Find out if solar panels are right for your home in New Mexico.
The Land of Enchantment is making significant strides in harnessing solar energy, with a notable increase in major solar projects. As of the second quarter of 2023, the state has installed solar facilities capable of generating 1,777 MW, sufficient to power 419,068 homes.
New Mexico has been part of receiving significant investments in the solar sector, amounting to $3.2 billion which is shared with Texas. Major projects include the Chaves Solar in Roswell, Meta's Encino Solar project in Sandoval, and the Britton Solar Energy Center in Moriarty, which collectively contribute to powering tens of thousands of homes.
The average price for a home solar panel system in New Mexico is $20,340 for a 6kW system or about $3.39 per watt. Systems will vary depending on the solar installation company the types of solar panels you choose and the size of your system. When shopping for solar panels you should consider getting multiple quotes from various installers.
| Average Cost 6 kW System | Average Cost 10 kW System | Estimated Tax Credit (10 kW System) | Average Cost/Watt | |
|---|---|---|---|---|
| U.S.Average | $18,771 | $31,285 | $9,385.50 | $3.13 |
| New Mexico | $19,020 | $31,700 | $9,510 | $3.17 |
| U.S.Average | $18,771 | $31,285 | $9,385.50 | $3.13 |
| Most Costly State(Michigan) | $22,680 | $37,800 | $11,340 | $3.78 |
| Least Costly State(Arizona) | $14,640 | $24,400 | $7,320 | $2.44 |
For most, the ideal solar system size is the sweet spot between price and capacity. The goal is to generate enough electricity to cover your home's demand while keeping overall costs low as possible.
I.E. Get the best bang for your buck.
| System Size | System Cost | Cost After Federal Tax Credit |
|---|---|---|
| 5 kW | $15,850 | $8,785 |
| 6 kW | $19,020 | $10,542 |
| 7 kW | $22,190 | $12,299 |
| 8 kW | $25,360 | $14,056 |
| 10 kW | $31,700 | $17,570 |
Unfortunately, even solar isn’t perfect. We want you to make the best decision for you. So, we have collected some pros and cons associated with installing solar in your home state. We suggest weighing everything!
Opinions matter and how you interpret one con, may outweigh all the other pros. Our goal is to present the most common prone and cons to let you make up your own mind.
New Mexico has an ideal climate for solar panels. Plenty of sunlight during peak energy usage seasons. But, electricity costs in New Mexico are relatively low compared to other states making the $ per power in savings less. However, don’t let that deter you. The amount of sunshine, could make up for the lower rate.
Most homes could still expect a payback of 5 to 8 years. And with solar panels average lifespan of 20 to 25 years, that’s a great ROI. If you prioritize energy independence and renewable energy, those could be great additional benefits.
Overall, we believe solar would be a viable for most.
If you are on the fence you can use this tool to get an accurate cost breakdown for your home based on your historical energy usage.
There are several ways you can purchase and/or finance your solar panel installation in New Mexico. Your goals and financial situation will dictate which option is best for you.
The most straightforward option. You pay upfront for the entire cost of the rooftop solar system. No interest, and fewer headaches, but many people are hesitant about spending several tens of thousands of dollars out of pocket.
The most common method for buying solar systems. Like many other types of large purchases, you can finance your solar system through a bank or solar loan provider.
This sounds great, and many other solar loan salespeople will leverage the low payment to justify the costs. You will likely hear something like "You pay $250 a month on your electric bill, with a solar loan you will pay $200 and have free electricity."
Do your due diligence before you sign on the dotted line. There are many horror stories of variable loan terms, ballooning interest rates, and harsh missed payment penalties.
Leasing solar panels generally involves less money out of pocket upfront. But, it's important to note - you do not own your solar energy system. You essentially renting the solar system. A solar provider will install the equipment and charge you a fixed monthly fee.
Most solar lease contracts last for a couple of decades, during which time the provider will keep an eye on the system's hardware and performance. At the end of your lease, you can choose to:
Solar leases can be complicated. Not all are bad, but in many cases the lease terms in not in favor of the buyer. Before you decide on a solar lease make sure to read your contract thoroughly. If you don't understand something, ask an expert.
A power purchase agreement (PPA) is a financial agreement where a solar company will design and install a solar system on your home or business with little or no cost upfront. Instead of paying a monthly fee like a lease, the agreement includes a fixed price per kilowatt-hour (kWh) of electricity generated.
For example, you agree to pay $0.12 per kWh of electricity generated for the next 20 years. The solar company will install and maintain your system and sell the power back to you that you use. They may also collect payment for any additional energy they put back into the grid.
Just like a lease, you do not own the panels. When the contract is up, they will either be removed or your contract may have other terms for you to buy or renew your power purchase agreement.
Power purchase agreements can be complicated. Before you sign make sure you review the contract and if possible have an expert in power purchase agreements review the details.
In addition to the 30% Federal Solar Tax Credit, you may be eligible for solar incentives that could significantly reduce the cost of solar panel installation. The primary incentives include the Solar Market Development Tax Credit (SMDTC), which allows homeowners to claim 10% of the project costs up to $6,000 as a state tax deduction, and the Sustainable Building Tax Credit (SBTC), which offers up to $6.50 per square foot for sustainable design in new constructions and renovations. Additionally, a property tax exemption is in place, ensuring homeowners are not taxed for the increase in home value after installing solar systems. It's important to note that the SMDTC has a limited annual budget, urging residents to apply early in the year to secure their incentives.
This table shows the available incentives in New Mexico. But, just because you don't see it here doesn't mean it doesn't exist. Check with your local utility for other potential incentives.
| Name | State | Category | Type |
|---|---|---|---|
| Schools with Sol | NM | Financial Incentive | Grant Program |
| Fuel Mix and Emissions Disclosure | NM | Regulatory Policy | Generation Disclosure |
| System Benefits Charge | NM | Regulatory Policy | Public Benefits Fund |
| Net Metering | NM | Regulatory Policy | Net Metering |
| New Mexico Solar Easements & Rights Laws | NM | Regulatory Policy | Solar/Wind Access Policy |
| Clean Energy Revenue Bond Program | NM | Financial Incentive | Bond Program |
| PV Leasing Program | NM | Financial Incentive | Leasing Program |
| Renewable Portfolio Standard | NM | Regulatory Policy | Renewables Portfolio Standard |
| Renewable Energy Production Tax Credit (Corporate) | NM | Financial Incentive | Corporate Tax Credit |
| Interconnection Standards | NM | Regulatory Policy | Interconnection |
State Tax Credit: New Mexico offers a state solar tax credit that covers 10% of your installation costs, up to a maximum of $6,000. If your system costs about $18,000, you can expect a credit of about $1,800. This credit can be carried forward for 5 years if your annual tax due is less than this amount.
Net Metering: In New Mexico, you can get 1-to-1 retail electricity rate credits for the excess solar electricity you send back into the grid. These credits are carried forward indefinitely. You also retain control of any renewable energy credits your solar system produces, which you can sell to PNM as part of their solar performance program.
PNM Solar Payments: PNM offers a program where they pay you $0.0025 per kWh for a term of 8 years for the renewable energy credits your system generates. However, this amounts to a small sum of around $300 over 8 years, excluding a $150 application fee.
Property Tax Exemption: Installing a solar power system increases your home value, but thanks to a property tax exemption in New Mexico, your property taxes will not increase.
There are hundreds of solar companies in New Mexico. From solar installers to solar loan providers, and manufacturers. Each is a piece of the puzzle to help you get outfitted with solar panels.
To make things simple, EnergyBot works directly with 3 of the largest solar companies to give you a comprehensive view of the market.
The solar companies we partner with:
We believe comparing these three names in the solar industry will give you the info you need to decide if solar panels are right for you.
Just because solar is a popular discussion right now, doesn’t mean it makes sense for everyone. It is still a large and expensive decision. Installing solar has great financial and environmental benefits but it won’t feel beneficial if you run into issues. Along with studying a 20-year cost comparison for your home, read some more tips to keep in mind when mulling over your decision on your installer, system design, and financial plan.
In August of 2023 in New Mexico, questions raise about the rapid growth of the solar industry. NM Solar Group, once a leading solar company in the state, abruptly closed its doors, citing rising interest rates and a tightening credit market. The sudden closure left customers who had made down payments and employees awaiting paychecks in a difficult situation. The incident serves as a cautionary tale about the potential pitfalls of rapid expansion in the solar sector.
In the aftermath, the New Mexico Attorney General's Office filed a lawsuit against NM Solar Group to recover thousands of dollars for customers who paid for services they never received. This legal action, coupled with an investigation into other solar companies for similar complaints, highlights the need for stronger consumer protections and regulatory oversight in an industry experiencing rapid growth.
We have helped thousands of customers find electricity plans for their home or business. And we are pretty darn good at it, with over 1,000 5-Star reviews we know how to help you stay powered up.
Now using the same one-of-kind technology and platform we are helping consumers in New Mexico decide if solar is right for them. You will notice that sometimes our numbers make solar look less attractive. That's not by accident. We believe you should have full transparency during the solar purchasing process.
We aren't here to sell you something. We are here to help you make the best energy decision for your home or business.
The cost of solar panel installation in New Mexico can vary significantly based on a number of factors, including the size and type of the system, the complexity of the installation, your solar installer, and the specific location. However, the average cost of solar panels in the U.S. was about $3.13 per watt, before any incentives or tax credits.
A typical residential solar system is usually around 8 kilowatts (8,000 watts), but varies based on energy use and the size of the house. The US average cost for a 6 kW system is $18,771 and the US average cost for a 10 kW system is $31,285, before incentives. The average price for a home solar panel system in New Mexico is $20,340 for a 6kW system or about or about $3.39 per watt.
The number of solar panels you would need depends on a variety of factors such as:
To give you a rough estimate, let's say you live in a location that receives about 5 hours of peak sunlight per day, your solar panels have an efficiency of 20%, and each panel has a power rating of 300 watts. If your home uses about 10,400 kWh per year, you would divide this by 365 to get your daily energy use (about 28.5 kWh). You would then divide this by the hours of peak sunlight (5 hours), to get your required power output per hour (about 5.7 kW). If each solar panel produces 300 watts (or 0.3 kW), you would divide 5.7 kW by 0.3 to get the number of solar panels you need, which would be about 19 panels.
The installation process for solar panels can take anywhere from a few days to a few weeks, depending on the size of the system and the complexity of the installation.
Your installer should be able to give you an estimated timeline based on your specific project.
Solar panels generally require very little maintenance. However, it's a good idea to have them inspected every few years to ensure they are working properly and to clean off any debris or dirt that may have accumulated on the panels. Most solar panel installers offer maintenance services for an additional fee.
Some skilled DIYers may be able to save some solar installation costs by installing solar equipment themselves. But, any solar installation will require a foundational knowledge of wiring and electricity. There's is a lot that can go wrong, posing a potentially deadly hazard.
Before you try to DIY your system we would recommend getting a quote from a solar installer. You may find that the labor costs of your install is relatively small compared to the cost of the solar equipment itself.
There are two main types of solar panels: Monocrystalline and Polycrystalline. There are pros and cons to both. Either type can produce enough solar power for your home. We recommend getting a recommendation from a solar installer for your home. Depending on your budget, location, and other factors they can recommend the most efficient solar panels for your home.
New Mexico, getting a solar permit is pretty straightforward but can vary depending on your local jurisdiction.
Typically, you'll need to submit a permit application to your local building department, which usually includes site plans and system specs. Some cities have streamlined this process to encourage solar adoption. It's always a good idea to consult your local building department for the nitty-gritty details like required documentation and fees.
If you're working with a solar installation company, they often handle the permitting process for you.
