Solar Energy Overview New Mexico has so many high-quality solar energy production sites that if we developed them all, we would produce more electricity than is used in the entire United States. Solar energy is more coincident with peak electricity demand than wind, and with solar thermal technologies, storage can be used to extend electricity production into the evening. The main barrier to solar energy today is cost. A new generation of large solar plants is being built across the southwest, which is expected to bring costs down. CONCENTRATING SOLAR POWER (CSP) Large-scale concentrated solar plants that use mirrors to focus the sun’s heat and make steam that can power a turbine generator. Lower cost than Photo Voltaic (10 to 15 cents per kWh), thermal storage is possible. PHOTOVOLTAIC (PV) PANELS Used for rooftop systems for homes and commercial building. Typical cost of a home system is approximately $20,000.

Solar Tax Incentives/Incentive Programs

Solar Market Development Tax Credit for Home owners and Small Business The New Mexico Solar Market Development Tax Credit, or Solar Tax Credit (STC), works with the federal solar tax credit to pay up to 30% of your solar photovoltaic (PV) or solar thermal system. You can receive up to $2,000 in a federal tax credit and up to $9,000 in a state tax credit for your solar system. The STC was established in 2006 to help you invest in clean energy for your home or business. 

Download and complete the Solar System Installation Form, the second page of which is a help list to assist you in providing a complete application package. You will need to provide information about yourself, the contractor (if contractor-installed), and a building code authority system inspection.

Send the above forms to the State of New Mexico – Energy, Minerals, and Natural Resources Department (EMNRD) (address on the forms). Upon approval, EMNRD will send you a letter certifying the system and approving you for the tax credit. When you file your New Mexico State Income Tax return, fill out and attach form RPD-41317, Solar Market Development Income Tax Claim Form, along with the certification letter, to your income tax return.

New Mexico's STC benefits homeowners, businesses and agricultural entities that install PV or solar heating systems. Up to $5 million in state government tax credit support is available annually through 2015. Since its inception in 2006, more than $7 million has been invested in solar installations. Of that, $1.4 million in state solar credits was used to leverage $570,000 in federal tax credits. 178 solar PV systems producing 453 kilowatts and 127 solar heating systems generating 12.4 million British Thermal Units (BTUs) per day have been installed.

Federal Solar Tax Credits Expire December 31, 2008

For Additional information on how to apply and forms available please visit EMNRD (New Mexico Energy, Minerals and Natural Resources Department) at http://www.emnrd.state.nm.us/ECMD/CleanEnergyTaxIncentives
/solartaxcredit.htm

 

If you contract for the installation of a Solar System the installer should provide you with all the forms and information needed for interconnection with a public utility's distribution system.

Renewable Energy Production Tax Credit

Senate Bill 463 amends the existing renewable energy production credit in the corporate income tax act and includes the credit in the income tax act. The existing credit of one cent per kilowatt hour (kWh) of electricity produced by renewable energy sources is limited to wind and biomass energy sources while a new more expansive credit is allowed for electricity produced by solar energy sources. The solar credit is a staged credit as follows:
Table 1: Phase-in of solar credit
Year of Production                 Credit per kWh
1                                              0.015$
2                                              0.020$
3                                              0.025$
4                                              0.030$
5                                              0.035$
6                                              0.040$
7                                              0.035$
8                                              0.030$
9                                              0.025$
10                                            0.020$

The solar credit is allowed for the first 200,000 megawatt hours (mWh) and for only ten years of qualified electricity generation. Senate Bill 463 also expands the definition of biomass to match the definition used for the gross receipts tax and lowers the size of electric generating plant to 1 megawatt (MW) from the current 10 MW. The bill sets the total eligible electricity generated by all plants at 2 million mWh plus an additional 500 thousand mWh for solar power. The Energy Minerals and Natural Resources Department (EMNRD) must approve the credit before the Taxation and Revenue Department (TRD) will accept it.

For credits awarded prior to October 1, 2007, there is a five year carry-forward if the credit amount exceeds the tax liability. Credits awarded on or after October 1, 2007, are refundable to the taxpayers meaning the excess above the tax liability is refunded.

The solar credit can only be used for generators that have produced electricity prior to 2018, effectively placing a sunset on the credit. There is also a requirement that EMNRD report to an interim committee annually on the effectiveness of the credit. The report shall include the identity of qualified generators, the means of production, the amount of energy produced and whether there were applications that could not be approved due to program limits.
The effective date is January 1, 2008.

For more information on Senate Bill 463 please visit http://legis.state.nm.us/Sessions/07%20Regular/bills/senate/SB0463.html

Solar Energy System Gross Receipts – “Clean Coal”

Senate Bill 994 creates the advanced energy tax credit, which may be claimed by a taxpayer who holds an interest in a new solar thermal electric generating facility or new or repowered coal electric generating facility that begins construction before December 31, 2015. The credit will be available for the state portion of gross receipts tax, the compensating tax, or the withholding tax.
Credits in excess of tax liability may be carried forward for up to five years.

The amount of the advanced energy tax credit will be up to 6 percent of the plant’s expenditures for development and construction, including permitting, site characterization and assessment, engineering, design, CO2 capture, treatment, compression, transportation and sequestration, site and equipment acquisition, and fuel supply development. The maximum credit claimed per generating facility will be limited to $60 million

For more information on Senate Bill 994 please visit http://legis.state.nm.us/Sessions/07%20Regular/bills/senate/SB0994.pdf

 

If you contract for the installation of a Solar System the installer should provide you with all the forms and information needed for interconnection with a public utility's distribution system.