2025 Solar Incentives Guide for Santa Fe, NM - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Santa Fe.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2024 and beyond)
- Ways to optimize your solar investment
Solar installers are experts in maximizing your solar tax credits and rebates.
Get a free quote from one of our trusted Santa Fe solar installers to see how much you can save.
Please enter a valid 5-digit zip code!
Why you can trust EcoWatch
What Solar Tax Credits, Incentives, and Rebates are Available in Santa Fe?
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)
PNM - Performance-Based Solar Program
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" refers to a range of financial incentives put in place to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Various types of incentives, including discounts, cash back or monthly utility bill credits, may be available to you. Certain incentives may be provided via the state of New Mexico, by your utility company or by county or municipality, while other incentives are federal. You might qualify for any of the following types of solar incentives:
- Net Metering: Net metering is an incentive you can get once your solar panels are up and running. If you've signed a net metering agreement with your Santa Fe utility company, they will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some places, this is a dollar-for-dollar credit, while in other places you may make back a percentage of the value.
- Rebates: A rebate is a partial refund credited to your account after you've paid for your solar panels. These may be offered by your local utility company, your county or your state. The rebates are usually applied before tax credits are calculated.
- Tax Exemptions: Your solar system might qualify for exemptions on both sales and property tax. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions let you exclude the added value of the solar panels when calculating property taxes on your home.
- Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the federal government. (This is different from a tax deduction.)
Federal Solar Incentives
Federal incentives are the type of incentives that you are most likely to have some knowledge of. An incentive that most people are probably familiar with is the Federal Solar Investment Tax Credit (ITC). The ITC is a tax credit for a given 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 panels must have been installed after January 1, 2006, on a property you own for you to claim the credit. Originally, the ITC covered 30% of all system installation costs (panels, accessories, equipment and labor), although the total amount has fluctuated over time between 26-30%. The installation date of your solar system will determine what percentage you are eligible for. There is no cap on the claim amount.
Speaking with your local Santa Fe solar panel installation expert is the best way to understand how the ITC applies to your situation.
The ITC was renewed and increased in scope after the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. Homeowners can now receive a credit of 30% of the total solar system installation costs for projects that began after January 1, 2022, and will be finished by the end of 2032. This percentage will then begin to decrease annually until the Clean Energy Credit ends in 2035. Beginning in 2023, it will also be easier to claim credits for energy storage systems under this new program.
Click here to learn more about the new Inflation Reduction Act. To understand how the new Clean Energy Credit might apply to you, talk to your local Santa Fe solar installation expert.
State & Local Solar Incentives
Federal solar incentives are not your only option; tax credits, rebates and more are often offered at the state and local level. Certain incentives are offered for only a limited time, while others are ongoing. Local solar incentives might come from the New Mexico government, or from your specific county or municipality.
Next Steps for Installing Solar in Santa Fe
Solar incentives can come from your local utility company, the New Mexico government or the federal government. The growing number of solar incentives available has helped nationwide use of solar energy increase greatly in the last 15 years. Your local Santa Fe solar panel installation company can give you more information about which incentives you should apply for, and get you on track to switch to renewable energy today.
EcoWatch's Santa Fe, NM Solar Incentives FAQs
If I already have a solar system installed on my house, can I still claim incentives?
An excellent idea would be to talk to a representative from the company that installed your system – or get in touch with a local Santa Fe solar installer — to better understand which incentives you may qualify for. If your system was installed after January 1, 2022, you likely qualify for the recently increased 30% tax credit under the Inflation Reduction Act. Systems installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
What are the highest-rated solar panel installation companies near me?
To find the best solar panel installer in your area, check out our guide to Santa Fe's best solar panel companies.
I want to trade in my old appliances for ones that are more energy-efficient. Are there any credits I can apply for?
The recently passed Inflation Reduction Act includes provisions for multiple incentives meant to reward homeowners for making eco-friendly upgrades. Some incentives include tax credits and rebates for installing new electric appliances. You can find more details about these incentives here.
Can I use solar and another type of renewable energy in combination to power my home?
Yes, you can employ multiple types of renewable energy to power your home — for example, a combination of wind and solar. You can also combine renewable energy generation with a backup source of non-renewable energy. You should discuss your plan with your local Santa Fe solar installation expert, to get an understanding of what will be needed and what kinds of incentives 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.