Alternative Energy Product Manufacturers Tax Credit

July 18, 2021


The Alternative Energy Product Manufacturers tax credit may be claimed for manufacturing alternative energy products and components, including renewable energy systems, fuel cell systems, and electric and hybrid-electric vehicles. Alternative energy components include parts, assembly of parts, materials, ingredients, or supplies that are incorporated directly into end-use products. In 2011 S.B. 233 added "products extracted from or secreted by a single cell photosynthetic organism" to the list of eligible alternative energy products.

Tax Credit

The total amount of the credit is approved by the Taxation and Revenue Department and is not to exceed 5% of the taxpayer’s qualified expenditures. A qualified expenditure is the purchase of manufacturing equipment made after July 1, 2006.


To be eligible to claim a credit, the taxpayer must employ at least one new full-time employee for every $500,000 of expenditures up to $30,000,000, and at least one new full-time employee for every $1,000,000 of expenditures over $30,000,000. 

Carry Over

The alternative energy product manufacturers tax credit may only be deducted from the taxpayer's modified combined tax liability, which is the total liability for the reporting period for the gross receipts, compensating tax, and withholding tax. Any portion of the alternative energy product manufacturers tax credit that remains unused at the end of the taxpayer's reporting period may be carried forward for 5 years. 

Program Overview

Implementing Sector: State
Category: Financial Incentive
State: New Mexico
Incentive Type: Industry Recruitment/Support
Web Site:
Administrator: New Mexico Energy, Minerals and Natural Resources Department
Start Date:
Eligible Renewable/Other Technologies:
  • Geothermal Electric
  • Solar Thermal Electric
  • Solar Photovoltaics
  • Wind (All)
  • Biomass
  • Municipal Solid Waste
  • Fuel Cells using Non-Renewable Fuels
  • Landfill Gas
  • Wind (Small)
  • Anaerobic Digestion
  • Fuel Cells using Renewable Fuels
Incentive Amount: Determined by New Mexico Department of Taxation and Revenue
Maximum Incentive: 5% of taxpayer's qualified expenditures
Terms: 5-year tax credit carryover


Name: N.M. Stat. § 7-9J-1 et seq.
Date Enacted: 4/3/2007, subsequently amended
Effective Date: 7/1/2006


Name: Louise Martinez
Organization: New Mexico Energy, Minerals and Natural Resou
Address: 1220 S. St. Francis Drive
Santa Fe NM 87505
Phone: (505) 476-3310

This information is sourced from DSIRE; the most comprehensive source of information on incentives and policies that support renewables and energy efficiency in the United States. Established in 1995, DSIRE is operated by the N.C. Clean Energy Technology Center at N.C. State University.