The federal government offers a 30% solar tax credit to boost investments in renewable energy. However, the incentive will start to scale down at the end of the year. In 2020, the solar tax credit drops down to 26% and then to 22% in 2021.
Finally, in 2022, residential houses can no longer claim solar tax credits, although commercial projects can still claim 10% of the total investment as a tax credit.
Thankfully, Senate Bill 518 has reintroduced New Mexico solar tax credits, which were discontinued back in 2016.
Here are the benefits you can get from New Mexico’s clean energy program:
10% Income Tax Credit
Any solar installations in your home or business will allow you to claim new mexico solar tax credits of as much as 10%. This incentive is proposed to last until January 2029. However, the amount of your claim should not exceed $6,000. The good news is that the law is retroactive so long as you managed to install your system after Jan. 1, 2019.
Net Metering Policy
The New Mexico net metering policy allows you to “sell” excess energy generated by your solar panels when you integrate it into the grid. You will be credited on your next billing cycle. If you continue to generate excess energy, the energy credits that remain unutilized will be carried over from month to month until such time you use them, or you leave the system. Different utilities can also employ their net metering programs although there’s a cap of 10 kW for systems.
Tax Credit for Sustainable Building
If you get your house or building certified as a sustainable structure, you can get more incentives from your solar panels. The US Green Building Council is the agency that issues the certification. Accordingly, for each square foot of the solar panel, you will earn at least $6.50. But getting the certification won’t be easy. A sustainable structure is a design philosophy that employs green methods throughout the structure’s life cycle.
Property Tax Incentives
The solar panels that you install on your roof won’t be factored into the computation of your property taxes. This more than makes up the difference since New Mexico solar panels typically raise the value of homes. However, when you decide to sell the property, your solar roof will be included in the total assessed value.
RE Tax Credit
The revenues you earn from the solar panels won’t be counted against your personal or corporate tax. This incentive will last for ten years, and the rate varies year-on-year. A commercial solar generating facility, meanwhile, has a 2 million MWh cap for facilities when trying to obtain renewable energy tax credits.
New Mexico solar tax credits make the state one of the most progressive governments in the country when it comes to supporting renewable energy projects. However, if you’re a homeowner, you can still take advantage of the investment tax credit offered by the federal government from now until 2021 as long as your system is operational.