Solar House New Mexico

Solar power generation in the U.S. is on the rise with an added 7.3 gigawatts (GW) of total installed capacity in 2015. Demand for solar is projected to increase as much as 119% in 2016. Some believe that growth in the U.S. solar market is primarily influenced by federal and state subsidies and tax credits, such as the Solar Investment Tax Credit (ITC). The ITC is a 30% federal tax credit for residential and commercial solar projects available through 2019. Until recently, state incentives have also impacted the growing U.S. solar market. Nationwide, states have started rolling back tax credits for rooftop solar. Of the 16 states offering residential and small business tax incentives, half have already allowed their tax credits to expire. Other remaining state programs are expected to expire within the next two years.

New Mexico is among these states that may drop its 10% Solar Market Development Tax Credit. Since 2009, New Mexico has invested nearly a quarter billion dollars in solar projects throughout the state. Supporters of the solar tax credit such as State Representative Sarah Maestas Barnes (R) and State Senator Mimi Stewart (D), argue that the solar industry proved the value of return on this investment, which included the addition of 1,900 solar jobs and $191 million invested in residential solar programs.

Subsidy opponents believe New Mexico cannot afford, for budget constraint reasons, to extend the $3 million dollar annual tax credit program. These opponents also believe that the tax credits are unnecessary to maintain growth in the solar industry; for example, State Representative Jim Townsend (R) has argued that the credit only benefits homeowners who can afford to invest in solar and creates upward pressure on prices for all other electric utility customers. Finally, opponents also point to the continuing federal ITC that will still support solar industry growth.

Feature Photo by Michal Klajban – Licensed under CC BY-SA 3.0 via Wikimedia Commons