New York — The New Mexico legislature passed a bill February 19 that will provide an income tax credit for residences, businesses and agricultural enterprises that buy, install and own solar thermal or photovoltaic systems. The bill now heads to the desk of New Mexico Gov. Michelle Lujan Grisham, who applauded the bill's passage and has signed other pro-renewables legislation in the past year.
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Known as Senate Bill 29, the legislation will allow eligible taxpayers to receive income tax credits for 10% of the purchase and installation costs of those solar systems, with an annual cap of $6,000. Taxpayers seeking to claim the credit will need to apply for an eligibility certificate from the New Mexico Energy, Minerals and Natural Resources Department. The tax credit will expire January 1, 2028.
Similar solar tax credit legislation known as House Bill 295 was passed in 2006, but that tax benefit expired at the end of 2015. The new legislation was sponsored by state Rep. Matthew McQueen and state Senate Majority Whip Mimi Stewart, who celebrated the victory on Twitter but noted that the process of reinstating the credit took six years.
Stewart also co-sponsored separate legislation that directs the New Mexico Energy, Minerals and Natural Resources Department to develop a grid modernization road map. House Bill 233, which was passed by the legislature Feb. 18, also instructs the department to develop a competitive grant program that would support eligible grid modernization projects proposed by public entities such as county governments, state universities and Native American tribes.
"By reinstating the solar tax credit, we're making sure New Mexicans have an easier path to installing solar on their homes [and] businesses, saving consumers money [and] reducing our carbon footprint," tweeted Lujan Grisham on Feb. 19 after the tax credit bill passed.
Although fossil fuel production is thriving in New Mexico — the state ranks third and ninth, respectively, in terms of crude oil and natural gas production, according to the U.S. Energy Information Administration — the southwestern state was one of the first to adopt a 100% clean power law. When Gov. Lujan Grisham signed the Energy Transition Act into law on March 22, 2019, New Mexico joined Hawaii and California to become the third state to target complete decarbonization of its power system.