New Mexico Solar Market Report

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New Mexico may be one of the sunniest states in the country, but until very recently, it did not take advantage of its abundant sunshine as a key energy source.

New Mexico enacted the landmark Energy Transition Act (ETA) in March 2019, setting the state’s first RPS goal. The Act mandates all investor-owned-utilities (IOUs) and rural electric cooperatives (co-ops) to procure 100 percent of their electricity from renewable energy by 2050.

The ETA does not have a solar carve out, which means IOUs and co-ops can source their electricity from any renewable energy facility. Nonetheless, it is a huge step towards incentivizing growth in New Mexico’s solar market.

New Mexico does have other policies that are explicitly solar-focused. In March of this year, New Mexico became the 21st state to enact a community solar legislation by passing Senate Bill 84 (SB 84), also known as the Community Solar Act. The bill has authorized 200 MW of community solar capacity to be built over the next three years. The program will officially start procuring projects in 2022.

In addition, in July 2020, New Mexico renewed the New Solar Market Development Income Tax Credit. The goal of the program is to incentivize residential and commercial customers to install solar by providing them with a 10 percent tax credit, with savings up to $6,000. The program has a yearly allotment of $8 million and is on a first-come-first-serve basis.

Additionally, solar incentives from the two largest utilities in the state have made solar economics favorable in New Mexico. Public Service Company of New Mexico (PNM) is the largest investor-owned utility (IOU) in New Mexico and serves electricity to more than half a million residential and commercial customers across the state. PNM’s Solar Energy Program pays customers renewable energy certificates (RECs) generated by a solar energy system at a fixed rate of 0.0025 cents perkWh for all programs. Xcel Energy serves 120,000 customers through its subsidiary in New Mexico, Southwestern Public Service. Xcel’s Solar*Rewards® Program provides monthly or annual payments to customers that own solar energy systems in exchange for RECs.

Xcel and PNM’s production-based incentives for systems between 10 and 1,000 kW have made solar power purchase agreement (PPA) prices favorable in New Mexico. In comparison, the state generally lacks a lot of financial support for solar owners. However, the state’s high solar insolation and relatively high retail and wholesale electricity prices make it much easier for solar to be competitive in the market.

Why market research?

As local markets change dynamically and policies remain difficult to navigate, clean energy organizations are currently forced to choose between the overwhelming flow of free information and high-priced market intelligence subscriptions that are often too expensive for small- and medium-sized firms.

At DG+, we provide succinct information that cuts through the noise and gets to the point. Reports include details on current events, opportunities and challenges, policy summaries, pricing analysis, and market share data.

See what's inside

New Mexico Solar Market Report

Q3 2021
Free Download Below

The DG+ New Mexico Solar Report provides an overview of solar incentives, estimated PPA pricing by project size, and state opportunities and challenges.

Inside This Report

What's included in
this report.

  • Highlights
  • Recent News
  • Opportunities
  • Challenges
  • Policy
  • Enacted Legislation
  • New Mexico Clean Energy Standard by Year
  • State Policy Checklist
  • Market Size
  • New Solar Growth in New Mexico
  • Cumulative Grid-Connected Installed PV Capacity by Year (MW)
  • Solar Industry Jobs by Type, 2019
  • PV Interconnection Applications, 2019 - 2020
  • Utility Briefs
  • Utility Service Territories
  • NM FTM Capacity by Zipcode, Q3 2020 - Q2 2021
  • Pricing Estimates
  • PPA Pricing Methodology
  • Pricing in New Mexico
  • PPA Pricing by Project Size
  • Inputs and Assumptions
  • NM PPA Price Comparison (c/kWh)
  • Market Share
  • Utility Front-of-Meter Market Leaderboard, July 2020 - Present
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