Is solar worth it in New Mexico in 2026?

How New Mexico pays for your solar power

Net metering at the retail rate. PNM credits surplus from rooftop systems of 10 kW-AC or less as kWh that roll over month to month and never expire; New Mexico also offers a 10% state income tax credit (up to $6,000).

In the calculator, 40% of your solar output is used at home at the retail price and the rest is exported at about 100% of retail, so each solar kWh is worth 100% of the retail price on average. Change it if your utility pays more or less. Method

State or utility incentive	What it is worth
New Solar Market Development Income Tax Credit	Up to 10% of purchase and installation cost, max $6,000 per taxpayer per year

How exports are credited

New Mexico’s net metering rule is a Public Regulation Commission (PRC) regulation, 17.9.570 NMAC. Section 14 covers customer-sited systems of up to 10 kW. The utility bills the customer under the rate and monthly charges the customer would have had without solar. If the home uses more than the system produces in a billing period, the customer pays for the net energy. If the system produces more than the home uses, the excess is credited on the next bill.

The rule lets the utility pick one of two ways to credit the excess: pay or credit it at the utility’s energy rate, or credit the net kilowatt-hours. Unused credits carry forward from month to month.

PNM, the largest utility, uses the kilowatt-hour method. PNM’s Small PV Program, for inverters of 10 kW-AC or less, credits net overproduction as a kWh credit on the next month’s bill. PNM says these credits never expire, so summer surplus can offset high winter or air-conditioning bills later. When an account closes, PNM pays out remaining credits at its Rate 12.

Larger systems are treated differently. PNM’s Large PV Program, for more than 10 kW-AC, pays net overproduction at Rate 12 each month, applied to the same bill. That is a wholesale-style rate, not the retail rate. Most homes fit under the 10 kW line, so the kWh-credit method applies to them.

PNM publishes the Rate 12 price in its tariff. Customers of other utilities, including cooperatives and municipal utilities, should check their own tariff, because the utility chooses between the two crediting methods.

State incentives in 2026

• New Solar Market Development Income Tax Credit: up to 10% of the purchase and installation cost of a certified solar system, capped at $6,000 per taxpayer per taxable year. You must own the home, apply to the Energy, Minerals and Natural Resources Department (EMNRD) within 12 months after the calendar year of installation, and claim the credit on your state return. The rule allows claims for taxable years before January 1, 2032.

The state certifies at most $30,000,000 of credits per calendar year, in order of application. Once that total is reached, later applications for that year are returned. Whether the 2026 allocation is still open could not be confirmed. A 2026 bill to raise the credit to 30% and $15,000 (SB 55) is listed as dead, so the 10% and $6,000 figures still apply.

Property tax and gross receipts tax treatment of residential solar is not listed here because its current status was not confirmed from a statute.

The federal residential credit ended for systems installed after December 31, 2025 (see /federal-solar-tax-credit-ended/).

What it means for payback

Because PNM credits surplus as kilowatt-hours that never expire, each exported kilowatt-hour offsets a later one at the rate that applies on the bill. Sizing a system to cover the full year’s usage works better here than in a state with a low export rate. Summer production above monthly use is stored as credit for later months instead of being sold cheaply.

The 10 kW-AC line matters. A system above that size moves from banked kWh credits to monthly payments at Rate 12. If your usage is high enough to tempt you to go larger, compare the extra output to that lower payment. See /how-we-calculate-solar-payback/ for how the calculator treats exports.

With a kWh bank, a battery adds less than in net billing states, since the grid already works as the storage. Backup power is the main reason to add one (/are-solar-batteries-worth-it/).

Other rules worth knowing

• Customers pay the monthly charges of their regular rate. Net metering offsets energy use, not fixed charges.
• A customer on a time-of-use rate, or any rate that needs costlier metering, pays the added incremental metering cost, and the utility must tell the customer of metering costs within ten days of notice.
• Interconnection for systems up to 10 MW follows 17.9.568 NMAC.
• When a customer leaves a utility that credits kWh, remaining credits are paid out at the utility’s energy rate.
• Ask your utility, co-op or municipal provider for its own net metering terms if you are not a PNM customer.

Berkeley Lab does not publish a New Mexico median from enough systems, so the calculator starts from the U.S. median of $3.60/W. Put your own quote in.