2025 Solar Incentives Guide for South Valley, NM - Tax Credits & Rebates

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

Source: https://www.dsireusa.org/

Solar incentives are intended to make renewable energy usage more affordable through financial incentives for individuals who install solar panels on their homes. Solar incentives might include upfront discounts, cash back or monthly credits towards your utility bill. Some incentives are provided by the federal government, some by the New Mexico government and some by your specific utility company, county or municipality. You might qualify for any of the following types of solar incentives:

• Tax Exemptions: Your solar panels might qualify for both sales tax and property tax exemptions. Sales tax exemptions are effective at the time of purchase. Property tax exemptions let you exclude the value added by your solar panels when you are calculating property taxes on your home.
• Net Metering: Net metering is an incentive you can get after your solar panels are up and running. If you have a net metering agreement with your South Valley utility company, the company will subtract the value of the excess energy your solar system produces from your utility bill each month. In some areas, this credit is dollar-for-dollar, while in other places you may receive a refund equivalent to a percentage of the value.
• Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the government. (This is different from a tax deduction.)
• Rebates: Solar companies may help you claim a rebate, or partial refund of your purchase, for your solar system. Counties or states will also offer limited-time rebates at various times. Any rebates you receive will usually come off your total price before tax credits are calculated.

Federal Solar Incentives

When people think of solar incentives, federal incentives are likely the first thing that comes to mind. It's likely that you've heard of the Federal Solar Investment Tax Credit, or ITC. The ITC is a tax credit that reduces your taxes by a predetermined percentage of the money you spend installing solar panels.

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. Originally, the ITC covered 30% of all costs (panels, accessories, equipment and labor), although the amount has fluctuated slightly 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 amount you can claim.

To more fully understand how the ITC will apply to you, speak to your local South Valley solar panel installer and ask for more information.

The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as renaming it to the Clean Energy Credit). The Clean Energy Credit runs until 2035. Your solar installation project undertaken between 2022 and 2032 may qualify for a 30% tax credit; this amount will then decrease slightly each year until the end of the current program. The expansion to the program also makes it easier to get credit for energy storage systems, starting in 2023.

More information about the new Inflation Reduction Act can be found here. To fully understand how the new Clean Energy Credit will apply to you, reach out to your local South Valley solar installation expert.

State & Local Solar Incentives

There are more than just federal solar incentives; rebates, tax credits and more might also be offered at the local or state level. The incentives — which might be handled by your county or municipality, or by the state of New Mexico — could be offered on an ongoing basis, or for only a limited time.

Next Steps for Installing Solar in South Valley

You can apply for solar incentives from the federal government and the New Mexico 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. Speak with your local solar panel installer today to learn more and to save the most money possible on a solar system for your South Valley home.