2023 Solar Incentives Guide for Lovington, NM - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Lovington.
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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By EcoWatch Local Advisors
Data Analysis: James Savino
Ranking Methodology: Karsten Neumeister
Updated May 04, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Lovington?
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
The term "solar incentives" refers broadly to financial incentives that are in place to encourage the use of renewable energy by making solar panels more affordable. Different types of incentives, such as cash back, discounts or credit towards your monthly utility bill, may be available to you. Some incentives may be handled by the state of New Mexico, by your utility company or by county or municipality, while others are federal. You might qualify for any of the following types of solar incentives:
- Tax Exemptions: Tax exemptions can come in one of two forms. First, there is sales tax exemption, applied at the time you purchase your solar panels. The second is property tax exemption. This allows you to exclude the value added by your solar system when paying property tax on your house.
- Rebates: Solar rebates can be provided by your county or state, or by your local utility company. These rebates are essentially partial refunds that are applied after you purchase solar panels and before tax credits are calculated.
- Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the federal government. (A tax credit is different from a tax deduction.)
- Net Metering: Net metering factors in after your solar system is up and running. If you have a net metering agreement with your Lovington utility company, it will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some areas, this credit is dollar-for-dollar, while in others you may make back a percentage of the value.
Federal Solar Incentives
When people think of solar incentives, federal incentives are likely the first thing that comes to mind. The Federal Solar Investment Tax Credit, or ITC, is likely the best-known federal solar incentive. The ITC allows you to claim a tax credit for a specific percentage of the cost of your solar system.
The ITC can be credited towards the value of solar panels installed on your primary or secondary residence in the United States. The solar system must have been installed on a property you own after January 1, 2006 for you to claim the credit. The ITC initially covered 30% of all installation costs (panels, labor, equipment and accessories), although the amount has fluctuated slightly 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.
To better understand exactly how much the ITC could save you, speak with your local Lovington solar panel installer.
In August 2022, the ITC (now referred to as the Clean Energy Credit) was bolstered by the passage of the Inflation Reduction Act. Now, solar installation projects started after January 1, 2022 and completed by the end of 2032 can qualify for a 30% tax credit. This percentage will then see a slight annual decrease until the end of the current Clean Energy Credit in 2035. Beginning in 2023, it will also be easier to get credits for energy storage systems with the new act.
More information about the new Inflation Reduction Act can be found here. To understand how the new Clean Energy Credit applies to you, speak with your local Lovington solar installation expert.
State & Local Solar Incentives
Some solar incentives may be provided by state and local governments. Similar to federal incentives, these may include tax credits, rebates and more. Certain incentives are ongoing, while others are available for a limited time. Incentives might be given by the New Mexico government, or by your county or municipality.
Next Steps for Installing Solar in Lovington
You can apply for and receive 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 in the past 15 years has helped increase solar adoption nationwide. Speaking with your local Lovington solar panel installation company is a great first step towards getting all the incentives you qualify for when you switch to solar energy.
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EcoWatch's Lovington, NM Solar Incentives FAQs
How do I know if I qualify for certain solar incentives?
It's a smart idea to get in touch with your local Lovington solar installer to get an 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, such as those offered by the government of New Mexico, might have additional requirements.
How much can I save annually on my electric bill if I install solar panels on my Lovington home?
Once you add solar panels to your home in Lovington, you can expect to save about $963.11 per year, or about $18,299.17 over 20 years.
What are some environmental benefits of adding solar panels to my home?
Solar energy is renewable — by changing where you get your energy, you help reduce the strain on our planet's resources. You can also reduce your home's CO2 emissions by 500 pounds yearly, or around 12,000 pounds in 20 years.
How long until the federal solar tax credit ends?
The Clean Energy Credit (formerly named the federal solar tax credit, or the ITC), currently ends on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.
Can I use multiple types of renewable energy to power my home?
You can use multiple types of renewable energy, or a combination of renewable and non-renewable energy, to power your home. Make sure you talk through your plan with your local Lovington solar installation expert. They can help you with the plan for your project and give you an understanding of various incentives that you might or might not qualify for.
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.