to exclude the added value of your solar system when calculating property tax for your house.
- Net Metering: Be sure to speak with your Farmington utility company about signing a net metering contract. This allows you to receive credit towards your utility bill every month for the value of excess energy generated by your solar panels. You may receive either a dollar-for-dollar credit or a percentage of the value.
- Rebates: Solar rebates may be offered by your local utility company, or by your county or state. These rebates work as cash back that is applied after you pay for a solar system and before tax credits are calculated.
- Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in how much in taxes you owe the federal government.
Federal Solar Incentives
When thinking about solar incentives, you likely think of federal incentives first. You may have heard of the Federal Solar Investment Tax Credit, or ITC. This incentive is a tax credit that reduces your taxes by a specified percentage of the money you spend on your solar system.
The ITC covers solar systems installed after January 1, 2006 and allows you to deduct from your taxes a percentage of the total cost of solar panels, labor, equipment and accessories. You can receive this credit for solar panels installed on a primary or secondary residence that you own in the United States. The original amount you could claim was 30% of the total cost, although depending on when the project was completed, your credit may range from 26-30%. There is no maximum claim amount.
Your local Farmington solar panel installation expert can provide you with more information about the ITC and how it applies to your situation.
In August 2022, the ITC (now referred to as the Clean Energy Credit) was expanded and extended by the passage of the Inflation Reduction Act. The new Clean Energy Credit now runs until 2035. American homeowners are now eligible for a 30% credit for solar systems that began installation after January 1, 2022 and are completed by the end of 2032. This credit will then decrease annually until its expiration. Beginning in 2023, it will also be easier to qualify for credits for energy storage systems under the new laws.
Click here to learn more about the new Inflation Reduction Act. Your local Farmington solar panel company is the best resource for answering your questions about the new Clean Energy Credit and how it applies to you.
State & Local Solar Incentives
Some solar incentives are often also provided by state and local governments. As with federal incentives, these may include tax credits, rebates and more. The incentives — which might be given by the state of New Mexico, or by your county or municipality — might be offered on an ongoing basis, or for only a limited time.
Next Steps for Installing Solar in Farmington
There are many types of solar incentives: those provided by local utility companies, those provided by the federal government and those provided by the New Mexico government, to name a few. The use of solar energy has increased enormously in the last 15 years, partially due to these incentives. It is a good idea to talk to your local Farmington solar installer to learn more about these incentives and to make sure that you're getting all of the money you can for your solar system.
Best Technology
Tesla Energy
- Price-match guarantee
- Sleek, efficient, and durable solar panels
- Best solar battery on the market
- Some reported issues with customer service
- Customer service varies by local dealer
Best Warranty Coverage
Sunpro Solar
- Industry-leading warranty coverage
- Expansive service area
- Some reported communication issues
- No leases or PPAs
EcoWatch's Farmington, NM Solar Incentives FAQs
How can I find out if I qualify for solar incentives?
It's a smart idea to get in touch with your local Farmington solar installer for a better understanding of which incentives your project will qualify for. Generally, solar incentives apply to new solar systems installed on a property you own (in the U.S.) between the dates specified by the incentive. Some incentives, like those offered by the government of New Mexico, may have additional requirements.
How much will solar panels save me on my electric bill in Farmington annually?
Generally, homeowners in Farmington who install solar panels save around $1,026.70 per year, or around $19,507.33 over 20 years after making the switch.
Who installs solar panel systems near me?
To find the right solar panel installer for you, check out our guide to Farmington's best solar panel companies.
When does the federal solar tax credit end?
The federal solar tax credit, formerly known as the ITC and now titled the Clean Energy Credit, is set to end January 1, 2035. The current 30% credit will end in 2032, replaced by a 26% credit in 2033 and a 22% credit in 2034.
If I trade in my appliances for ones that utilize solar energy, are there benefits that I can claim?
With the passage of the new Inflation Reduction Act, there are a variety of new financial incentives for making eco-friendly improvements to your home. More details about these incentives, including information about incentives for purchasing new appliances, can be found here.
Our goal is to reach as many people as we can with sensible solutions like solar energy. Our team of full-time local researchers collects solar price and installation data for every city in America then compiles it to create these digestible city guides. If you want to read our solar expert's opinion on the top solar companies featured here, follow this link.
Solar incentive research was conducted by Melissa Smith and Karsten Neumeister. Local data analysis was conducted by James Savino. See something we missed or could do better? Email the editor.