Solar Panels in New Mexico
6.0+ Peak Sun Hours — One of the Sunniest States in the US
$1,100/yr
Avg. Annual Savings
6.0 peak hrs/day
Peak Sun Hours
10–14 years
Payback Period
$13,000–$20,000
Avg. System Cost
Overview
Is Solar Worth It in New Mexico?
New Mexico is one of the sunniest states in the continental United States, averaging 6.0–6.5 peak sun hours per day. This exceptional solar resource, combined with the state's Solar Market Development Tax Credit (10%, up to $6,000), makes New Mexico a compelling solar market even after the expiration of the federal ITC.
Public Service Company of New Mexico (PNM) serves the Albuquerque and Santa Fe metro areas, while El Paso Electric serves the southern part of the state. Both offer net metering programs — though PNM introduced a Solar Energy Adjustment in 2026 that modestly reduces credit values for new installations.
Benefits
Why Go Solar in New Mexico
Reduce Your Electric Bill
New Mexico homeowners save an average of $1,100/yr after going solar.
State & Local Incentives
New Mexico offers property tax exemptions, net metering credits, and other state-level incentives that reduce your net cost. The federal 30% ITC expired Dec 31, 2025.
Increase Home Value
Solar panels increase your home's resale value — and are excluded from property tax in most states.
Energy Independence
Lock in your electricity rate and protect against rising utility costs for 25+ years.
Available Incentives
New Mexico Solar Incentives & Tax Credits
New Mexico Solar Market Development Tax Credit
Tax CreditNew Mexico offers a 10% state income tax credit on the cost of a solar installation, up to $6,000 per year. The credit is active through 2031 and can be carried forward for up to 10 years.
Net Metering (PNM / El Paso Electric)
Net MeteringPNM and El Paso Electric offer net metering for residential solar customers. PNM introduced a Solar Energy Adjustment in 2026 that reduces credits by ~15% for new interconnections. El Paso Electric customers receive full retail-rate credits.
Property Tax Exemption
Tax ExemptionSolar energy systems are exempt from New Mexico property tax assessment increases.
Federal Solar Tax Credit (Expired)
Tax CreditThe federal 30% residential solar tax credit (Section 25D) expired December 31, 2025. Not available for 2026 purchases.
What Changed in 2026 for New Mexico Solar
The federal solar tax credit expired December 31, 2025 — here's what that means for New Mexico homeowners and what options remain.
Federal ITC Gone — State 10% Tax Credit Active Through 2031
The 30% federal residential solar tax credit expired December 31, 2025. New Mexico's own Solar Market Development Tax Credit (10% of system cost, up to $6,000 per year) remains active through 2031. A typical 8 kW system in New Mexico costing $16,000 generates a $1,600 state tax credit in year one. The credit is non-refundable but can be carried forward for up to 10 years. A proposed bill to increase the state credit to 30% was postponed indefinitely.
PNM Net Metering Adjusted — New Solar Energy Charge
Public Service Company of New Mexico (PNM) introduced a Solar Energy Adjustment for 2026 interconnections, reducing net metering credits by approximately 15% compared to prior years. New installations receive credits at a slightly reduced rate rather than the full retail rate. El Paso Electric customers in southern New Mexico are not affected by this change. Factor the PNM adjustment into your payback calculation if you are in the PNM service territory.
Strong Sun Hours — 6.0+ Peak Hours Per Day
New Mexico averages 6.0–6.5 peak sun hours per day — among the highest in the continental United States. Despite lower electricity rates ($0.15/kWh) compared to northeastern states, the high solar production means a typical 8 kW system generates significantly more electricity annually than the same system in a northern state. Combined with the state tax credit, New Mexico remains a strong solar market in 2026.
Common Questions
New Mexico Solar FAQ
Local Solar Companies
Solar Companies by City in New Mexico
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