2023 Solar Incentives Guide for South Valley, NM - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in South Valley.
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 September 15, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in South Valley?
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/
Solar incentives are intended to encourage people to switch their home over to renewable energy by offering financial incentives that lower the burden of solar panel installation and use. Solar incentives can include upfront discounts, cash back or credit towards your monthly utility bill. Some incentives are handled by the federal government, some by the state of New Mexico and some by your specific utility company, county or municipality. You might qualify for any of the following types of solar incentives:
- Tax Credits: Tax credits lower, dollar-for-dollar, how much income tax you owe the government. Tax credits differ from tax deductions.
- Net Metering: Net metering is an incentive you can get once your solar system is up and running. If you've signed a net metering agreement with your South Valley utility company, the company 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 others you might be refunded a percentage of the value.
- Rebates: Solar rebates may be offered by your local utility company, or by your state or county. These rebates are essentially partial refunds that are applied after you purchase solar panels and before tax credits are calculated.
- Tax Exemptions: Your solar panel system could qualify for both sales tax and property tax exemptions. Sales tax exemptions are effective at the time of purchase. Property tax exemptions allow you to ignore the value added by your solar panels when calculating property taxes on your home.
Federal Solar Incentives
When people think of solar incentives, federal incentives might be the first thing that comes to mind. The Federal Solar Investment Tax Credit, or ITC, is likely the most well-known federal solar incentive. The ITC provides you with a tax credit for a specific percentage of your solar system's cost.
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 claim this credit for solar panels installed on a primary or secondary residence in the United States that you own. The original claim amount 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 amount you can claim.
Curious how the ITC might apply to your specific situation? Contact your local South Valley solar panel installer to get more information.
The ITC has been renewed and expanded following the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. Homeowners are now eligible for a credit equal to 30% of the total solar system installation costs for projects started after January 1, 2022 and completed before the end of 2032. The credit percentage will then decrease yearly until the Clean Energy Credit expires in 2035. Starting in 2023, it will also be easier to claim credits for energy storage systems under the new laws.
More information about the new Inflation Reduction Act can be found here. Your local South Valley solar panel installation expert is the best person to answer your questions about the new Clean Energy Credit and how it will apply to you.
State & Local Solar Incentives
Some solar incentives may be provided at the state and local level. As with federal incentives, these can include rebates, tax credits and more. These incentives may be offered by the New Mexico government, or by your county or municipality. Some are ongoing, while others are available for a limited time.
Next Steps for Installing Solar in South Valley
There are many types of solar incentives: those provided by the federal government, those provided by the New Mexico government and those provided by local utility companies, to name a few. Solar energy use has grown tremendously in the last 15 years, partially due to these incentives. Your local South Valley solar panel installation company can give you more information about which incentives you can apply for, and get you feeling good about making the change to renewable energy today.
EcoWatch's South Valley, NM Solar Incentives FAQs
Can I receive any incentives when I add solar panels to a rental property, vacation home or commercial property?
Many solar incentives are intended to apply to a property you own that is located within the United States; most secondary residences fall into this category. Other solar incentives may be available for commercial properties, depending on the details. We recommend talking to your local solar installer and/or tax professional to better understand what incentives may apply to your specific situation.
I already have solar panels. Are there any incentives that I qualify for?
If your solar panels were installed after January 1, 2022, you may qualify for the newly increased 30% tax credit under the Inflation Reduction Act. If your system was installed between 2006 and 2021, you may qualify for a tax credit between 26% and 30%, depending on the year it was installed. Reaching out to the company that installed your solar system, or any local South Valley solar installer, can help you understand what incentives you might want to apply for.
What are some environmental benefits of installing solar panels on my home?
Solar energy is a renewable energy source — by switching 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 annually, or roughly 10,000 pounds in 20 years.
Can I qualify for incentives both towards the up-front cost of solar panels, and later as reimbursement?
Yes, you can receive both tax credits and rebates towards the cost of your solar panels. Depending on precisely which incentives you are receiving, they may apply in a different order. Be sure to speak with your solar installer or a local tax professional to ensure that you are claiming the correct incentives and getting the most money possible.
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.