Federal income tax credits will cover 30% of the cost of installing a PV system. The credit covers materials and installation, and there is no maximum amount for this benefit. If the residential tax credit exceeds your tax liability, it may be carried forward until fully used.

A New Mexico state residential tax credit is available to cover an additional 10% of the cost. This credit is capped at $9,000, meaning that it will apply to an investment up to $90,000. This well-crafted tax credit includes consumer protection standards to protect your investment. These include requirements for contractor licensure, permitting, and inspection, and system designs are reviewed by the state's Energy, Minerals and Natural Resources Division for assurance that they meet performance and quality standards.

We will generally prepare the necessary paperwork for you to qualify for the state tax credit. Beside evidence of satisfactory permitting and inspection, we will provide photographs of the system, a record of all invoices and payments, a system design diagram and key component specifications, a detailed, bound Owner's Manual and maintenance guide, and a signed affidavit stating that the system meets the guidelines for qualification for the state tax credit.

Note that substantial upgrades to existing systems are also eligible for both federal and state tax credits. The federal credit simply does not distinguish between full systems and upgrades in its eligibility requirements. The state credit allows an upgrade to qualify if it includes purchase and installation of at least 100 watts of additional PV charging capacity, as well as specific additional provisions. Only new components are eligible for the state credit.

All solar installations in New Mexico are also exempt from Gross Receipts Tax. This exemption includes all equipment, labor, and other costs directly associated with the installation of a PV system. This will save you between 5-8% on the cost of your PV system, depending on your location.

Further information about New Mexico state incentives for renewable energy can be found here.

The actual statute on which the state tax credit is based can be found here.