Incentives making solar power more attractive
New Mexico Business Weekly - by April ReeseSpecial to the NMBW
With 300 days of sun per year, the Land of Enchantment is the perfect place for a home solar system.
New tax incentives and rising home heating bills are sparking interest among many New Mexicans about how to harness the sun's energy. But solar remains pricey, and going solar is a decision to be made carefully, industry experts say.
A basic grid-tied solar system -- one that is connected to power lines and is the most common type -- consists of solar panels mounted on the roof and an inverter, which converts the DC voltage to AC, the form that powers appliances and electronics.
In many ways, turning a home into a small power plant is more attractive than ever before.
Under the state's solar market development tax credit, approved by the Legislature in March, homeowners and business owners are eligible for a 30 percent tax break on the cost of a solar system -- either thermal or photovoltaic -- up to a maximum of $9,000. There's also a 30 percent federal tax credit for photovoltaic and solar water heating systems, up to $2,000, which went into effect January 1.
Homeowners within the service range of Public Service Co. of New Mexico (PNM) also can take advantage of two incentives offered by the utility. Under PNM's net metering program, homeowners whose solar systems generate more power than the household uses receive a credit for the extra power, which is sent to the grid for use elsewhere. And a new PNM program that started in March pays homeowners 13 cents for every kilowatt hour of solar energy produced through at least 2018.
"There is tremendous interest," says Brian Johnson, solar energy program manager for the energy conservation and management division of the New Mexico Energy, Minerals and Natural Resources Department. "Cost has always been a barrier, but now we're seeing those costs addressed somewhat" with the new incentives, he adds.
The new state tax credit goes into effect July 1. Homeowners need to have their systems certified by the state, largely to prevent false claims -- a problem officials faced with the original solar tax credit in the 1980s, Johnson adds.
"We're anticipating 200 applications within just the half year after it goes into effect -- July through December," he says.
The incentives are part of the state's effort to comply with its "renewable portfolio standard," established by state law in 2004, which calls for the state's investor-owned utilities to increase their use of renewables like solar and wind to 10 percent by 2011.
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