Solar Market Development Tax Credit
New Mexico state income tax credit for residential solar, administered by the ECMD. Claimed on your state return rather than deducted at purchase.
Program detailsNew Mexico home energy costs & incentives
One of the few states where a solar buyer still gets a tax credit at all — which matters a great deal more now the federal one has gone.
Prices pulled August 16, 2026
What energy costs here
15.08¢
per kWh, residential electricity
13% below the national average of 17.3¢. 30th most expensive of 51.
Up 12% since 2021 (2.8% a year), against 27% nationally.
$0.95
per therm, residential natural gas
$9.83 per thousand cubic feet, 2025 annual. National average $1.48/therm.
Up 1% since 2021 (0.2% a year).
Heat pump vs. gas furnace — Close call
New Mexico's electricity-to-gas price ratio works out at 4.7-to-1. At these prices the two land near each other on running cost, which puts the decision on installation cost, whether your AC also needs replacing, and how cold your winters get.
Below roughly 3.5-to-1 a heat pump usually wins on running cost; above roughly 5-to-1 a furnace may be cheaper through winter. How that comparison works · run it with these rates
State averages from the U.S. Energy Information Administration (electricity, gas), pulled 2026-08-16. Real bills vary substantially by utility within a state, and by rate plan within a utility — check a recent bill for your own numbers before relying on any of this. The heat pump verdict above follows from these averages, so it moves if your rates differ.
What's different in New Mexico
New Mexico's Energy Conservation and Management Division, the state's designated energy office, administers the Solar Market Development Tax Credit. With the federal 25D credit ended for systems installed after 2025, a live state credit puts New Mexico in a small group where solar still carries a tax incentive.
Understand the mechanics before you budget: a tax credit is claimed on your state return, not deducted from the installer's invoice. You pay the full price up front and recover part of it at tax time, which is a cash-flow question as much as a cost one — and it is worth nothing if you have no state tax liability to offset. Ask a tax professional how it applies to you specifically.
State credit programs of this kind are commonly capped and can close when the cap is reached, so confirm the current status and any remaining allocation before you sign rather than after.
Check with the administrator before you sign anything. Program budgets run out, terms change without notice, and most require approval before work starts — a rebate you apply for afterwards is usually a rebate you don't get. Treat this page as a starting point for your own call, not as confirmation that you qualify. We last checked these programs on August 16, 2026.
New Mexico programs
The federal position — the same everywhere
- Residential Clean Energy Credit (Section 25D)Ended
Ended. No credit for expenditures made after 31 December 2025.
- Energy Efficient Home Improvement Credit (Section 25C)Ended
Ended. No credit for property placed in service after 31 December 2025.
Full detail, sources and changelog on the national incentive tracker.
Where to check for your address
- New Mexico ECMD — State Energy Office
- CLEAN.ENERGY.nm.gov
- DSIRE — search state, local and utility programs by ZIP
- ENERGY STAR Rebate Finder
- U.S. DOE — Home Energy Rebates, by state
Your own utility is worth checking separately — utility rebates are often the largest remaining incentive and rarely appear in any central listing.
Not tax advice
Everything here is general information gathered from public sources. It is not tax, financial or engineering advice, and it cannot account for your utility, your income, your equipment or your return. Energy prices are state averages that move; program terms and budgets change without notice. Confirm anything you plan to budget around directly with the program administrator, your utility and a licensed professional before you commit money.
If you find something on this page that is out of date, tell us at minchangyi@me.com and we will correct it.
Run the numbers for your house
These open with New Mexico's average rates already filled in. Correct them from a recent bill before you rely on the result — state averages hide a lot of variation between utilities.
Guides behind these numbers
- Heat Pump vs. Gas Furnace: The Real 2026 Cost ComparisonUpfront cost, operating cost, and total cost of ownership for heat pumps vs. gas furnaces in 2026 — with the trade-offs most guides skip.HVAC · 6 min read
- The Gas-to-Heat-Pump Rebate Is Gone. The Electric-to-Heat-Pump One Isn't.DOE Program Notice 26-2 removed fuel switching from the HEAR rebates. Here's exactly what changed, who is still eligible, and what to do if your project is already underway.HVAC · 6 min read
- How to Tell If Your HVAC System Is Properly Sized (Manual J Explained)An oversized or undersized HVAC system wastes money and comfort. Here's what proper sizing means and how to know if yours is right.HVAC · 4 min read
- Insulation vs. HVAC Upgrades: Which Should You Prioritize First?Before spending on a new HVAC system, it's often smarter to fix your home's envelope first. Here's how to decide the right order.HVAC · 3 min read
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