ALBUQUERQUE – More than $31 million – that’s how much New Mexico homeowners and businesses spent on solar panels and solar heating systems in 2015 as part of an incentive program offered by the state.
All the data has yet to be entered, but that’s the preliminary number crunched by the state energy conservation division that oversees a key tax credit that has bolstered the solar industry over the last decade.
Since the tax credit is set to expire at the end of 2016, a bipartisan contingent of New Mexico lawmakers will be pushing legislation this next session to extend the program for another eight years.
Rep. Sarah Maestas Barnes, an Albuquerque Republican, says the tax credit amounts to a relatively modest investment when considering the return.
“There is one thing that New Mexicans across the state agree on and it is the need for sustainable, long-term employment,” she said in a statement. “New Mexico’s solar industry touts 98 companies and 1,600 jobs, which are supported in no small part by New Mexico’s smart, targeted tax policy.”
Albuquerque Democrat Mimi Stewart is backing the bill in the Senate. She says New Mexico needs to make it easier to install solar heat and electric systems to benefit the environment as well as create more jobs within the renewable energy industry.
“These jobs are homegrown and cannot be outsourced,” Stewart said.
The credit currently benefits homeowners, businesses and agricultural entities by paying as much as 10 percent – up to $9,000 – of a solar photovoltaic or solar thermal system.
While the proposal calls for extending the tax credit through 2024, the amount would be incrementally reduced starting in 2019.
A similar measure to extend the credit through 2020 failed during the regular legislative session in 2015.
Some analysts and budget experts have voiced concerns about various tax credits, exemptions and other incentives because they cut into state revenue.
The New Mexico Taxation and Revenue Department also suggested last year that the solar market is maturing, possibly to the point where the subsidy will no longer be necessary.
Without the credit, industry officials say thousands of projects might not otherwise have been built.
New Mexico is one of more than three dozen states that offer some of kind of credit or exemption for installing solar electric or solar heating systems.
Nationally, more than 600,000 homes and businesses had installed on-site solar panels through the end of 2014, according to the Solar Energy Industries Association. The residential market alone has grown by more than 50 percent annually for the last three years and it’s on track to do the same this year.
With its endless potential, New Mexico has seen its residential solar capacity grow in recent years.
Between 2008 and 2014, state officials say more than $140 million was invested by owners in solar panels, nearly $29 million was spent on labor to install the systems and nearly $14 million in tax credits were issued.
New Mexico met its $3 million cap under the solar development tax credit program in 2015, clearing the way for more than 1,050 solar photovoltaic systems to be installed. State officials say by the time all the applications are entered into the system and the credits paid, the investment by owners and labor costs will have surpassed 2014’s numbers.