New Mexico is a land of sunshine. On average, New Mexico gets 280 sunny days per year, compared to the 205 days in the United States generally. This has meant a great climate for people, livestock and agriculture for millennia, and now we’re able to harness the sun for the electricity that is the lifeblood of our modern world.
But it’s not just New Mexico’s weather that makes it such a great place for solar power. There are many New Mexico solar incentives that make it a great economic decision, saving you money in addition to helping the environment. Government programs and tax incentives are in place to encourage both individuals and businesses to use solar more extensively and can save you money both on installation and in long-term costs. It’s possible to recoup as much as 50% of the costs of installation in the first year alone.
Some of the New Mexico solar incentive programs include:
Federal Solar Tax Incentives
There are two federal tax incentives available to New Mexico commercial solar projects. The first is the Federal Investment Tax Credit (ITC) which was begun in 2005. In that time, it has contributed to a nationwide increase of 10,000% in solar output. In 2015, the program was extended by congress. The credit is uncapped and credits back 26% of the total solar system cost. There still is time to qualify for the 2020 26% credit, as this program is based on a “construction commenced” timeframe, rather than when the construction is completed, so you have up through the end of December to begin your solar project.
The second of the commercial solar incentives is the Modified Accelerated Cost Recovery System (MACRS), which is a depreciation plan to help commercial properties recoup their solar investments through tax deductions. As of 2018, the MACRS benefits can all be taken in the first year or 100% Bonus Deprication.
If the ITC and the MACRS credits are taken together, they can pay back approximately 50% of the solar project costs in the first year.
New Mexico Solar Market Development Tax Credit
The New Mexico Solar Market Development Tax Credit, also known as the New Mexico Solar Tax Credit, was passed in 2020 by the New Mexico Legislature as another option for commercial solar incentives for LLC’s. The bill provides up a 10% tax credit with a value of up to $6,000 for solar energy systems. The catch with this bill is that there is a tax credit fund of only $8 million, and the money is first-come, first-serve. So if you act now, you can get your full 10% but once the $8 million runs out, that’s the end of the program.
Sustainable Building Tax Credit
This tax credit is to encourage private sector design and construction of sustainable buildings for commercial and residential use. The commercial solar incentives tax credit is based on third-party validation of the building’s level of sustainability. Before applying for a Sustainable Building Tax Credit for a commercial building, you must first file an SBTC request. This should be done as early as possible, but not before the project has been registered with the U.S. Green Building Council.
As you can see, there is no better time to get into solar power for your New Mexico commercial business. Not only are the credits available now, but, as with the Federal Solar Tax Incentives, the longer you wait, the less you’ll be able to save. The time to act to take advantage of these great programs is now.