2023 Solar Incentives Guide for Las Cruces, NM - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Las Cruces.
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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What Solar Tax Credits, Incentives, and Rebates are Available in Las Cruces?
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
Solar incentives help mitigate the cost of installing solar panels on your home. Financial incentives like these are designed to encourage more homeowners to switch their home over to renewable energy. You may qualify for several types of incentives, including discounts, cash back or credit towards your monthly utility bill, depending on your situation. Some incentives come from your specific utility company, county or municipality, some from the state of New Mexico and others from the federal government. Some broad categories of solar incentives include:
- Net Metering: Net metering becomes relevant after your solar panels are up and running. If you have a net metering agreement with your Las Cruces utility company, it will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some areas, this credit is dollar-for-dollar, while in other places you might receive a refund equivalent to a percentage of the value.
- Rebates: A rebate is a partial refund credited to your account after you've paid for your solar system. Rebates could be offered by your local utility company, your state or your county. The discount that rebates offer is normally applied to the price of solar panels before calculating tax credits.
- Tax Credits: Tax credits decrease, dollar-for-dollar, the amount of income tax you owe the government. These are different from tax deductions.
- Tax Exemptions: Tax exemptions can come in one of two forms. The first is sales tax exemption, applied when you purchase solar panels. The second is property tax exemption. This allows you to exclude the added value of your solar system when paying property tax on your home.
Federal Solar Incentives
Federal incentives are the kind of incentives that you are most likely to have some knowledge of. The solar incentive that you're most likely to have heard of is the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a predetermined percentage of your solar system's cost.
The ITC initially applied to 30% of the cost of solar panel installation, although that number has fluctuated slightly over time between 26-30%. The percentage you qualify for will depend on when your solar system was installed. The cost of installation includes the panels themselves as well as the cost of accessories, labor and equipment. There is no maximum amount you can claim. The ITC can be applied to solar panels installed after January 1, 2006 on your primary or secondary residence. The residence must be in the United States and owned by you.
Have questions about how the ITC applies to your specific situation? Get in touch with your local Las Cruces solar panel installation expert to get more information.
In August 2022, the Inflation Reduction Act laid out new provisions for the ITC, now titled the Clean Energy Credit. The new Clean Energy Credit is valid until 2035. American homeowners can now receive a 30% credit for solar systems installed between January 1, 2022 and December 31, 2032. The credit will then decrease annually until the date of expiration. The expansion to the program also makes it easier to get credit for energy storage systems, beginning in 2023.
More information about the new Inflation Reduction Act can be found here. To best understand how the new Clean Energy Credit might apply to you, talk to your local Las Cruces solar installation company.
State & Local Solar Incentives
Some solar incentives may be offered at the local or state level. Like with federal incentives, these might include rebates, tax credits and more. Some incentives are offered for only a limited time, while others are ongoing. Your local incentives could come from the New Mexico government, or from your specific county or municipality.
Next Steps for Installing Solar in Las Cruces
The variety of available solar incentives has helped tremendously increase the use of solar power nationwide over the past 15 years. You can get solar incentives from the New Mexico government, the federal government or your local utility company. We recommend talking to your local Las Cruces solar installation expert for more information about these incentives and to be sure that you're getting the most money possible for your solar system.
EcoWatch's Las Cruces, NM Solar Incentives FAQs
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.