Senator William Soules has introduced SB 77, a New Mexico solar bill that proposes that all newly built homes in the state must come with a solar power system and a plug for electric vehicles. If signed into law, SB 77 would take effect in July of 2023 and require all new homes to have at least one watt of solar photovoltaics for each square foot of heated area.
With SB 77, New Mexico could become one of the most environmentally friendly states in the nation. This law would help reduce the state’s dependence on fossil fuels. It will also create jobs in the renewable energy field and spur economic development.
However, the Home Builders Association finds the SB 77 too big for homeowners. Jack Milarch, CEO of the New Mexico Home Builders Association, argues the bill will drastically increase building costs and may need to be more practical for homeowners. Milarch describes the proposed law as “a bill that pushes too far too fast,” although he clarifies they see these things in the future.
Senator Soules says future energy savings from the installed panels will offset the added cost. While the bill was already submitted for hearings, there’s still a need for specifications for the electric vehicle charging receptacle, which means there is still work to be done to make this law a reality.
The problem with SB77 and why it’s not good for homeowners
DroneQuote is invested in the solar industry, so it is expected that we would support more people adopting it. However, there are some arguments to be made against the proposed SB 77. Namely, this bill will more than make housing more expensive.
Builders will have the opportunity to obscure the cost of adding solar panels and may be inclined to charge a hefty premium for installing solar panels. Additionally, homeowners buying the house don’t usually have a say in the system size, which often leads to the system being undersized. If your system produces less power than you need, adding panels to existing systems usually increases the costs of add-on panels.
California passed a law similar to the New Mexico solar bill called the CA Solar mandate, enacted in January 2020. Often homeowners with solar panels installed at the time of home construction find themselves outgrowing their panel’s capacity and have been rushing to install more solar panels before net metering 3 goes into effect.
The proponents of the mandate argue that it will lead to cost savings, innovation, and increased renewable energy, but those not in favor worry it places a financial burden on homeowners and is not the most effective way to reduce carbon emissions. Gina Champion-Cain of American National Investments said that mandating new construction solar installation while imposing tariffs has conspired to increase solar installation costs. Jamie Moraga of IntelliSolutions also argues the solar mandate could increase construction costs by as much as $9 billion. Adding up to the housing costs will only turn away potential homeowners.
Is it wise to go solar in New Mexico?
Based on SEAI’s data, New Mexico is the 18th in the national ranking in solar states, with 1,231.4 MW solar panels installed in 2022. Solar energy can supply more than 248,000 in the state.
Here’s a glance at New Mexico Solar Statistics from SEIA:
New Mexico Solar Statistics
Source: SEIA New Mexico
The average cost of a solar energy system in New Mexico
The cost of solar power systems in the United States and New Mexico has diminished by more than 36% within the last 5 years and over 80% in the past decade. The cost of installing solar panels is at its lowest in history. As the price of solar panels decreases and utility rates continue to increase, more people are switching to solar. In New Mexico, solar energy costs an average of $3.38 per watt of direct current power installed. Although the initial investment may be substantial, consulting with a tax specialist may help determine how much you can save with the federal solar tax credit.
Solar Panel Energy Production in New Mexico
New Mexico has made considerable strides in solar power since 2007. Back then, the total produced by solar PV modules was a mere 0.5 megawatts, but by 2012, it had risen to 203.4 megawatts. By 2017, this had increased further to 695 megawatts. The total solar capacity in New Mexico is estimated to be 1,231.4 megawatts. Other states, such as Colorado and New Jersey, have followed a similar trend. This is attributed to the reduction in solar energy costs over the past ten years.
New Mexico solar incentives, tax credits, and rebates
If you decide to install solar panels in New Mexico, various solar incentives and federal tax credits can help defray the cost. Householders with a solar system can take advantage of several solar rebates and incentives. Among these are the Federal Solar Tax Credit, the Sustainable Building Tax Credit, Net Metering programs, a Property Tax and Sales Tax Exemption.
The federal solar tax credit/Inflation Reduction Act
The Federal Solar Tax Credit or the Inflation Reduction Act allows you to recover up to 30% of the total cost of your solar energy system until 2032. This credit will decrease to 26% in 2033 and 22% in 2034. Residential solar systems will no longer be eligible for this rebate after the expiration in 2034. You can obtain the Federal ITC as either a tax return or a tax credit that can be applied to your taxes for up to 10 years.
Sustainable building tax credit
An individual may gain up to home square foot if they put in a solar energy system to construct a “green” house. To be qualified for this tax credit, the structure must meet the requirements of the US Green Building Council. Nevertheless, the most energy-efficient solar power systems may need to be installed.
El Paso electric rebates
El Paso Electric customers can get rebates on different electric programs they enroll in, like the residential smart charging program. EPE customers will get a $500 rebate when purchasing a smart level 2 charging for EVs. Meanwhile, a $2,300 rebate can be given to customers with a residential low-income (LI) smart charging program.
Property tax exemption
If you install solar panels on your roof in NM, you won’t have to pay extra on your property taxes. On average, one kW of solar energy adds an estimated six thousand dollars in home value. Fortunately, this home improvement doesn’t impact your property tax bill.
Sales tax exemption
You don’t have to pay the 5.125% sales tax when you purchase Solar Equipment. This solar incentive permits you to save $51.25 per each $1,000 spent on a solar panel system. Therefore, a 10 kW solar system is eligible for a $1,623.04 tax exemption.
The New Mexico Solar Market Development Tax Credit
New Mexico’s Solar Market Development Tax Credit offers up to 10% off the cost of your solar system and provides up to $6,000 in non-refundable tax credits. This solar incentive is available to those who have installed their solar panels on or after March 1st, 2020. But only $8 million is allocated for this purpose every year, so interested individuals should take advantage of this opportunity as soon as possible.
Net metering in New Mexico
In New Mexico, net-metering programs make it possible for homeowners with solar panel systems to send any extra electricity they generate to the electricity grid and then draw it back when their panels don’t create enough power. In essence, the utility functions like a solar energy storage battery. At the end of each month, customers are only responsible for the net energy they use beyond what they produce.
Let DroneQuote answer your solar questions
Reach out to DroneQuote if you have questions about going solar. We are here to answer any questions you may have about solar. And if ever you decide to go solar, we will act as your solar fiduciary and guide you through the entire process – from getting multiple quotes from reliable and reputable sources in New Mexico to picking an installer and supervising the installation. Sign up here and let your questions be answered.