Your Guide to Solar Panels in New Mexico: 7 Steps to Solar Panels in New Mexico

Step 1: What to Consider When Buying Solar Panels in New Mexico

Solar systems are more affordable in New Mexico compared to most other states, but they still average over $18,000 before state solar incentives and federal and state tax credits are applied. In the following sections, we’ll explain how to figure out if solar is a good idea for your home before you spend thousands converting to renewable energy.

Research If Solar Panels Are a Good Fit For You in New Mexico

Solar conversion is worth it for most New Mexicans. But with solar panel systems costing between $10,000 and $27,000 on average, you should really assess your home’s solar viability before diving into investing in renewable energy sources.

The first thing we recommend doing is using our solar calculator to see how many panels are recommended for your home and your energy needs. The average size of a solar array in the state is 7 kilowatts (kW), which comes with a pre-incentive price tag of around $18,700.

If you need a much larger system size to offset your energy consumption, but your energy demands are in line with local averages, then your system will cost more and your solar viability would be lower than average.

Some things that can affect the number of panels you need include tree coverage and local weather conditions. Tree coverage on your roof diminishes the amount of sunlight that your panels can absorb and convert to energy. Local weather conditions also play a role because areas that see more cloudy weather than usual will get less sunlight, leading to lower solar production over time.

Since panels produce less under cloud coverage, cities like Clayton which see 261 sunny days per year will have a slightly lower solar viability than Roswell, which sees 281.³ Although your production will be lower in areas with fewer sunny days, all cities in New Mexico receive plenty of sunlight to make solar worthwhile. However, reduced production is still something to think about.

Consider Net Metering

Another crucial consideration when determining how valuable solar will be for your home is the net metering program offered by your utility company. New Mexico’s Public Regulation Commission (PRC) currently mandates net energy metering for all utility companies under its jurisdiction, which is great news for residents.

Net billing is a policy that credits you for every kilowatt-hour (kWh) of overproduction your panels send to the electric grid. The credits reduce future energy bills, effectively reducing the rate you pay for electricity.

While the PRC mandates net energy metering (NEM), it doesn’t set a specific credit rate for each kWh you send to the grid. As such, your total savings will depend partially on the NEM policy offered by your electric company.

The Public Service Company of New Mexico (PNM) offers the full retail rate for excess power, which is ideal and will end up saving the most money over time.⁴ Xcel Energy uses a below-retail rate close to the wholesale rate, which will end up saving you much less over time, unfortunately.⁵ However, you can cash out excess credits for a profit if you accrue enough.

The El Paso Electric Company also uses a below-retail rate, which isn’t as beneficial as the full retail rate.⁶

The table below provides a side-by-side look at some solar statistics in the Grand Canyon State and the U.S. as a whole. These should help you visualize how valuable solar conversion is in your area.

Research How to Finance Solar Panels

If you determine that solar is going to be a valuable investment for you, then you can move on to researching financing options to see which suits you best.

We recommend starting this process by figuring out what solar will cost you in NM. You can multiply the average cost per watt for photovoltaic (PV) equipment in the state — $2.68 — by the total system size recommended for your home.

This cost estimate could be intimidating, but there are financing options for PV equipment that can help bring down your initial costs. Plus, one of the biggest benefits of going solar is that your solar energy system will eventually pay for itself and then provide additional savings. Your system total could be a lot, but eventually, it will be offset.

Once you have an estimate of what your solar array will cost you, you can decide which payment options you can afford and which will benefit you most. You have four main options to choose from:

• Cash purchase: A cash purchase means you’ll be responsible for paying for the entire system at once, which is unrealistic for a lot of homeowners. However, if you can afford to do this, you’ll see the lowest overall conversion costs and the highest long-term energy savings due to a lack of loan interest.

• Solar loan: A solar loan comes with a much smaller down payment, and sometimes none at all, so it’s a more accessible option. Loans still lead to panel ownership, but interest will bump up your installation costs and bump down your savings over time. Solar loans have a longer panel payback period as well.

• Solar lease: A solar lease is a rental agreement for the PV equipment on your roof, so you’ll never own your panels. That means two important things: first, you can’t take the federal investment tax credit (ITC); and second, your savings won’t offset your installation costs at any point, so they’ll be lower over time. You do, however, get to use the energy the panels generate to offset your power bills.

• Power purchase agreement (PPA): A PPA is similar to a lease, but instead of using the power the panels generate, you instead agree to buy the energy they produce at a discounted rate. These agreements lead to some of the lowest returns on investment and don’t let you take the federal tax credit, although they do come with no initial investment.

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Step 2: Getting a Quote from a Solar Provider

At this point, you’re ready to start reaching out to solar providers in your area to get estimates for your installation. We’ll break down this part of the process in the following sections and explain what to expect along the way.

Picking a Solar Installer

Of course, before you request a free quote, you have to choose a solar company. This can be a deceptively complicated step, as there are around 50 installation companies in the state, according to the Solar Energy Industries Association (SEIA).⁷ All of these providers bring something different to the table. We recommend prioritizing the qualities below when researching solar contractors:

• The company should have mostly positive customer reviews and few, if any, complaints filed by customers with the Better Business Bureau (BBB).
• The company should have reasonable pricing, carry high-quality equipment brands and accept the payment option that works best for you.
• The company should employ technicians who are certified by NABCEP (North American Board of Certified Energy Practitioners).
• The company should offer good warranty coverage, which we’ll explain later on.
• The company should have at least five years of experience serving the local solar industry.

Below are some of the installation companies that we commonly recommend in your state. These providers meet the criteria above and have a good reputation in the area.

• NM Solar Group — Local installer
• SunPower — National installer
• OE Solar — Local installer
• Solar Works — Local installer
• ADT Solar — National installer

For more information on these installers and why we’ve chosen them, you can read our guide to the best solar companies in NM.

What to Expect After Requesting a Quote

A sales representative should reach out to you within 24 to 48 hours after you request a solar quote. The rep will ask for a recent electric bill to see your average monthly consumption, and they may ask you questions about your electricity consumption. You should also be prepared to talk about what appliances and heating and cooling equipment in your home use electricity.

Your sales rep should then schedule an in-person roof inspection, which is required to see the state of your roof and confirm that you don’t need repairs or replacement before installing PV panels.

After the inspection, all of the information gathered will be sent to the internal design team, and your solar project design will be underway. When the design is completed, your sales rep should send you a formal solar proposal and set up a call to discuss the specifics.

Solar proposals have a lot of information, so a good sales rep will want to discuss everything to make sure it makes sense. Below are just some of the things that will be included in your proposal:

• Your solar panel system total before and after the federal tax credit and other local incentives and solar rebates.
• The size of your system, the energy it is expected to generate and the savings it will provide you over time.
• Where and how all of your solar equipment — including add-on products — will be installed in and on your home.
• Information about your payment method and when funds are due.
• Information about your warranty coverage.
• An estimate for your panel payback period.
• Information on fees you’ll have to pay for inspections and permits.

We strongly recommend getting proposals from two or three companies. Shopping around lets you compare quotes for the best value, and it might save you money if one or more of the providers offers price matching. Some companies will provide other ways to sweeten the deal, like free service, free panel cleaning, free add-on products and more.

Consider Purchasing Solar Accessories

To save time, it’s a good idea to request quotes for all of the products you want to be included with your clean energy system. All systems come with panels and inverters, but there are other things you might want to include to add value to the setup and expand its functionality.

We’ll list a few of the popular add-on accessories below, along with a brief description of what makes them popular in your area.

• Solar batteries: Battery storage systems like the Tesla Powerwall store excess power your panels produce and save it for when your consumption is higher than your energy production. Energy storage gives you access to effective retail-rate net metering, which isn’t always available in your area. Batteries add to the upfront cost of PV panels, but they can end up saving you far more than New Mexico’s NEM policy. Batteries also let you maintain electricity through power outages, which is a nice bonus.

• Electric vehicle (EV) chargers: EVs are quickly gaining popularity in New Mexico, so it’s no surprise that at-home EV chargers top the list of the state’s most popular solar add-ons.⁸ These provide the convenience of charging at home and can reduce charging costs when coupled with panels and batteries.

• Energy efficiency upgrades: New Mexico homeowners experience excessively hot summers that lead to massive spikes in electricity consumption to power air conditioners. Some solar providers in the area offer energy efficiency upgrades alongside panel installation. These include smart thermostats, solar water heater installations, the replacement of insulation, windows and doors and more.

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Step 3: Signing a Solar Contract in New Mexico

When you’ve decided on all of the equipment you want to be installed and know which installer you’re going to move forward with, your next step is to sign the contract with that company. We’ll discuss some things to look for in your contract language and what to expect after you sign in the sections below.

How Do Solar Warranties Work in New Mexico?

One of the most crucial things to look for in your contract is the language regarding your warranty coverage. Solar warranties come in three different varieties, and the contracts that benefit you the most will have robust coverage in all three of the following areas:

• Equipment warranties: Equipment warranties cover defects that arise during the manufacturing process, so they’re typically offered by your panel manufacturer. These last for an average of 25 years.

• Workmanship warranties: Workmanship warranties or labor warranties cover the labor provided by your installer. Some of the more robust workmanship warranties include coverage for roof leaks, but most don’t. The typical labor warranty lasts for ten years from the installation date.

• Efficiency warranties: Panel efficiency warranties guarantee that your panels won’t lose more than a certain percentage of their original efficiency over time. The specifics of these warranties can vary based on starting efficiency, but the average is no more than 20% degradation over 20 years.

When Can I Expect Solar Service to Go Live?

The time between signing your solar contract and your panels actually producing power for your home will usually be between three and six months in New Mexico.

Part of the wait is for filing for permits, which is required by your local building department. Ordering equipment can take some time as well, especially if you need high-demand products that are often back-ordered, like Tesla Powerwalls. Some of the longest delays can come from waiting on your electric company to complete its final inspection for interconnection.

Thankfully, since New Mexico homeowners enjoy some of the sunniest weather in the country, rain and other inclement weather will rarely cause delays.

Solar Panel Permits in New Mexico

Building permits and/or electrical permits are mandated by every municipality in New Mexico before installing and connecting PV equipment. Your installation company should file for the permits for you, and it should also coordinate any inspections if any are needed. The only thing you’ll be responsible for is the permit fee, which can vary based on where you live.

In general, solar permit fees will cost between $100 and $500 in New Mexico.

For example, the City of Albuquerque charges an average of $100 for the permits required for solar installation.⁹ Las Cruces charges a flat fee for the solar system permit and inspection, totaling $250 for residential solar customers.¹⁰ Santa Fe has one of the lowest permit fees for solar, totaling just $50.¹¹

If in doubt about your permitting fees, you can ask your installer, call your local building department or check your solar proposal — your fees should be included in the total price.

Solar & Utility Interconnection

Interconnection is the term that describes how your solar project connects to and interacts with the power grid. It’s through interconnection that a customer is able to pull power from the electric grid when their production dips below consumption. Interconnection is also required for net billing.

The interconnection application process can vary among utility companies in the state, but the basics are universal. Your installer should file the application, you will pay the application fee if there is one, a formal inspection will be completed and your system will be approved.

PNM has a printable application available online, and the company charges a $50 application fee for residential solar systems.¹² Xcel Energy uses an online portal to handle applications, and the company charges $100 for the application.¹³,¹⁴ El Paso Electric also uses an online portal to manage interconnection application and charges a $50 fee to apply.¹⁵

The actual application process can be time-consuming. It requires schematics, single line diagrams and additional information for your proposed solar array. You can also run into delays with your power company getting out to inspect your system before activation.

Regardless of the wait time, it’s worth it to sign up for interconnection. This is what allows you to take advantage of net billing, which will prove to be massively beneficial to you in the long run.

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Step 4: What to Expect on Solar Panel Installation Day in New Mexico

On the day your panels are scheduled to be installed, your installer should begin working early in the morning and will likely continue the installation through the afternoon. Solar installations take between four and eight hours in New Mexico.

Many solar customers wonder, “do I need to be home for solar panel installation?” The answer is yes. You or another adult should be home all day when your panels are being installed. Your technicians will occasionally need access to your home, and someone should be there to provide it as needed.

Since delays are commonly attributed to electric companies being behind on inspections, your installer might schedule the electric company inspection on the installation day to save time. Solar inspections can extend your installation timeline by around 30 minutes.

Step 5: Final Inspection for Installed Solar Panels in New Mexico

After the installation is completed, your solar company will contact your local building department to close out the permits. Permits need to be closed so that you don’t run into violations or issues with selling your home in the future.

Some building inspectors will complete exterior inspections, which don’t require anything from you. However, others will want interior access to check the connection to your electric meter, and any add-on products installed in your garage will also need to be inspected.

Your installation company should schedule the inspection on your behalf if access is required, but you’ll have to be home for it. If you miss your appointment, you might be on the hook for a re-inspection fee, which usually falls between $25 and $100.

Once your building department inspection is completed, you’ll be left to monitor your home solar system for any issues. Some manufacturers, like Tesla and SunPower, include solar monitoring apps for this purpose. Your installer should let you know if you have access to a monitoring app, but it can’t hurt to ask in case they forget to bring it up.

Step 6: Permission to Operate (PTO) in New Mexico

You’ll need one additional inspection completed by your utility provider if it wasn’t completed on the installation day. A representative from your power provider will need to inspect the connection to the grid to make sure everything is up to code and done safely. This inspection is mandatory before your panels can get activated.

You won’t need to be home for the inspection, so there’s nothing to do on your part but wait. Once the inspection is done, your installer will either come to your house to show you how to turn your system on and off, or they’ll instruct you how to do it virtually.

In either case, make sure you ask your installer how to locate and use the emergency shut-off switch outside your home. You can also ask about solar monitoring software available to you. If they haven’t already, your representative should help you set up the app or software.

Going forward, you’ll be responsible for reporting any issues with your system. If you run into major problems, like an electrical fire, call 911 and then contact your power company immediately. We’ll include the emergency numbers for some of the more popular utility providers in the state below.

• Public Service Company of New Mexico: 1-888-342-5766

• Xcel Energy: 1-800-895-2999

• El Paso Electric: 1-800-592-1634

Step 7: Sit Back and Enjoy Your Solar Energy in New Mexico

Finally, you can sit back and enjoy all of the benefits your panels provide! If you’ve completed the steps above, your CO2 emissions and contribution to pollution have been reduced, as have your carbon footprint and your monthly utility bills. Congrats!

We should also mention that your solar system will provide the most impressive return on investment if you use your panels to offset your electric bills for the expected panel lifespan. However, you should still see a return if you sell your home, as solar conversion improves the value of your property.

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