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New Mexico

An arrow graphic shows that New Mexico's renewable portfolio standard increases from 15% in 2015 to 20% in 2020 for investor-owned utilities, and from 6% in 2016 to 10% in 2020 for rural electric cooperatives.

Carve-out: 4% must come from solar energy for IOUs
Tracking system: Western Renewable Energy Generation (WREGIS)

New Mexico requires investor-owned utilities (IOUs) to have a 20% renewable portfolio standard (RPS) requirement with a 4% solar carve-out and 0.6% carve-out for distributed resources, by 2020. Rural electric co-ops have a 10% RPS requirement by 2020. Net-metering regulations allow customers with solar systems below 80 MW to be compensated for net excess generation and do not have a statewide cap. Less stringent interconnection processes exist for systems up to 2 MW.

Net Metering

Net metering rules developed by the New Mexico Public Regulation Commission (NMPRC) apply to the state's IOUs and electric cooperatives. These require utilities to compensate customers with net-metered systems below 80 MW. This compensation can be provided by crediting the customer account or paying the customer for the net excess generation supplied to the utility. Any remaining credits can be carried over indefinitely and are paid to the customer at the end of his term.

The state law requires utilities to bill net-metered customers in accordance with rate structures which would be implemented on them if they were not interconnected. Customers are compensated at the utility's single period of time-of-use energy rate. The utility energy rates are required to reflect the cost savings from avoiding the transmission, distribution, and transformation loss for different voltage levels.

Municipal utilities not governed by NMPRC rules can make their own net-metering programs. Farmington Electric, a municipal utility, offers net metering to residential customers in accordance with NMPRC rules. However, it is limited only to systems up to 10 kW.

System size limit: 80 MW

Aggregate cap: Not specified

Credit: Net excess generation is credited at avoided cost rate or excess kWh generated are credited to the account and rolled over indefinitely.

RECs: Customer-generator retains the renewable energy certificate (REC).

Meter aggregation: Not addressed for solar power


Interconnection standards are applicable to IOUs and rural electric co-ops in New Mexico. Interconnection processes are dependent on system size (see below). Standards require compliance of all systems with local, state, and national electrical and utility codes and standards, including NEC, IEEE, and UL standards. A reasonable interconnection fee dependent on system size is applicable for interconnected systems.

Eligible Systems Type of Interconnection
≤10 kW Simplified process
>10kW and <2 MW Fast track process
>2MW and ≤10 MW Eligible for full interconnection study
>10 MW Follow case specific study process

System size limit: 80 MW

Liability insurance: Not required for systems up to 250 kW unless ordered by NMPRC. A utility may require liability insurance within reason for systems above 250 kW.

External disconnect switch: Not required for inverter-based systems up to 10 kW. For systems above 10 kW, requirement is dependent on utility discretion.

Third Party Ownership

Third party ownership of solar systems is limited to systems generating 120% of the average annual electricity consumption of the host at the site.

Community Solar

A bill was introduced in the Nevada Senate in 2013 to provide for community solar facilities to qualify as distributed generation facilities. However, there has not been any progress after its introduction. For more information on local community solar programs please contact local utilities and service providers.

State Incentive Programs

Program Administrator Incentive
Solar Market Development Tax Credit New Mexico Energy, Minerals and Natural Resources Department, Taxation and Revenue Department (NMEMNRD) The tax credit pays up to 10% of the purchase and installation costs or a maximum of $9,000 for solar PV and hot water systems that are operational after January 1, 2009. The portion of the tax credit that remains unused can be carried forward for a maximum of ten consecutive years. As of August 2016, the program for PV systems has closed, as the 2016 allotment of tax credits has been reached.
Advanced Energy Gross Receipts Tax Deduction and Advanced Energy Compensating Tax Deduction New Mexico Taxation and Revenue Department (NMTRD) The revenue from sales and leases of a qualified generating facility (solar PV or thermal electric generating facilities of 1 MW or more that began construction on or after July 1, 2010 but no later than December 31, 2015) are deductible from the gross receipts tax amount. This amount can also be deducted while calculating the compensating tax.

The maximum combined benefit allowed from approved advanced energy tax credits (advanced energy tax credits for personal and business use expired on 12/31/2015), advanced energy gross receipts tax deductions, and advanced energy compensating tax deductions for a "qualified generating facility" is not allowed to exceed $60,000,000. These deductions are available for a 10-year period for purchases and 25-year period for leases. This is calculated starting from the year development of the facility begins and expenditures are made or until the maximum combined benefit has been used.
Property Tax Exemption for Solar Systems New Mexico Energy, Minerals and Natural Resources Department (NMEMNRD) Rooftop-scale solar energy systems are exempted from calculation of the property tax when installed until the property is sold. When the property is sold the solar improvements can be included while assessing the property tax. Solar energy systems are defined as systems providing space heat, hot water, or electricity to the property. The solar panels used in this system cannot be a window, a dark‐colored water tank exposed to the sunlight, or a non‐vented Trombe wall.
Renewable Energy Tax Credit New Mexico Energy, Minerals and Natural Resources Department (NMEMNRD) Tax credit is provided for up to 10 years to personal or corporate income tax obtained from revenues generated by a solar PV or thermal electric generation facility, which started operation on or before January 1, 2018. Tax incentive offered varies annually:
  • Year 1: $0.015 per kWh
  • Year 2: $0.02 per kWh
  • Year 3: $0.025 per kWh
  • Year 4: $0.03 per kWh
  • Year 5: $0.035 per kWh
  • Year 6: $0.04 per kWh
  • Year 7: $0.035 per kWh
  • Year 8: $0.03 per kWh
  • Year 9: $0.025 per kWh
  • Year 10: $0.02 per kWh
A solar generating facility is eligible for tax credits for the first 200,000 MWh annually. The program (for personal and corporate tax credit) has a cap of providing tax credits for 2,000,000 MWh (for generating facilities including solar, wind, and biomass) and an additional 500,000 MWh for solar facilities only.

Utility Incentive Programs

PNM and El Paso Electric offer a rebate to small, medium, and large customers. Excel Energy has discontinued its solar rewards program in New Mexico for residential and commercial customers. Please check program websites for current availability and status.

Utility Incentive Limitations
PNM Performance-Based Solar PV Program $0.025/kWh for systems >1 kW to 10 kW
$0.025/kWh for systems >10 kW to 100 kW
$0.02/kWh for systems >100 kW to 1 MW
8-year contract (currently not accepting applications)
8-year contract (currently not accepting applications)
Contracts terminate on December 31, 2020 (accepting applications—2,000kW available as of August 2016).
El Paso Electric Company Renewable Energy Certificate Purchase Program $0.02/kWh for systems <10 kW
$0.02/kWh for systems 10 kW to 100 kW
Prevailing market price (will not exceed price for 10-kW to 100-kW systems) for systems 100 kW to 1 MW
$0.02/kWh for systems <10 kW
$0.02/kWh for systems 10 kW to 100 kW
Prevailing market price


The list below provides some resources for each type of policy or program. Please reference and contact relevant authorities and local utilities for the most up-to-date and accurate information on state and utility policies and incentive programs.

Renewable Portfolio Standard

Net metering and interconnection

Programs and incentives