New Mexico Solar: A 10% State Credit, First Come, First Served

Written by Dean Mahmoud, CEO, and checked by Trevor Guilday, founder.Prices from the September 2026 Cost Index. Updated October 14, 2026.

A typical New Mexico home system is 7.04 kW and costs about $19,078 in cash at $2.71 per watt. On PNM it pays back in about 9.8 years if the state certifies your 10% tax credit, or 10.9 years if the year’s $30 million budget is gone first.

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With or without the 10% state credit: New Mexico payback on PNM

The credit is real money, but it is paid only after the state certifies your system, and only while that year’s budget lasts. So look at your payback both ways before you sign.

Credit certified 9.8 years

  1. You apply to the state energy department (EMNRD) after the inspection.
  2. EMNRD certifies 10% of the cost: $1,908 on the typical system.
  3. You claim it on your state return. It is refundable, so you get it even with a small tax bill.

Budget gone 10.9 years

  1. EMNRD certifies up to $30 million of credits a year, first come, first served.
  2. Once that is reached, it issues no more for that year.
  3. Your system then has to pay for itself on bill savings alone.
Typical 7.04 kW system on PNM, $19,078 cash, 12,839 kWh a year
CaseYour net costYearly savings after upkeepSimple payback
State credit certified: $19,078 − $1,908$17,170$1,7569.8 years
Yearly budget gone: no state credit$19,078$1,75610.9 years

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How we calculated this
  • Output: 7.04 kW × about 1,824 kWh per kW = 12,839 kWh a year (EcoGen Solar Cost Index, Albuquerque-class sun).
  • Savings: 5,136 kWh used at home as it is made plus 7,703 kWh sent to PNM (a 40% and 60% split). On a system of 10 kW AC or less, PNM returns each kWh you send as a kWh credit, so all 12,839 kWh are valued at 15.32¢: $1,967 a year.
  • Upkeep: $30 per kW a year, $211.20, which includes an inverter reserve. $1,967 − $211 = $1,756.
  • Payback: net cost ÷ $1,756. $17,170 ÷ $1,756 = 9.8 years. $19,078 ÷ $1,756 = 10.9 years. No financing, rate changes or panel aging.
  • 15.32¢ is the EIA state average for the 12 months to July 2026. It includes fixed charges, so it can overstate what solar saves.
  • With El Paso Electric, month-end extra is credited at its fuel and purchased power cost, so payback runs longer. Xcel Energy credits or pays it at its monthly energy rate; with a co-op, ask for the rule. We print no figure for them because we have no confirmed credit per kWh.

Run your own New Mexico numbers

How the New Solar Market Development Tax Credit gets certified

New Mexico still pays a state income tax credit on home solar you own. Nothing about it is automatic: two state offices handle it, in order.

10%Of the cost

Equipment, materials and labor, up to $6,000 per taxpayer a year.

$30 millionYearly budget

First come, first served. The state posts no running balance.

Dec 31, 2027Deadline for 2026 systems

December 31, 2027: always December 31 of the year after the install.

RefundableEven with a small tax bill

The state pays out what your tax does not cover.

Before and during the install you and your installer

  1. Before you sign, write into the contract who prepares the EMNRD application and by what date.
  2. The installer asks your utility to connect the system.
  3. The system passes its building inspection. Keep the report with the permit number and date.

After the inspection you

  1. Apply online to EMNRD with proof you own the home, an itemized invoice, the inspection report, a site plan and the wiring diagram.
  2. EMNRD reviews complete applications in the order they arrive and sends a certificate of eligibility.
  3. Claim the credit on your New Mexico return with Form TRD-41406.
Who qualifies, and the fine print
  • You must buy the system and own the home it sits on. With a lease or a power purchase agreement (PPA), the company owns the panels and you cannot claim it.
  • An incomplete application does not hold your place in line.
  • The credit runs for systems installed through 2031 (NMSA 7-2-18.31).
  • Married couples filing separately each claim half.
  • The credit can be sold or transferred. Report it to the Taxation and Revenue Department within 10 days on Form TRD-41417.
  • EMNRD’s page lists a battery installed with solar as eligible, but the law names only solar. Ask EMNRD in writing before you count battery costs.
  • When we checked on October 1, 2026, EMNRD said it was processing applications and did not say how much of the 2026 budget was left.

New Mexico incentives guide

Which New Mexico utility is on your bill: PNM, El Paso Electric or Xcel Energy?

Within a month, every regulated utility subtracts your solar kWh from the kWh you use. The difference is what happens to power left over at month end.

PNM

kWh credits that never expire

For systems with 10 kW AC of inverter capacity or less. Leftover credits are paid at Rate 12 when you close the account.

Next: check that your inverter stays at 10 kW AC or less.

El Paso Electric

Fuel-cost credit

Month-end extra is credited based on its fuel and purchased power cost, not your full rate. Net metering only for systems expected to make up to 120% of your yearly use.

Next: get the current credit per kWh in writing.

Xcel Energy (SPS)

Energy-rate credit

Its New Mexico company is Southwestern Public Service. Its Rate 4 credits or pays month-end extra at its monthly energy rate, not as kWh credits, so it is lower than the price you pay.

Next: ask Xcel for the current energy rate.

Month-end extra and community solar credit, by New Mexico utility
UtilityYour own panels: month-end extraCommunity solar credit per kWh
PNMSaved as kWh credits up to 10 kW AC; paid monthly at Rate 12 above that9.06¢
El Paso ElectricCredited at its fuel and purchased power cost6.19¢
Xcel Energy (SPS)Credited or paid at its monthly energy rate (Rate 4)7.16¢
Rural cooperativesThe state rule, where the commission regulates them: ask your co-opNot in the state program
City utilities, such as FarmingtonTheir own rules; the state rule does not applyNot in the state program

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The state rule, and community solar if you rent

The Public Regulation Commission’s rule, 17.9.570 NMAC (in force since May 24, 2022), covers home systems up to 10 kW. Each utility picks one of two methods for month-end extra: carry the kWh forward, or pay or credit them at the utility’s energy rate, which is based on its own cost of power and is lower than the price you pay.

Community solar lets PNM, El Paso Electric and Xcel Energy customers subscribe to a share of a large project in their own utility’s area. The credits above were set July 1 (PNM), August 1 (Xcel) and September 1, 2026 (El Paso Electric). You also pay the subscription manager, so your saving is the difference. 30% of each project is reserved for low-income customers. Solar for All has been paused since August 7, 2025.

PNM’s 10 kW AC line: credits that wait for summer, or Rate 12 pay each month

PNM sorts home systems by inverter size. The typical 7.04 kW New Mexico system sits under the line, but a larger quote can cross it.

Small PV Program 10 kW AC or less

  1. Extra kWh at month end become a Cumulative Renewable Energy Credit on next month’s bill.
  2. The credits never expire. Spring credits can cover summer air conditioning.
  3. PNM pays for any left when you close the account, at Rate 12.

Large PV Program over 10 kW AC

  1. Extra kWh are not saved.
  2. PNM pays for them at Rate 12 on the same month’s bill.
  3. Ask your installer for Rate 12 next to your own rate before you choose this size.
10 kW ACPNM’s line

Measured at the inverter, not the panels. Ask for the inverter rating on your quote.

120%El Paso Electric’s size limit

Of your yearly use, for net metering. A larger system needs another metering option.

10 kWThe state rule

17.9.570 NMAC sets net metering for systems up to this size.

AskXcel Energy and co-ops

Get the size limit and month-end rule in writing.

PNM’s own explanation

What New Mexico solar costs at $2.71 per watt, and after a certified credit

Modeled cash prices from the September 2026 Cost Index, not quotes we collected. The last column assumes EMNRD certifies your 10% credit.

Cash price by system size
Size
Yearly output
Cash price
After a 10% credit
5 kW
9,120 kWh
$13,550
$12,195
7.04 kW (typical)
12,839 kWh
$19,078
$17,170
8 kW
14,592 kWh
$21,680
$19,512
10 kW
18,240 kWh
$27,100
$24,390
How we got these numbers
  • 7.04 kW is the median size New Mexico homeowners installed in 2025 (Berkeley Lab, 3,212 systems). Size yours to your own use.
  • Output uses about 1,824 kWh per kW a year. The typical row is the Index’s own 12,839 kWh. Shade lowers it.
  • The credit is 10% of the price, capped at $6,000, which a system would reach at $60,000. A system you own gets no federal tax credit after December 31, 2025.

Full New Mexico price guide

Gross receipts tax, property value and who owns the panels: New Mexico’s other solar rules

No rebate checks for panels. Beyond the 10% credit, New Mexico keeps two taxes off a system you buy.

100%Gross receipts tax deduction

On the sale and install of a solar system, since 2007. Sign Form RPD-41341.

3%Property value limit

Solar cannot push your home’s taxed value past 3% a year (6.1% over two). Ends at a sale.

$0To file for the limit

The county assessor applies it. Check your yearly notice of value.

PausedSolar for All

Since August 7, 2025. Nothing to apply for now.

Ways to pay, and who can claim the state credit
Way to pay
Owner of the panels
Can claim the 10% credit
Ask before you sign
Cash
You
You
Who files the EMNRD application, and by when
Loan
You
You
Total financed vs. cash price; dealer fee
Lease or prepaid lease
The company
Not you
What you get in return; buyout or transfer if you sell
PPA
The company
Not you
Price per kWh and yearly increase

Swipe the table sideways to see every column.

New Mexico tax credit and incentivesWhere the credit goes in a $0-down deal

Before panels go on a New Mexico roof: size, HOA rules, storms and your plans

  • Size to your useOn PNM, stay at 10 kW AC or less to keep kWh credits. On El Paso Electric, stay at or below 120% of your yearly use.
  • HOA and city rulesA deed rule made after July 1, 1978 that in effect bans panels cannot be enforced (NMSA 3-18-32). Historic districts can still regulate them.
  • Sun, dust and stormsAsk for hail terms in the warranty and a dust loss in the production estimate. Shade still lowers output.
  • Time in the homeCompare your planned stay with your quote’s payback. The property value limit ends when the home sells.

Is solar worth it for your New Mexico home?

Three New Mexico installers, listed A to Z

All three are based in New Mexico. A to Z, not ranked. Facts from their own sites and, where shown, the state license registry, read October 13 and 14, 2026.

Positive Energy Solar

Office
Santa Fe, NM (head office) and Albuquerque
Licenses
No number published; ask for its New Mexico license
Warranty
30-year limited warranty on panels, inverters, roof penetrations and labor, backed by SolarInsure
More facts
Operating since
1997 (company says)
Ways to pay
Cash, loan, prepaid lease
Positive Energy Solar profile

Sol Luna Solar

Office
Dixon and Albuquerque, NM
Licenses
NM 33662 (building, electrical, mechanical), active on October 13, 2026
Warranty
Workmanship warranty offered; term not published
More facts
Crews
Its own employees (company says)
Ways to pay
Cash, loan
Sol Luna Solar profile

Solar Works Energy

Office
Albuquerque and Las Cruces, NM; now trading as Epex Home Performance
Licenses
No number published; ask for its New Mexico license
Warranty
25-year performance guarantee advertised; workmanship term not published
More facts
Founded
2015 in Albuquerque (company says)
Ways to pay
Cash, loan, lease, PPA
Solar Works Energy profile

None of these three companies buys homeowner leads from EcoGen America, and none carries the Verified badge. Two publish no license number: check any number you are given on the state Construction Industries Division lookup. How we make money.

Compare New Mexico solar companies in detail

Credit, tax form, utility rule: what a New Mexico quote should show

  • Payback both waysWith the 10% state credit and without it, so a used-up yearly budget does not surprise you.
  • Who files with EMNRDThe name of the person who prepares the credit application, and the date, in the contract.
  • No gross receipts taxNo tax line on the system, and your signed Form RPD-41341 in the file.
  • Your utility’s ruleYour utility’s name, the inverter size in kW AC, and what happens to extra power at month end.
  • Size against your billsYear-one kWh next to a year of your own use. El Paso Electric net meters only up to 120%.
  • No federal 30% lineIt ended for home systems you own after December 31, 2025. A quote that still shows it is out of date.

Comparing New Mexico quotes?

Ask each installer who files your state credit and what payback they show without it.

Get a New Mexico solar evaluation

EcoGen America does not sell or install solar. When you request quotes, we pass your request to solar providers serving your area, and they pay us for the introduction. Providers can include installers, solar marketplaces and lead exchanges, and more than one may contact you. You never pay us. This is not an application for the state tax credit. Privacy policy

New Mexico Solar FAQs

Can the New Mexico solar tax credit run out?

Yes, for a given year. EMNRD certifies up to $30 million of credits a year, first come, first served, and then issues no more for that year. It does not publish how much is left, and only a complete application holds a place.

Do I need to owe state income tax to get it?

No. The credit is refundable. If it is larger than the New Mexico income tax you owe, the Taxation and Revenue Department pays you the rest.

Does the 30% federal credit still apply?

Not for a system you own that is placed in service after December 31, 2025. The New Mexico credit is separate and runs for systems installed through 2031.

What does PNM do with credits I never use?

On a system of 10 kW AC or less, the kWh credits never expire. When you close your PNM account, PNM pays for any that are left at Rate 12.

Will solar panels raise my property tax?

Not past the normal limit while you own the home: 3% over one year or 6.1% over two. After a sale, the county sets a new value that can include the system.

Sources for every New Mexico figure on this page

Every figure on this page traces to one of the documents below, each with the date we read it.

Sources (17 documents, each with the date we read it)
  1. EcoGen Solar Cost Index, September 2026: New Mexico$2.71 per watt, 7.04 kW median size (Berkeley Lab 2025, 3,212 systems), about 1,824 kWh per kW, 12,839 kWh a year, 15.32¢ statewide average (EIA), 10th lowest of 51.
  2. EcoGen Solar Payback Methodology: New Mexico worth-it guideThe two PNM cases, 40% home use and 60% exports, $30 per kW a year upkeep. Inputs dated October 7, 2026.
  3. EMNRD: New Solar Market Development Tax Credit10%, $6,000, $30 million a year, first come, first served, deadlines, application papers, transfer. Read October 1, 2026.
  4. New Mexico Statutes, Chapter 7: Sections 7-2-18.31, 7-9-112 and 7-36-21.2The credit, the gross receipts tax deduction and the property value limit. Read September 29, 2026.
  5. Taxation and Revenue Department: Form TRD-41406Claiming a certified credit. Read September 30, 2026.
  6. Taxation and Revenue Department: Form RPD-41341Gross receipts tax deduction statement, in effect since 2007. Read September 30, 2026.
  7. Public Regulation Commission: 17.9.570 NMAC, net meteringSystems up to 10 kW, the two month-end methods, in force since May 24, 2022. Read September 30, 2026.
  8. PNM: Interconnection Benefits (Small PV and Large PV programs)10 kW AC line, credits that never expire, Rate 12 payments. Read October 14, 2026.
  9. El Paso Electric: New Mexico interconnection, facilities up to 25 kW120% of yearly use, credit based on fuel and purchased power costs. Read October 14, 2026.
  10. Xcel Energy (SPS) New Mexico: Rate No. 4, purchases from qualifying facilitiesMonth-end extra credited or paid at the monthly energy rate. Read October 14, 2026.
  11. New Mexico Community Solar Program: Solar Bill Credit RatesPNM 9.06¢, Xcel 7.16¢, El Paso Electric 6.19¢, table updated September 25, 2026. Read October 1, 2026.
  12. New Mexico Community Solar Program: Find a provider30% low-income share. Read September 29, 2026.
  13. EMNRD: Solar for AllPaused since August 7, 2025. Read September 30, 2026.
  14. New Mexico Statutes, Section 3-18-32Limits on HOA, city and county solar restrictions. Read September 29, 2026.
  15. U.S. EIA: average residential electricity price by state15.32¢, 12 months August 2025 to July 2026, as used in the Cost Index.
  16. IRS: Residential Clean Energy CreditNo credit for property placed in service after December 31, 2025. Read September 30, 2026.
  17. New Mexico Construction Industries Division license lookupSol Luna Solar license 33662, active. Read October 13, 2026.
Dean Mahmoud
Written by

Dean Mahmoud

CEO of EcoGen America. Since 2021 he has connected homeowners with residential solar installers in all 50 states.

About Dean
Trevor Guilday
Checked by

Trevor Guilday

Founder of EcoGen America. He has worked in residential solar since 2016 and maintains the EcoGen Solar Cost Index.

About Trevor

Editorial standardsCost Index methodologyVerified Installer methodology