Is solar worth it in New Mexico?
For a typical New Mexico home in 2026, solar is a close call: about a 12.9-year payback and $15,021 saved over 25 years after paying for the system. Check your own home, because roofs, usage and utilities vary a lot.
- Payback, typical home
- 12.9 yrs4.3 kW, paying cash
- Electricity price
- 15.3¢per kWh, U.S. 18.0¢
- Solar production
- 1,782kWh per kW per year
- Exports credited at
- ~26%Varies by utility
The numbers for a typical New Mexico home
| Electricity use | 646 kWh a month (New Mexico average) |
|---|---|
| Best-value system | 4.3 kW, producing 7,664 kWh a year (99% of use) |
| Price | $13,820 at about $2.90/W |
| First-year savings | $1,099 |
| Payback | 12.9 years |
| 25-year net | $15,021 (6.3% a year return) |
| Rate increase assumed | 1.8% a year, from New Mexico's 2015–2025 history |
Paying cash, no federal credit, 5% discount rate, microinverters, $25 per kW a year for maintenance and repairs. Methodology.
Why it comes out this way
- Electricity costs 15.3¢ per kWh, close to the U.S. average of 18.0¢.
- Exported solar is typically credited at about 26% of retail, so systems pay best when sized for what you use yourself.
- A typical system here produces about 1,782 kWh per kW per year (ranked #1 of 51).
- There is no federal tax credit for homeowners who buy in 2026, which adds several years to payback compared with 2025.
Net metering and export rules in New Mexico
Varies by utility. For systems up to 10 kW, New Mexico utilities either carry forward excess kWh credits or pay for them at avoided cost; most small residential systems effectively get retail offset for self-use and monthly netting. Larger systems get avoided cost for excess.
Monthly net excess either carried as kWh credit (PNM small PV) or paid at avoided cost; utility's choice under 17.9.571 NMAC.
- Netting: monthly
- Unused credits: kWh credits carry forward month to month; paid at avoided cost on account closure / per utility rules.
- System size limit: 80000 kW
- Fixed charges: Standard customer charges.
- Last major change: 17.9.571 NMAC; Community Solar Act 2021.
Read net metering explained to see why export rules can swing payback by years.
| Utility | Export credit | Notes |
|---|---|---|
| PNM | ~100% of retail | Small PV (<=10 kW): cumulative kWh credit carried forward; >10 kW paid monthly at Rate 12. |
| El Paso Electric (NM) | Varies by utility | Avoided cost or carryforward. |
| Southwestern Public Service (Xcel NM) | Varies by utility | Avoided cost or carryforward. |
Solar incentives in New Mexico
The federal 30% Residential Clean Energy Credit ended for systems installed after December 31, 2025. What that means.
| Program | Type | What you get | Status |
|---|---|---|---|
| New Solar Market Development Tax Credit | tax credit | 10% of system cost up to $6,000; refundable, annual statewide cap ($30M); available for taxable years before 2032 (per statute/bill text). Eligibility: NM taxpayers, residential/business systems; apply to EMNRD | active |
| Property tax exemption | property tax exemption | Residential solar systems exempt from property tax. Eligibility: Residential | active |
| Gross receipts tax deduction | sales tax exemption | Sale and installation of solar systems deductible from gross receipts tax. Eligibility: Residential/commercial | active |
What solar costs in New Mexico
A fair cash price is around $2.90 per watt before incentives. For the 4.3 kW system that fits a typical home, expect roughly $10,600 to $15,000; smaller systems cost more per watt.
Public installation records (LBNL Tracking the Sun and state data, 4,407 owned systems since 2024) show a median of $4.38/W, with the middle half between $3.80 and $5.28. These prices include loan dealer fees, which is why cash quotes are often lower.
How many homes have solar
- Homes with net-metered solar (2025)
- 64,532
- Share of homes
- 6.9%
- Residential solar capacity
- 353 MW
- Growth over the past year
- +4.7%
- New systems with a battery
- 9%
- New systems leased or PPA
- 0%
Sources: EIA-861 (2025), EIA small-scale solar estimates, LBNL Tracking the Sun and state interconnection data.
Electric utilities in New Mexico
| Utility | Homes served | Price (2026 est.) | Typical use | Typical-home verdict |
|---|---|---|---|---|
| Public Service Co of NM | 496,914 | 16.9¢ | 555 kWh/mo | Worth it |
| Xcel Energy (Southwestern Public Service) | 101,203 | 14.1¢ | 948 kWh/mo | Close call |
| El Paso Electric | 97,258 | 13.5¢ | 693 kWh/mo | Worth it |
| City of Farmington | 36,031 | 13.4¢ | 651 kWh/mo | Close call |
| Jemez Mountains Electric Cooperative | 28,185 | 16.3¢ | 570 kWh/mo | Worth it |
| Kit Carson Electric Cooperative | 26,286 | 16.2¢ | 495 kWh/mo | Close call |
| Continental Divide El Cooperative | 20,474 | 17.4¢ | 592 kWh/mo | Worth it |
| Central New Mexico El Cooperative | 19,323 | 17.9¢ | 580 kWh/mo | Worth it |
| Otero County Electric Cooperative | 16,517 | 20.2¢ | 560 kWh/mo | Worth it |
| Farmers Electric Cooperative | 10,310 | 14.1¢ | 819 kWh/mo | Close call |
| Navajo Tribal Utility Authority | 9,768 | 16.6¢ | 501 kWh/mo | Close call |
| Los Alamos County | 8,395 | 15.3¢ | 630 kWh/mo | Close call |
| Lea County Electric Cooperative | 7,292 | 11.3¢ | 1,111 kWh/mo | Close call |
| Central Valley Electric Cooperative | 6,167 | 10.1¢ | 1,149 kWh/mo | Not worth it |
| Navopache Electric Cooperative | 1,500 | 13.7¢ | 594 kWh/mo | Not worth it |
| Rio Grande Electric Cooperative | 232 | 19.0¢ | 911 kWh/mo | Worth it |
| Tri-County Electric Cooperative, Inc (OK) | 7 | 16.6¢ | 700 kWh/mo | Worth it |
Solar by city in New Mexico
- Albuquerque11.5-yr payback · Worth it
- Las Cruces14.1-yr payback · Close call
- Rio Rancho11.4-yr payback · Worth it
- Santa Fe11.5-yr payback · Worth it
- Roswell10.3-yr payback · Worth it
- Farmington14.9-yr payback · Close call
- Hobbs13-yr payback · Close call
- Clovis13-yr payback · Close call
- South Valley11.6-yr payback · Worth it
- Carlsbad19.5-yr payback · Not worth it
- Alamogordo10.4-yr payback · Worth it
Protect yourself when buying
- Check the license. NM Construction Industries Division license (electrical EE-98 or PV specialty classification). Look up an installer
- Cancellation rights. Federal law gives you 3 business days to cancel most door-to-door sales over $25. How to cancel
- HOA and solar access. Yes - Solar Rights Act (NMSA 47-3) voids covenants restricting solar.
- Community solar. Yes - Community Solar Act (2021), program operating in IOU territories.
Installers active in New Mexico
Ranked by installations in public records, not by payment. Volume isn't quality: always check licenses and reviews.
- Positive Energy 4,041 installs
- Affordable Solar 2,835 installs
- Solar Works Energy 2,292 installs
- ADT Solar (SunPro) 1,583 installs · exited residential
- Our World Energy 1,341 installs
- Nm Solar Group 1,038 installs
- Sunspot Solar Energy 996 installs
- ION Solar 870 installs
- Titan Solar Power 604 installs · bankrupt
- Nrg Renewables 565 installs
- Freedom Forever 465 installs · bankrupt
- Solcius 460 installs
- Solar Smart Living 403 installs
- Sunstate Solar 362 installs
- Poulin Design Remodeling 322 installs
Questions about solar in New Mexico
Is solar worth it in New Mexico in 2026?
For a typical New Mexico home, solar is a close call. A 4.3 kW system costing about $13,820 after state incentives saves about $1,099 in the first year and pays back in about 12.9 years. Your result depends on your roof, usage, utility and price, so run the calculator for your address.
How much do solar panels cost in New Mexico?
A reasonable cash price is around $2.90 per watt before incentives, or roughly $10,600 to $15,000 for a 4.3 kW system. Public installation records for New Mexico show a recent median of $4.38/W, which often includes loan dealer fees.
Does New Mexico have net metering?
For systems up to 10 kW, New Mexico utilities either carry forward excess kWh credits or pay for them at avoided cost; most small residential systems effectively get retail offset for self-use and monthly netting. Larger systems get avoided cost for excess.
Is there a solar tax credit in New Mexico?
The 30% federal credit for homeowners ended for systems installed after 2025. New Mexico offers: New Solar Market Development Tax Credit. Solar may be exempt from property tax.
How do I check a solar installer's license in New Mexico?
NM Construction Industries Division license (electrical EE-98 or PV specialty classification).. Look up any installer with the state's license search at https://www.rld.nm.gov/construction-industries/.
Policy research current as of October 2026; sources include srca.nm.gov, pnm.com, energybot.com. Electricity data: EIA, through July 2026. Found something out of date? Tell us.