Cost of electricity in New Mexico

Updated 6/25/2022

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On average, electricity users in New Mexico spend about $134 per month on electricity. That adds up to $1,608 per year.

That’s 16% lower than the national average electric bill of $1,919. The average electricity rates in New Mexico cost 15 ¢/kilowatt-hour (kWh), so that means that the average electricity customer in New Mexico is using 902 kWh of electricity per month, and 10,824 kWh over the course of the year.

Cost of electricity in New Mexico

How much can you save on electric bills with solar in New Mexico?

Solar saves you money by reducing or eliminating your monthly electricity bill. The amount that you can save with solar in New Mexico is based on two factors: how much you spend on electricity now and how much of your electricity bill you can offset with solar.

Based on the intensity and amount of sunlight hours in New Mexico, the average electricity customer in New Mexico will need a 5.9 kilowatt (kW) solar panel system to offset 100% of their annual electricity consumption of 10,824 kWh per year. On the EnergySage Marketplace, solar shoppers in New Mexico pay an average of $20,000 for a 5.9 kW solar panel system prior to incentives.

The savings from offsetting 100% of an electricity bill with solar can add up fast! Assuming an 2.4% annual increase in electricity prices, someone in New Mexico can expect to save $1,600 in their first year, $8,400 over five years, $17,900 over 10 years, and $40,600 over 20 years on electricity bills.

How much can you save by going solar in New Mexico?

Electricity bills in New Mexico

factors that make up a total electricity bill

Monthly electricity bills are a product of how much electricity you use per month and the rate you pay for electricity. In New Mexico, the average monthly electricity bill for residential consumers is $134/month, which is calculated by multiplying the average monthly consumption by the average rate for electricity: 902 kWh * 15 ¢/kWh.

Electricity bills are designed to cover all of the costs of producing the electricity that you use, of running and maintaining the electrical grid, and of any public benefit funds that promote things like clean energy and energy efficiency. These costs are rolled into both fixed charges (i.e., monthly customer chargers) and variable charges (i.e., ¢/kWh that you use). While fixed charges will remain the same from month to month, the portion of variable charges on your bill each month will change based on how much electricity you use. As a result, there are two ways to reduce your bills: by either using less electricity or by reducing the cost of electricity, by installing solar for instance.

Electric rates in New Mexico

The easiest way to compare the cost of electricity from one region to another is to look at the electricity rate. Residential rates in the U.S. range from 6 ¢/kWh to 42 ¢/kWh depending upon where you live, what types of power plants provide your electricity, and when during the day or year you’re consuming electricity.

The average residential electricity rate in New Mexico is 15 ¢/kWh, which is 3% lower than the national average rate of 15 ¢/kWh.

How solar helps you save on electric bills

Solar panel systems help you save money by reducing your monthly electricity bills. Although a $50 or $100 electricity bill might not seem like much when you pay it each month, those bills add up quickly over ten, twenty or even thirty years: if you pay $100 per month in electricity now, you’ll pay over $52,000 on electricity over the next thirty years!

EXISTING BILL	10 YEAR COST	20 YEAR COST	30 YEAR COST
$50	$6,700	$15,000	$26,000
$100	$13,000	$30,000	$52,000
$150	$20,000	$46,000	$78,000
$200	$27,000	$61,000	$100,000
$250	$33,000	$76,000	$130,000

Assuming a 2.4% annual increase based on inflation and average annual rate increases.

Installing solar allows you to reduce or even eliminate your electricity bill: when you pay upfront for solar panels, you are effectively paying today for the electricity you’ll use over the next 25 or even 30 years. Calculating your savings from investing in solar is as simple as subtracting the amount you pay for solar from what you would have paid for electricity otherwise.

EnergySage can help you go solar and save!

We know electricity bills add up over time, and going solar is a great way to save money while helping the environment. When you sign up on the EnergySage Marketplace, you'll be able to receive and compare solar quotes side-by-side from qualified solar installers in your area. We're here to help along the way - talk with one of our Energy Advisors to learn more about your unique quotes, any local solar incentives you may be eligible for, or any other questions about saving on electric bills with solar.

Frequently asked questions about electricity rates and solar

What's the typical payback period for a solar system?

In 2022, the average solar payback period is about 8.7 years – this is the point in time at which your solar investment will start to earn you money.

Will I still have an electricity bill with solar?

In most cases, you will still have an electric bill with solar. Even if your solar system offsets 100 percent of your electricity use, as long as your property remains grid-connected, your utility will still send you a bill. However, it’s possible that your bill will be $0 or even negative if you provide more electricity to the grid than you pull (depending on the incentives available in your location).

Will a solar loan be less than my electricity bill?

In most cases, your monthly payment towards your solar loan will be less than your electricity bill – this means that if you install a solar system with a $0-down loan, you can start saving immediately! However, you’ll still pay more over the lifetime of your system with a solar loan compared to an upfront cash payment due to the interest that accrues.

What are fixed and variable electricity rates?

If you live in an area with retail energy providers (REPs), you may choose to switch from your standard electricity utility to a REP. There are two main options for REP contracts: fixed and variable rates. If you choose a fixed price plan, you’ll pay a fixed price per kWh that will remain throughout the duration of your contract. On the other hand, if you choose a variable rate plan, the rate you pay for energy will fluctuate based on the wholesale price of electricity, which represents how much power plants charge energy providers to buy the electricity they produce.

How do demand charges work?

If you’re on a demand charge electric rate, your electric bill will be based on the maximum amount of power you use over a single time period (like an hour or fifteen minute period) in a given month. You’ll still be billed for your monthly consumption, but the rate you owe for consumption will be low compared to a typical electric bill; thus, the best way to reduce the amount you owe each month is to decrease the amount of electricity you use all at once – like by installing a solar or solar-plus-storage system.

What are time-of-use electric rates?

Time-of-use electricity rates are designed to incentivize you to use less electricity when the cost of generating electricity is high. Time-of-use rates follow a set schedule, charging you more for your electricity consumption when the cost of generation and demand for electricity are high (i.e., the afternoon of a hot summer day) and less when both of these are low (i.e., in the middle of the night). You can save money by being thoughtful about when you’re running certain appliances or by installing a solar battery to reduce the amount of electricity you pull from the grid when rates are high.

How do solar batteries help avoid surge electricity rates?

When your solar panels are producing more electricity than you’re consuming, you can use that excess energy to charge your solar battery. Now let’s say you need to consume more electricity than your panels are able to produce when electricity rates are surging – with a solar battery, you can choose to use the energy you’ve stored rather than pull from the grid, protecting you from surge rates.

See the cost of electricity in NM counties

EnergySage spans New Mexico! Check out electricity prices in your county

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Updated 10/2016

Updated 01/2022