Property Tax Exemption for Residential Solar Systems

March 24, 2023


Residential solar energy systems are exempted from property tax assessments in New Mexico in most circumstances. For the purposes of determining property taxes, the value of a property cannot increase by the greater of 3% of the previous year's assessment or 6.1% of the assessment from two years ago according to state law. An assessment may exceed these restrictions, however, if physical improvements are made to the property. Under H.B. 233, enacted in 2010, residential solar systems will not be treated as physical improvements and therefore will not increase the value of the property for property tax purposes. Future assessments, however, can include the value of a solar energy system if the property is sold.

A solar energy system is defined as a system that provides space heat, water heat, or electricity to the property. The term specifically does not include windows, dark-colored water tanks, or non-vented trombe walls.

Program Overview

Implementing Sector: State
Category: Financial Incentive
State: New Mexico
Incentive Type: Property Tax Incentive
Web Site:
Administrator: New Mexico Energy, Minerals and Natural Resources Department
Start Date: 01/01/2010
Eligible Renewable/Other Technologies:
  • Solar Water Heat
  • Solar Space Heat
  • Solar Photovoltaics
Incentive Amount: Approximately 100%
Maximum Incentive: None specified
Eligible System Size: None specified
Equipment Requirements: Must be an "installation that is used to provide space heat, hot water or electricity to the property in which it is installed and is: (1) an installation that uses solar panels that are not also windows; (2) a dark-colored water tank exposed to sunlight; or (3) a non-vented trombe wall."


Name: N.M. Stat. § 7-36-21.2
Date Enacted: 3/3/2010
Effective Date: 1/1/2010


Name: Erica Velarde
Organization: NM Energy, Minerals and Natural Resources
Address: 1220 South St. Francis Drive
Santa Fe NM 87505
Phone: (505) 476-3313

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.