Is Solar Worth It in New Mexico in 2026?
Complete analysis of solar costs, incentives, net metering, and payback for New Mexico homeowners — without the federal ITC.
Cost Per Watt
$2.90
installed
Electricity Rate
$0.123
per kWh
Payback (No ITC)
16.8 yr
current reality
Payback (With 30% ITC)
11.7 yr
hypothetical
25-Year ROI
49%
return on investment
Incentive Breakdown — New Mexico
Available incentives for a typical 7kW residential solar system in New Mexico
Federal ITC (25D)
ExpiredThe federal solar Investment Tax Credit expired on January 1, 2026. No federal credit available for new installations.
State Tax Credit
$2,030New Mexico offers a state income tax credit of 10% of system cost, up to $6,000 for residential solar.
SREC Market
Not AvailableNew Mexico does not have a traditional SREC market.
Property Tax Exemption
Solar system value excluded from property tax assessment
Sales Tax Exemption
No statewide sales tax exemption for solar
Key Incentives: State tax credit worth $2,030; Property tax exemption for solar.
Solar Math — With vs Without Federal ITC
Cost breakdown for a typical 7kW residential system in New Mexico
2026 Reality (No Federal ITC)
- System Size
- 7 kW
- Cost per Watt
- $2.90/W
- Gross Cost
- $20,300
- Federal ITC
- $0
- Net Cost
- $20,300
- Annual Savings
- $1,210/yr
- Payback Period
- 16.8 years
Hypothetical (With 30% ITC)
- System Size
- 7 kW
- Cost per Watt
- $2.90/W
- Gross Cost
- $20,300
- Federal ITC (30%)
- -$6,090
- Net Cost
- $14,210
- Annual Savings
- $1,210/yr
- Payback Period
- 11.7 years
Impact: Without the federal ITC, New Mexico homeowners face a 5.1-year longer payback period — paying $6,090 more out of pocket.
Net Metering Policy — New Mexico
How New Mexico compensates your excess solar production
Full retail rate net metering — you earn the same rate you pay for electricity. Best case for solar savings.
New Mexico mandates net metering at full retail rate for systems up to 80 MW under PRC rules.
Cost Per Watt Benchmark — New Mexico
New Mexico Average
$2.90/W
National Average
$3.05/W
Typical 7kW System
$20,300
New Mexico's average installed cost is below the national average of $3.05/W
Breakeven Timeline
Without the federal ITC, a typical 7kW system in New Mexico breaks even in 16.8 years. With the former 30% ITC, payback would drop to 11.7 years.
Without Federal ITC
16.8
years to break even
With Former 30% ITC
11.7
years to break even
Production Details
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