New Mexico solar rebates and incentives: 2026 guide

Solar panels might seem expensive, but if you live in New Mexico, you're in luck. Your state offers some of the most generous solar incentives in the country, helping thousands of homeowners shrink their upfront costs while locking in decades of lower electricity bills. There are multiple ways to bring down the price of going solar—and start saving sooner than you might think.

Even better? The long-term savings from reduced electricity costs typically outweigh your upfront investment. Here's how to take advantage of New Mexico's solar incentives.

Incentives help bring solar's price tag down considerably in New Mexico. Here are the major ones to know about:

How does New Mexico's solar tax credit work?

New Mexico's New Solar Market Development Tax Credit (NSMDTC) covers 10% of your solar system's equipment, materials, and labor costs, up to $6,000. What makes it especially valuable is that the credit is refundable—if the amount exceeds what you owe in state taxes, the New Mexico Taxation and Revenue Department will send you the difference as a refund.

The program runs on a first-come, first-served basis with a $30 million annual cap, so it’s worth applying soon after installation. You’ll apply through the Energy, Minerals and Natural Resources Department (EMNRD) for a certificate of eligibility within one year of installing your system, then file it with your state tax return. The credit is available for systems installed through 2031.

In addition to the great rebates and incentives above, New Mexico also offers two tax exemptions for solar panel systems. This solar property tax exemption means you don't need to pay a higher property tax for adding solar panels to your house.

If you connect your solar panel system to the grid, you can benefit from net metering, one of the best solar panel incentives available in New Mexico. 

With net metering, you earn credits when you send excess electricity from your solar panels to the grid. When the sun isn't shining and you need to pull electricity from the grid, your utility will apply the credits to your bill. Net metering makes it so you will owe very little, or even nothing, on your electric bills with solar panels. 

Utilities regulated by the New Mexico Public Regulation Commission, including PNM, El Paso Electric, and Xcel Energy, are required to offer net metering for solar panel systems 10 kW or less. Some smaller utilities, like municipal providers, follow their own rules.

If your system produces more electricity than you use in a month, your utility will handle the excess in one of two ways: it’ll either carry the extra kWh forward as credits on future bills, or pay you for it at its avoided cost rate, which is lower than what you pay for electricity. PNM, for example, rolls excess kWh forward from month to month. Check with your utility to see which approach it uses.

No—New Mexico doesn’t offer a standalone battery incentive, but if you install a battery along with your solar panels, its cost can count toward the New Solar Market Development Tax Credit (10% of your costs, up to $6,000 total). Lawmakers have proposed a dedicated battery storage tax credit in several recent sessions, including House Bill 51 in 2025, but none has passed.

While state incentives for storage are limited, installing a solar battery is still a great way to boost your energy independence and keep the lights on during outages.

If you're looking for solar installers in New Mexico, here are some popular suggestions: