Albuquerque averages 310 days of sunshine. Consider how to use that sunshine for solar energy.
The Office of Energy Efficiency and Renewable Energy provides an online Homeowner’s Guide to the Federal Tax Credit for Solar Photovoltaics. It is available in English and Spanish.
While there is a disclaimer that it provides an overview and should not be your only source in making a decision, it is a good start.
Federal Tax Credit
The federal residential solar energy credit is a tax credit that can be claimed on federal income taxes for a percentage of the cost of a solar photovoltaic (PV) system. The system must be in service during the tax year and generate electricity for a home located in the United States. In December 2020, Congress passed an extension of the ITC, which provides a 26% tax credit for systems installed in 2020-22 and 22% for systems installed in 2023. There is no maximum amount that can be claimed. The Build Back Better Act includes an extension of the solar tax credit.
What expenses are included for calculating the tax credit?
• Solar PV panels or PV cells used to power an attic fan, but not the fan itself.
• Contractor labor costs for onsite preparation, assembly or original installation, including permitting fees, inspection costs and developer fees.
• Balance-of-system equipment, including wiring, inverters and mounting equipment.
• Energy storage devices that are charged exclusively by the associated solar PV panels, even if the storage is placed in service in a subsequent tax year to when the solar energy system is installed. However, the energy storage devices are still subject to the installation date requirements.
• Sales taxes on eligible expenses.
What expenses are NOT included for calculating the tax credit?
• If you finance the system, interest owed on the financing, origination fees and extended warranty expenses are not eligible for the tax credit.
We are accustomed to seeing solar panels on rooftops, but they are not required to be installed on a rooftop as long as they generate electricity for your residence. Check zoning and building code requirements.
N.M. Tax Credit
According to the Energy, Minerals and Natural Resources Department (EMNRD), the Solar Market Development Tax Credit provides a tax credit of 10% for small solar systems, including on-grid and off-grid PV systems and solar thermal systems. The tax credit runs through December 31, 2027. There is a cap of $8 million in tax credits to be issued every year on a first-come, first-served basis. A check on their dashboard shows a total credit amount approved so far in 2021 of $4,266,127. Additional program information is on the EMNRD website. Assistance in understanding the tax credits and other programs may be available from the contractor you consider for your solar system.
PNM programs
The price PNM will pay you for renewable energy certificates, called “RECs,” generated by your solar energy system is .0025¢ (1/4 cent) per kilowatt hour for all programs and is set by the PRC.
PNM Interconnection involves installing your own electricity generation on your home or commercial building. You can benefit from net metering when a qualified system is installed and connected to the PNM power grid. This means that, since your system is producing energy, you buy electricity from PNM only when you have used more energy than your system produces in each billing period. See the PNM website for more information on solar and wind programs.
According to the Renewable Energy Industries Association of New Mexico, PNM has 18 distribution lines at capacity and cannot add additional solar systems to those lines. The PRC docket 21-00266-UT is reviewing this and newer technologies in solar systems.
Job Training
CNM offers a Solar Electric Certificate of Achievement. According to its catalog, the certificate provides students the opportunity to gain the knowledge and technical skills needed to enter and explore careers in the field of Solar Electric (Photovoltaic-PV). Students receive an overview of residential, commercial, large commercial and industrial systems. Students learn how solar electricity is created and how to achieve the best production. There is an emphasis on code-compliant design, installation, commissioning, operation and maintenance practices. The certificate program can be completed as a standalone or as part of the Electrical Trades programs. The CNM website provides information on top jobs, salaries, openings and projected growth.
Jobs
According to the Solar Career Map, jobs in the solar industry include manufacturing, systems design, project development, installation and operations. The Solar Energy Industries Association reports that New Mexico has 1,880 solar jobs, as measured through the third quarter of 2021.
An internet search will provide you with resources, from evaluating a contractor, placement of solar panels, calculating payback of your investment, and future growth and technology.
Sources: www.energy.gov/eere/solar/homeowners-guide-federal-tax-credit-solar-photovoltaics; www.emnrd.nm.gov/ecmd/tax-incentives/solar-market-development-tax-credit-smdtc/ ; www.pnm.com/interconnection-process; www.cnm.edu/programs-of-study/programs-a-z/electrical-trades; www.seia.org/state-solar-policy/new-mexico-solar; www.reia-nm.org
