Can community solar finally take off in New Mexico?

New Mexico’s community solar program has struggled to launch since lawmakers established it five years ago. Now, regulators are giving it a makeover to expand access.

The idea behind community solar is to give electric utility customers the savings of a rooftop solar array without actually having to lease, own and install one on their home or small business, making it easier for cash-strapped New Mexicans to go solar. Through the community solar program, New Mexicans can purchase shares or leases of small solar farms, which produce no more than 5 megawatts of power, through a state-approved subscriber organization. In exchange, customers can get a credit on their monthly electric bill for their share in the energy produced from the solar farm, resulting in savings.

A 2021 University of New Mexico study found that a community solar program could generate over half a billion dollars in economic benefits in New Mexico and create 3,760 high-paying jobs over five years.

But five years after Gov. Michelle Lujan Grisham signed New Mexico’s Community Solar Act into law in April 2021, the program’s promises have yet to fully materialize. Of the 47 projects that received a state award to build nearly a collective 200 megawatts of community solar power in May 2023, only 12 of the solar farms totaling 54.73 megawatts are energized, according to Patrick Rodriguez, a Public Regulation Commission spokesperson.

“It’s been a hard grind,” said Jim Desjardins, executive director of the Renewable Energy Industries Association of New Mexico. “The interconnection processes have been slow for a variety of reasons.”

The program has gone through rulemaking as well as a state Supreme Court challenge since its establishment. Getting through the interconnection queue – a lineup of power generation projects waiting for approval to be hooked into the power grid – is no easy process; certain projects may require grid studies and upgrades.

The three-member PRC scheduled hearings on rule changes to the community solar program as it prepares to bid out another 300 megawatts of new projects. The PRC will hold a public comment hearing beginning at 1 p.m. on Wednesday, March 25, at the New Mexico State Capitol, room 309. (Contact the commission at public.comment@prc.nm.gov to participate via Zoom).

Community solar stakeholders — utilities, solar farm developers, advocacy groups — spent the better part of 2025 hashing out new rules for the program. The PRC commissioners — all of whom were appointed by Lujan Grisham — will vote on a bevy of proposals on issues including where community solar farms can be built, who pays to connect them to the grid, how consumers get billed and more.

Under law, 30% of a community solar farm’s output is reserved for low-income residents. New rules under consideration would allow residents to qualify for community solar bill credits if they are enrolled in the following federal programs: The Special Supplemental Nutrition Program for Women, Infants, and Children; Temporary Assistance for Needy Families; the USDA’s Food Distribution Program on Indian Reservations; and tribally administered assistance programs.

Despite the fact that just over a quarter of the program’s initial 200-megawatt capacity is online, renewable energy advocates are urging the commission to act fast on the new rule changes so they can publish requests for proposals on an additional 300 megawatts of projects as soon as possible.

The urgency to publish new bids stems from the fact that President Donald Trump’s One Big Beautiful Bill Act, signed into law July 4, phased out lucrative federal investment tax credits and production tax credits for wind and solar energy projects. Those tax credits now expire Dec. 31, 2027, which means that New Mexico’s community solar projects need to start work fast to capture the incentives.

The Coalition for Community Solar Access, a Washington, D.C., nonprofit, submitted joint comments on the rule changes to the PRC with a number of local organizations, including the Coalition for Sustainable Communities New Mexico, which represents the local governments of Albuquerque, Santa Fe, Las Cruces, Bernalillo County, Santa Fe County, Los Alamos County and Taos County.

“If Commission processes do not align with (investment tax credit) deadlines, projects intended to serve New Mexico customers may be unable to fully monetize federal incentives, reducing or preventing the bill-saving benefits that would otherwise flow to subscribers,” the coalition wrote.

“There’s a need to get these projects up and going, quickly, and comply with the phase-down of the investment tax credit,” agreed Desjardins, of the Renewable Energy Industries Association.

In comments to the commission, the association called on regulators to strengthen local-hiring preferences when the state is selecting solar farm developers. The nonprofit said it does not support revisions to the rules “that dilute the intent of the local preference and local benefits scoring by treating pass-through contracting or proxy arrangements as equivalent to substantive local performance.”

The utilities, in comments to the commission, argued that their customers who do not subscribe to community solar should not have to subsidize upgrades made to the electric grid to accommodate the new generation. PNM, the state’s largest electric utility, took a swipe at the private subscriber organizations that enroll customers in community solar farms. Desjardins likened the subscriber organizations, which are vetted by the state, to property managers.

“... PNM does not find it appropriate that all utility customers should fund upgrades that are driven for the benefit of private, unregulated subscriber organizations,” PNM said in a filing.

Interest in building the farms — from both the world’s largest renewable energy developers such as AES to smaller New Mexico developers — has been strong. In May 2023, a total of 408 projects representing a total of 1.7 gigawatts of power bid into the program — a full 1.5 gigawatts over the program cap.

On March 16, three companies — Pluma Construction, a New Mexico-based renewable energy developer; Forefront Power, a San Francisco-based solar and battery developer; and Standard Solar, a Maryland-based solar asset owner — jointly announced eight new community solar projects across the state, four of which are energized. The new projects are in Las Vegas, Las Cruces, Tularosa, Silver City, Alamogordo and Lordsburg. Two are in Clovis.

“We’re proud to already be serving thousands of New Mexicans who have signed up to be part of these solar farms — families who are now seeing savings on their monthly energy bills thanks to clean power generated right here in their own communities,” Sandhya Murali, chief strategy and marketing officer at Perch Energy and former CEO of Solstice, said in a statement. “With these projects officially online, we’re excited to continue serving even more households in the months ahead. These active projects have enough capacity to enroll approximately 2,500 additional households, with more on the horizon.”

Justin Horwath covers tech and energy for the Journal. You can reach him at jhorwath@abqjournal.com.