New Mexico solar panels: The complete guide in 2025
Data updated May 20, 2025
Looking to go solar in New Mexico? On average, you'll need to install a 9.18 kW solar panel system to cover your electric bill—which costs about $18,756 after the federal tax credit.
Cost for an average system in New Mexico
| Out of pocket cost, cash | $26,794 |
| Federal tax credit (30%) | - $8,038 |
| Price post tax credit | $18,756 |
| 25-year savings | Payback period | Electricity offset |
|---|---|---|
| $31,738 | 10 Years | 104% |
As long as your federal tax bill is high enough, you can take advantage of the federal investment tax credit (ITC).
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Going solar in New Mexcio
The Land of Enchantment’s sunny skies and solid net metering programs make it a natural fit for solar panels.
Factor in the federal solar tax credit and New Mexicans can cut the cost of solar panels by thousands of dollars, speeding up their payback period and increasing the value of their investment.
Here's our guide to going solar in New Mexico.
Cost
How much do solar panels cost in New Mexico?
Solar panels will save you a lot of money over time, but the upfront costs aren't cheap. The average New Mexico homeowner needs a 9.18 kW solar panel system to cover their electricity needs, which comes out to $26,794 before incentives. Prices range from $22,775 to $30,813, but after the federal tax credit, that drops by 30%.
While this may sound high, it will pay off in New Mexico. That's why over 8,300 New Mexico homeowners have used EnergySage to receive and compare quotes for solar installations. You can expect to earn back your initial solar investment through electricity savings in about 10.26 years, while most systems last at least 25 years. You'll often see this number referenced as your solar payback period.
Solar panel systems are expensive upfront purchases, but there are a few different financing options to make that initial cost more manageable.
Cash purchase: You pay for your entire system upfront. This provides the best long-term savings.
Solar loan: Enables you to maintain ownership of your system while owing little to no money upfront. When it comes to solar loans, subsidized clean energy loans through local incentive programs are usually your best bet. The next best options include a home equity loan or a personal loan—private solar loans typically come with higher interest rates or upfront fees.
Solar lease or power purchase agreement (PPA): A third-party company owns your system and either leases you the solar panels (solar lease) or allows you to purchase the electricity they generate (PPA). In general, these provide the lowest savings and garner the most negative press about solar. If you go this route, remember to read the fine print so you’re not trapped in a contract for longer than you intend.
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Incentives
What are the best solar rebates and incentives in New Mexico?
Incentives help bring solar's price tag down considerably in New Mexico. Here are the major ones to know about:
| Incentive | Average savings in New Mexico | Description |
|---|---|---|
Residential Clean Energy Tax Credit, formerly the federal investment tax credit (ITC) | $8,038 | Lowers your solar panel system's cost by 30% |
Solar Market Development Tax Credit | Up to $6,000 | Lowers your solar panel system’s cost by 10%, up to $6,000 |
Sustainable Building Tax Credit (SBTC) | Varies based on square footage and the level of certification achieved | Tax credit earned for sustainable building efforts |
New Mexico solar property tax exemption | 0.74% of your system’s cost, annually on average | If you use solar energy as a source of power, you won't need to pay for the value your solar panels add to your property. |
Is net metering available in New Mexico?
If you live in a state with a net metering program, you can earn credits for the excess generation your solar panel system produces and delivers back to the grid. It’s essentially a solar buyback program that makes it so you owe little to nothing on your electric bills.
Regulated utilities in New Mexico are required to offer net metering, and their rates are pretty good. You’ll be credited at the retail rate of electricity for every kWh you contribute to the grid until your generation is equal to your utility demand. If you send more electricity to the grid than you demand from it, you’ll be credited at the avoided cost rate for that excess generation.
Learn more about net metering in New Mexico or specific utility programs:
Equipment
Equipment quality
Solar panels continue to get more efficient, meaning they produce more power per square foot. In 2025, the most popular solar panels can produce about 450 watts of electricity in full sunlight—you’ll want panels with at least that much power output to get the most out of your installation.
It’s also important to choose a solar inverter setup that works for your roof’s layout.
And if you plan to install a solar battery, pick one that can easily integrate with that inverter.
While premium equipment can result in sticker shock, it typically saves you more money in the in the long run: The highest-quality panels degrade at a slower rate and maintain more of their power output for longer, and the best warranty terms often guarantee up to 40 years of coverage in case you need repairs or replacements.
Companies
Who are the best solar installers in New Mexico?
We pre-screen all of the solar companies on EnergySage to ensure they'll provide you with a high-quality installation. We then rate them based on their results, reputation, and responsiveness. Here are the highest-rated EnergySage installers in New Mexico:
Ready to start looking for a solar installer?
Here are some of the most popular ones near you:
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resources
Top solar resources for New Mexico
- New Mexico Solar Loan Providers
Search through our list of top loan providers to finance your solar panel system.
- New Mexico Energy, Mineral, and Natural Resources Department
Learn about the NM Energy Conservation and Management Division from the state government.
- NM Public Regulation Commission
Read more about how utility companies work in NM.
- New Mexico Electricity Profile (EIA)
Learn about NM energy production and prices.
- NM State Solar Factsheet (SEIA)
See quick stats about how much solar energy has grown in NM.
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