New Mexico’s Solar Benefits: 2023 Edition of Tax Credits, Incentives, and Rebates
New Mexico, renowned for its abundant sunshine, is a solar energy hotspot, offering an ideal environment for maximizing the productivity of solar panels. With this sun-soaked advantage, it’s no surprise that the state government provides a range of fiscal perks to make the switch to solar even more appealing. This comprehensive guide breaks down all the juicy details of the solar incentives available in the “Land of Enchantment” for 2023.
State Solar Incentives in New Mexico: An Overview
New Mexico serves up a trio of tempting financial incentives for taxpayers looking to transition to solar:
- Solar Market Development Tax Credit (SMDTC)
- Sustainable Building Tax Credit (SBTC)
- Property Tax Exemption on Solar Installations
As of the current year, the state doesn’t offer direct solar rebates or sales tax exemptions. Yet, the available tax incentives can put significant money back in your pocket, potentially saving you hundreds or even thousands of dollars.
Solar Market Development Tax Credit (SMDTC)
- Incentive Value: Slash 10% off your solar system costs, capped at $6,000
- How Often: One-time credit
Administered by the Natural Resources Department, the Solar Market Development Tax Credit (SMDTC) allows you to claim a 10% deduction on the total project cost up to a max of $6,000. Whether you’re a homeowner, a business owner, or a farmer, this tax break is within your reach.
But be warned, there’s a catch. The state has allocated a $12 million annual budget for this program, available on a first-come, first-served basis. In 2022 alone, 3,785 solar installations benefited from an average incentive of $3,055 per project.
The Money-Saving Example: Suppose you invest in a 6-kW home solar system for $14,280. The state credit would chop off $1,428, and the federal 30% tax credit would further reduce it by $4,284. In total, you get back $5,712, recovering nearly 40% of your investment in record time.
Sustainable Building Tax Credit (SBTC)
- Incentive Value: Earn up to $6.50 per square foot for eco-friendly building design
- How Often: One-time credit
The SBTC is a two-pronged approach targeting both energy-efficient upgrades in existing homes and sustainable designs in new constructions. While solar panels aren’t directly eligible for existing homes, the credit does cover electric vehicle chargers and ENERGY STAR heat pumps, which can be powered by your solar panels.
For new homes, SBTC requires you to meet specific sustainability certifications such as Build Green NM Gold or Emerald, and LEED Residential Gold or Platinum. Solar panels can enhance your eligibility by reducing your home’s overall energy consumption.
With a budget cap of $7.15 million, this program is not exclusive to solar but can synergize well with other energy-saving measures you might implement.
Property Tax Exemption: The Underrated Bonus
- Incentive Value: Variable, based on local tax rates
- How Often: Ongoing
Introduced in 2010, this policy ensures that your property taxes won’t skyrocket just because you’ve added value to your home with a solar installation. If your house is assessed at $300,000 and solar panels boost its worth to $320,000, your tax bill remains calculated on the original $300,000 value.
So, why wait? Sunshine is abundant but these incentives may not be. Explore the solar advantages New Mexico has to offer and make your move to a brighter, greener future.
