Cost of Solar Panels in New Mexico: Local Solar Installation Prices (2022)
Here’s a quick look at the estimated cost of solar in New Mexico:
- Average Cost Per Watt: $2.68
- Cost of Average System: $13,882*
- Cost of Energy Without Solar: $34,173
- Payback Period: 12 Years**
- Lifetime Savings of Going Solar: $15,413
*Average system size is calculated using data from the Energy Information Administration. This price is after tax credit.
**Payback period is calculated assuming the system is purchased in cash.
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Cost of Solar Panels in New Mexico
Solar panels are often priced on a per-watt basis, which averages out to around $2.68 in New Mexico, more or less in line with the national average of $2.66. Most homeowners in NM need a 7-kilowatt system to offset their energy needs, which brings the total cost to an average of $18,760, or $13,882 after you consider the federal tax credit.
Given the relatively low energy needs and low electricity rates in New Mexico — the average electric bill is just $86 per month — some homeowners wonder if going solar is worth it. Thankfully, the low cost of going solar coupled with the above-average sun exposure makes solar a sound investment for most New Mexico residents.
Solar Panel System Installation Cost in New Mexico
Since solar panel systems are priced based on watts, larger system size requirements will naturally yield higher total costs. Each kilowatt you need above the standard 7-kW system will add about $2,680 to your costs. The table below provides some average prices for typical system sizes in New Mexico.
|Size of Solar Panel System||New Mexico Solar Panel Cost||Cost After Federal Tax Credit|
Want to see what system size you need and get a free quote for an affordable, high-quality system? Click here to get connected with the best solar companies in New Mexico.
What Determines the Cost of Solar Panels in New Mexico?
Solar energy systems in New Mexico generally fall between $7,993 and $19,832. The range is so wide primarily because of system size requirements, but other things can influence your price as well. We’ll discuss the most significant cost factors below.
There are plenty of solar manufacturers that produce equipment available in New Mexico, and the brand you choose will often play a major role in your total price.
Every equipment brand varies in price based largely on efficiency, durability and overall quality. In an area like New Mexico, where the net metering policy is good, high-efficiency panels are often preferred because they help totally offset electricity costs. Although you’ll pay more for Maxeon panels and Tesla Powerwalls, for example, these products are superior to most in the solar industry and can help you save in the long run.
The type of equipment you want to be included in your clean energy system can also bring your price up or down. All solar arrays include panels and either string inverters or microinverters. Many companies also provide add-on products — like solar batteries to provide power in a blackout and electric vehicle chargers to power EVs — that increase the value of your system and also bump up the price you pay.
Solar customers who opt to pay for their renewable energy system with cash will save the most money over time, and those that choose solar financing should plan to work the cost of interest into their total. You can use a solar calculator to determine the all-in price based on your system cost, APR and loan term.
When you’re choosing a solar installer and a lender that offers solar loans, you can reduce your total costs over time by maximizing your down payment. The more you pay upfront, the less you’ll pay in interest over time. Choosing a low-APR loan can also reduce your long-term costs for financing.
Solar Installation Company
Finally, the solar panel installation company you choose can affect your pricing. Companies charge differently for labor, some offer more appealing and expensive warranties and some might upcharge equipment. However, the price will fluctuate most based on the equipment brands they offer.
Some companies only install high-quality and high-efficiency solar equipment. These installers will naturally be more expensive upfront because the equipment is of a higher quality. The investment in the present will typically pay off in the future, as more efficient equipment usually saves you more money on your energy bills.
New Mexico Solar Incentives
The prospect of spending an average of $18,760 on a solar system in New Mexico might turn many homeowners away from solar altogether. However, the state and federal governments provide several incentives to entice New Mexico residents to convert to clean energy. We’ll discuss the most beneficial incentives below.
Federal Solar Tax Credit For New Mexico Homeowners
The federal solar investment tax credit (ITC) is the most appealing benefit to going solar for most homeowners. This incentive is offered to individuals throughout the country, and the credit scales with your system size. You’ll get a credit of 26% of your total system cost if you install it in 2022. In New Mexico, that’s an average amount of $4,878! Your effective total will drop from an average of $18,760 to an average of $13,882.
The federal tax credit won’t last forever, unfortunately. It’s scheduled to dip to 22% in 2023, and it will no longer be available in 2024 unless the bill is renewed.
Net Metering Policies in New Mexico
Net metering is a policy mandated by many state governments, including New Mexico. The policy requires utility providers to credit you in some way for overproduction. This policy exclusively benefits the homeowner. If your system generates more power than you’re using, you send the excess to the grid. If it underproduces for what you’re using, you can pull energy from the grid at a discounted rate for any prior overproduction.
In New Mexico, all utility companies subject to Public Regulation Commission (PRC) jurisdiction are required to offer net metering. Some can credit customers at a rate slightly lower than one-to-one, but most homeowners still benefit greatly.
Individual electric companies can vary in the credit rate and specifics. For example, PNM Resources in Albuquerque offers one-to-one credits that rollover from month to month. El Paso Electric Company uses a time-of-use (TOU) credit system that is slightly less beneficial in most cases. Xcel Energy has one of the most appealing policies, which offers one-to-one credits and pays you for excess energy production over time.
Local Solar Rebates in New Mexico
In case the federal tax credit and the net metering policies weren’t enough incentive, New Mexico also offers some appealing state incentives.
First, the Solar Market Development Tax Credit is a state tax credit in the amount of 10% of your total system cost, on top of the federal tax credit. In New Mexico, this averages out to an additional savings of $1,388.
Second, the Gross Receipts Tax Exemption is a sales tax exemption that prevents homeowners from having to pay sales tax on solar and renewable energy equipment. In New Mexico, where the state sales tax rate is 5.125%, that’s an additional average savings of $711. This is less appealing than the tax credits, but it’s still a huge deal.
Third, New Mexico offers a Property Tax Exemption, which can end up saving you thousands of dollars over time. Most home improvements that improve the value of your home also bump up your property taxes. While installing solar will increase your home value, the exemption guarantees that your taxes won’t go up as a result.
Finally, New Mexico has a slew of other local easement laws, solar rebates and energy-efficiency tax credits for new construction and commercial solar customers. You can check the DSIRE database to find out if there are additional benefits you can enjoy.
Best Solar Panel Brands and Installed Solar System Costs in 2022
Given the popularity of solar power systems in New Mexico, you’ll have plenty of equipment brands to choose from. Below is a list of some of the best solar panel brands available, as well as relative pricing to help you decide which might be right for your budget.
|Solar Panel Brand||Average Cost Per Watt ($-$$$$$)|
People Also Ask
EcoWatch FAQ: Solar Panel Cost New Mexico
The EcoWatch team gets lots of questions about going solar from New Mexico homeowners. Below are some of the ones we see most often that you might be wondering about as well.
Solar panel installation cost depends on quite a few factors, so it’s impossible to say with certainty what you will pay without completing a full home assessment. Solar installers take many things into consideration when pricing out your system, including your average monthly energy bills, your home size, the direction your roof faces, shading on your property, and much more.
With that being said, most New Mexico residents need a 7-kilowatt system to offset their energy bills. At an average cost of $2.68 per watt in the area, that’s a typical total of $18,760 before the federal tax credit or $13,882 after the credit.
Yes, absolutely! A bump in your home value is one of the most significant benefits of going solar in New Mexico. A nationwide study done by Zillow concluded that solar boosts property value by an average of 4.1%. Given the average home value of $272,362 in New Mexico, that comes out to a typical value bump of around $11,167! Value increases are expected to be even more substantial in more costly areas, like Santa Fe. The Property Tax Exemption also guarantees that that bump in value won’t increase your property taxes.
It’s crucial to understand that this value increase will only be enjoyed if you buy your home solar system outright or finance it. Solar leases and Power Purchase Agreements (PPAs) won’t cause your property value to increase.
We always suggest that homeowners use a cash purchase or solar loan to go solar. Solar leases might seem appealing, but many loans provide similar upfront payments and give you access to many additional benefits that leases don’t.
For example, a solar lease won’t let you take advantage of the federal tax credit, so you’ll miss out on a potential average savings of $4,878. Leases also don’t let you enjoy the other local benefits, like the Development Tax Credit.
Most importantly, your property value won’t increase if you lease your equipment. That means you’ll miss out on a bump in property value of about $11,167, on average.
No, never. Companies advertising “free panels” are usually just trying to get you to sign a solar lease, which is more beneficial to them than it is to you.
However, many homeowners in New Mexico find that their systems pay for themselves. Not only will you enjoy a boost in property value, but you’ll also save on electric bills and reduce your utility costs over time. Many NM residents effectively get paid to go solar.
Yes, it is possible to reduce your electric bills to $0 in New Mexico, and it’s actually quite easy. New Mexico residents enjoy average solar equipment costs, but they have the benefit of a great statewide net metering program and abundant, intense sunlight. Provided your roof is large enough to fit the system size you need, you shouldn’t have too much of an issue eliminating your electric bills.
Most homeowners in New Mexico need a system that is around 7 kW.
With that being said, this question is impossible to answer accurately without a complete property assessment. The system size requirements for your home will need to be based on your average monthly kilowatt-hours consumed, the size and energy efficiency of your home, the direction your roof faces, shading on your property, and more. For an accurate size and cost estimate, you’ll need to reach out to a reputable solar installer for a customized price.