- Do you own your house?
- Do you pay thousands of dollars in federal and state income taxes?
- Do you have roof space?
- Are you thinking of replacing your roof?
- Do you have an electric car?
- Are you thinking of purchasing an electric vehicle?
- Be more efficient using LEDs and CFLs
- Know your yearly electricity consumption
- Determine the approximate size of the solar system and number of solar panels you will need
- Understand your the solar investment
First, Cut Out the Energy Hogs
Think about all the places in your home where you can reduce your electricity consumption, and consider cost effective and easy energy efficiency improvements: Turn off unused lights, unplug unused appliances, unplug your electronics, and cut out your energy hogs in your home (mostly older appliances and TVs).Switch to LEDs and CFLs
Use swamp coolers instead of air conditioners
Insulate your home better
Switch to Energy Star appliances
Think of replacing your old fridge(s), as well as any other appliance (oven, water heater, etc.), and make sure to switch to highly efficient (ENERGY STAR) appliances. Old fridges are the #1 appliance hog. Often, people have another (older) fridge in their garage, which could be an even bigger hog than the main fridge.Financial Incentives: You Think you Can't Afford Solar? Think Again!
1. Every homeowner in New Mexico who pays thousands of dollars in income taxes can install solar panels on their roofs at a very reasonable cost even for the middle-income households until the tax credits expire:
- 30% Tax Credit from the Federal Government (until end of 2019, and will drop to 20% until end of 2020, and 10% to stay permanently at 10% after 2022);
2. Solar electric (Photovoltaic – “PV”) systems are about 60% less expensive than they were just 5-6 years ago, have dropped by >100 times since 1977, and are getting cheaper every year.

Lawrence Berkeley national Laboratory produces a yearly report - Tracking the Sun - tracking the installed price of residential and non-residential photovoltaic systems in the United States. Their latest conclusion is that installed costs of solar continue to drop at ~8% rate a year, as recently as 2015.
For the last 4 years' reports, click on the associated year: 2016, 2015, 2014, 2013.
For NM related numbers, visit: www.emnrd.state.nm.us/ECMD/RenewableEnergy/solar.html.
Since prices could continue to drop at ~8%, you may think you can wait. But by waiting, you miss the possible 5%-8% return on investment (depending on the size of the system) - and if you wait too long, you will also miss the federal tax credits which reduce the project's cost by 30%.
4. But keep in mind:
The solar system has to be up and running (i.e. producing electricity) by Dec. 2016 for you to claim the 2016 tax credits. The system installation usually takes between 3 and 4 months for most installers in NM (depending on possible delays with PNM screening, with materials or with inspections), so get started NOW!
Finding out your electricity consumption in kWh
On your electric utility bill (e.g. PNM bill), you will see displayed your electricity consumption for the last 14 months.Determine your approximate system size in kW
Refine and understand the variables in your system
Now that you have a better idea of your system size, you can refine and understand the variables in your system, Go to NREL (pvwatts.nrel.gov/pvwatts.php) for a handy PV calculator, which will yield more detailed information about the production of your system.- First, enter your home address (and pick the closest solar resource data to your house).
- Then click on the large ORANGE ARROW on the right hand side.
- Next, you can chose your system size (2.97 kW), panel type (Standard, Premium or Thin Film), a fixed roof mount (most likely), the system loss (use 14%, or use the calculator), the tilt (some providers will tell you to use 30°, but if your system is ballasted on your roof, 10° is safer to not catch the wind), the azimuth angle (180° is facing South).
- Then click the large ORANGE ARROW on the right hand side. This will display the average expected solar radiation received at your location, the expected Energy production per month and the value of that energy (based on local average rates). You will see the total yearly calculated value here will be different then our original estimate above.
Tilt | 10° | 15° |
Thin Film | 5,148 kW | 5,300 kW |
Premium | 5,069 kW | 5,214 kW |
Standard | 4,968 kW | 5,110 kW |
Playing with the various entries can help you maximize your investment for your needs.
How many solar panels can you expect to need?
How Much can you Expect to Pay for your System?
You’re immune to future electric utility rate increases
How long does it take to pay off my investment?
kWh | June/July/Aug ($/kWh) | Other Months ($/kWh) |
0-450 | 0.0906237 | 0.0906237 |
450-900 | 0.1373455 | 0.1185101 |
900+ | 0.157696 | 0.128352 |
Before Tax Credits | After 30% Federal Tax Credits |
|
1 kW | $4,500 | $3,150 |
2.97 kW | $13,370 | $9,350 |
Rate Increase | 0% | 1% | 2% | 3% | 4% |
# years when investing in 2016 (to get 30% Federal Tax Credit) | $9,350 / ($450/year) = 20.75 | 18.5 | 17 | 16 | 15 |
What's the return on my investment?
- the savings in utility bill of 0.0906 x 415 x 12 ~ $450/year
- the net cost of the 2.97 kW system of $9,350
Cost of electricity varies widely across NM and the US

Net Metering, Energy Banking & Renewable Energy Certificate (REC)
If you decide to stay connected to the grid (which I recommend for now as the cost of batteries is still high), you remain a utility (PNM) customer. For that reason, before you are allowed to install your system, you have to enter into an interconnection agreement (with PNM, for example).Net Metering or Net Energy Metering
Net Metering allows consumers who generate some or all of their own electricity to use that electricity anytime, instead of when it is generated. The interconnection agreement states the terms of net metering and defines what happens with the electricity generated, whether one is over- or under-producing.
For example, if a residential customer has a PV system on the home's rooftop, it may generate more electricity than the home uses during daylight hours, he/she gets a credit for those hours, and can use those hours at night when they are not producing, 1-to-1 in kWh.
Energy Banking
Thanks to energy banking, if your system were to over-produce, the modest surplus from slight oversize would 'bank', and not get cashed out under PNM's 'small' system rules (below 10 kW). The surplus in kWh will carry over until used, unless the customer moves before using the banked kWh: if the customer closes their PNM account, PNM will cash out any remaining banked kWh at the 'avoided fuel cost' which is basically the wholesale rate of 2 to 3 cents per kWh.Renewable Energy Certificates (RECs)
- For people who got in 10 years ago, that rate was 10¢/kWh. Including tax and other surcharges, it yielded them ~20¢/kWh;
- For people who got in at a REC rate of 4¢/kWh, they recover about 15 cents per kWh;
- For people who got in last year, it was 3¢/kWh;
- For people who got in between the end of 2015 and the end of 2016, the REC Purchase Program from PNM was closed.
- For people who get in now (as of January 1, 2017), it is either 0.25¢/kWh or 0.0025¢/kWh, per PNM's website, which cites two different numbers in two different pages.
So yes, the REC agreements came back, but at a pathetically low rate, especially in comparison to the ~9 cents a kWh that PNM charges their customers. This allows PNM to meet the current federal mandates of 20% renewable by 2020 (which should be higher, by the way, especially here in NM) on the cheap.
But signing up for REC is optional, and not worth it until the rate is something above 2¢/kWh, and one is best holding out for 3/kWh or more. New contracts 'full retail perpetual banking', which means that PNM bills the customer on net monthly consumption, only after the 'bank of kWh" is depleted.
Is Financing Available?
- Pay cash for all of it, and get the tax credits back in the Spring of 2017 - this is the most advantageous and cheapest way to go, as financing always leads to added (and often hidden) fees.
- Pay only for the 60% portion, and the other 40% will be loaned to you (for a small fee).
- If you can’t pay out of pocket, or can only pay a portion, the company that sells you the solar system will guide you with financing: although solar providers do no offer financing directly, they can point you to a (hopefully local) bank that they have a relationship with to get you qualified quickly and easily.
- If you live in Santa Fe County and your gross household income is less than $104,000 per year, look into a loan from Homewise (983-9473), a low- and moderate-income lender.
- In other counties, check with a credit union or your local bank.