2024 Solar Incentives Guide for Farmington, NM - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Farmington.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2024 and beyond)
- Ways to optimize your solar investment
Solar installers are experts in maximizing your solar tax credits and rebates.
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What Solar Tax Credits, Incentives, and Rebates are Available in Farmington?
Property Tax Exemption for Residential Solar Systems
Solar Energy Gross Receipts Tax Deduction
Geothermal Heat Pump Tax Credit (Personal)
Geothermal Heat Pump Tax Credit (Corporate)
Local Option - Renewable Energy Financing District/Solar Energy Improvement Special Assessments
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
The phrase "solar incentives" refers to a wide range of financial incentives implemented to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. You may be eligible for different types of incentives, including cash back, discounts or monthly utility bill credits, depending on your situation. Some incentives come from your specific utility company, county or municipality, some from the New Mexico government and others from the federal government. Some solar incentives you might qualify for are:
- Net Metering: Net metering becomes relevant once your solar system is up and running. If you have a net metering agreement with your Farmington utility company, the company will subtract the value of the excess energy your solar system produces from your utility bill each month. In some locations, this is a dollar-for-dollar credit, while in other places you may get refunded a percentage of the value.
- Rebates: Rebates, or cash back after a purchase, are normally applied prior to any solar tax credits being calculated. Solar rebates might be offered by your local utility company, by your state or by your county.
- Tax Credits: Unlike tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government.
- Tax Exemptions: These can come in the form of property tax exemptions, which let you exclude the value of your solar system when paying property tax on your home. You could also look for exemptions on sales tax at the time of purchase.
Best for Leasing
Sunrun
- Expansive service area
- Many financing options
- Some reported issues with customer service
- Some reported issues with door-to-door sales
Best Social Impact
Palmetto Solar
- Expansive service area
- Makes charitable contributions
- Certified B Corp
- No leases or PPAs
- Quality of installation may vary by location
Best Technology
Tesla Energy
- Price-match guarantee
- Sleek, efficient, and durable solar panels
- Best solar battery on the market
- Some reported issues with customer service
- Customer service varies by local dealer
Federal Solar Incentives
Federal incentives are the kind of incentives that you are most likely to have heard of. It's likely that you've heard of the Federal Solar Investment Tax Credit, or ITC. The ITC is a tax credit that reduces your taxes by a certain percentage of the money you spend installing solar panels.
The ITC applies to solar systems installed after January 1, 2006, on a primary or secondary residence that you own in the United States. Initially, the credit applied to 30% of the total cost – for panels, labor, accessories and equipment – although it may range from 26-30%, depending on when your solar system was installed. There is no cap on the claim amount.
Contacting your local Farmington solar panel installation expert is the best way to understand how the ITC could apply to your situation.
The ITC was both renewed and expanded by the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. For solar system installations that begin after January 1, 2022, and are completed by the end of 2032, homeowners can apply for a credit equal to 30% of the total cost. This percentage will decrease annually after 2032 until the Clean Energy Credit expires in 2035. Starting in 2023, the expansion to the program will also make credits for energy storage systems even easier to claim.
More information about the new Inflation Reduction Act can be found here. The best way to fully understand how the new Clean Energy Credit will apply to you is to speak with your local Farmington solar panel installation expert directly.
State & Local Solar Incentives
Some solar incentives are often also provided by state and local governments. As with federal incentives, these may include tax credits, rebates and more. These incentives — which might be provided by your county or municipality, or by the state of New Mexico — might be offered for only a limited time, or on an ongoing basis.
Next Steps for Installing Solar in Farmington
Solar incentives might be provided by your local utility company, the federal government or the New Mexico government. The variety of available incentives has helped nationwide use of solar energy increase greatly in the last 15 years. We recommend talking to your local Farmington solar installer for more information about these incentives and to ensure that you're getting the largest number possible for your solar system.
EcoWatch's Farmington, NM Solar Incentives FAQs
How much can I save annually on my electric bill if I install solar panels on my Farmington home?
Generally, Farmington homeowners who install solar panels save about $1,026.70 per year, or about $19,507.33 over 20 years after they make the switch.
I want to trade in my old appliances for ones that are more energy-efficient. Are there any incentives I can get?
Under the new Inflation Reduction Act, there are a number of new financial incentives that are available when you make eco-friendly improvements to your home. More details on these incentives, including information about incentives for purchasing new appliances, can be found here.
Can I apply for incentives both towards the up-front cost of solar panels, and later as reimbursement?
The order your incentives will be applied in may vary depending on which incentives you are claiming but usually yes, you can receive multiple types of incentives for your solar project. Get in touch with your solar installer or a local tax professional to confirm you are claiming all possible incentives and applying them in the correct order.
Can I use both solar and another type of renewable energy to power my home?
You can use multiple types of renewable energy, or a combination of renewable and non-renewable energy, to power your home. Be sure to discuss your ideas with your local Farmington solar installation expert. They can help you with the plan for your project and give you an understanding of various incentives that you may or may not qualify for.
Our goal is to reach as many people as we can with sensible solutions like solar energy. Our team of full-time local researchers collects solar price and installation data for every city in America then compiles it to create these digestible city guides. If you want to read our solar expert's opinion on the top solar companies featured here, follow this link.
Solar incentive research was conducted by Melissa Smith and Karsten Neumeister. Local data analysis was conducted by James Savino. See something we missed or could do better? Email the editor.