Solar Market Development Tax Credit

September 27, 2018


Note: The deadline for qualifying for this tax incentive was 12/31/2016. This summary is here for informational purposes only.

New Mexico provides a 10% personal income tax credit (up to $9,000) for individuals, sole proprietorship businesses (or one that is required or allowed to elect to file taxes using IRS Form 1040), and agricultural enterprises who purchase and install certified photovoltaic (PV) and solar thermal systems. Eligible systems include grid-tied commercial PV systems, off-grid and grid-tied residential PV systems, and (active) solar hot water or hot air systems. To be eligible, systems must first be certified by the New Mexico Energy, Minerals and Natural Resources Department. Note that solar pool or hot tub heaters are not eligible for this tax credit. A taxpayer who installs a PV system and a solar thermal system may be eligible to receive a separate tax credit up to $9,000 for each system.

Credits may be carried forward for a maximum of 10 taxable years until fully expended. Aggregate credit levels are capped annually at $2,000,000 for solar thermal and $3,000,000 for PV systems.

These tax credits are set to expire December 31, 2016. 

All relevant forms are available at the website listed above.


Program Overview

Implementing Sector: State
Category: Financial Incentive
State: New Mexico
Incentive Type: Personal Tax Credit
Web Site:
Administrator: New Mexico Energy, Minerals and Natural Resources Department, Taxation and Revenue Department
Start Date: 01/01/2009
Eligible Renewable/Other Technologies:
  • Solar Water Heat
  • Solar Photovoltaics
Incentive Amount: 10% of purchase and installation costs
Maximum Incentive: $9,000
Eligible System Size: PV: Minimum 100 W (DC)
Solar Thermal: Minimum collector area of 15 square feet
Solar Water Heat: At least 50% of the total water heating load must be provided by solar energy
Equipment Requirements: Must comply with requirements established in 3.3.28 NMAC (see below); includes requirement for solar water heaters to be SRCC-certified or in the certification process.
Carryover Provisions: Maximum 10-year carryover


This program has 2 incentives
Technologies: Solar Water Heat
Sectors: Residential, Agricultural
Parameters: The incentive is 10.00 %, The incentive has a minimum of $9000.00
Technologies: Solar Photovoltaics
Sectors: Residential, Agricultural
Parameters: The incentive is 10.00 %, The incentive has a minimum of $9000.00


Name: NM Stat. § 7-2-18.14
Date Enacted: 03/06/2006
Effective Date: 01/01/2006
Expiration Date: 12/31/2016
Name: 3.3.28 NMAC (Solar System Certification Requirements)
Effective Date: 07/01/2006


Name: Mark Gaiser
Organization: Energy Conservation and Management Division
Address: 1220 South St. Francis Drive
Santa Fe NM 87505
Phone: (505) 476-3318

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.