Federal solar credit ended Dec 31, 2025
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Solar costs · New Mexico

Solar Panel Cost in New Mexico

Fact-checked by Sorted & Saved data desk
Updated Data verified Nov 5, 2026

A typical New Mexico home uses 654 kWh a month[1] of electricity. Covering that with solar takes a system of about 4.4 kW est.[1,2], which costs roughly $15,500 to $20,500 est.[1,2,3] before incentives at the state's median installed price. With New Mexico's average residential price of 15.34¢ per kWh[4], our model puts payback at about 12 years est.[1,2,3,4,5]. Your quote, roof and utility plan will move these numbers, so treat them as a starting point.

On this page [ 7 ]

New Mexico solar at a glance

Average electricity price15.34¢/kWh[4]Jan–Aug 2026 average (preliminary)
Average home use654 kWh/mo[1]2024 average
Solar output per kW1,779 kWh/yr[2]PVWatts estimate for Albuquerque
Median installed price$4.10/W[3]Estimate, before incentives
Typical system4.4 kWSized to cover 100% of use
Typical price$18,000Estimate, before incentives
Year-1 savings$1,200Estimate
Payback12 yearsEstimate, cash purchase

Estimates use the inputs above and the assumptions in our methodology: New Mexico net metering: exports credited at the retail rate (statewide rule; your utility's tariff may differ). Prices rise 2.5% a year; panels lose 0.5% a year.

Solar cost in New Mexico by system size

Same assumptions as the typical home above; only the system size changes. Prices are the state median before incentives and include the incentives our calculator applies by default in New Mexico.

SystemPrice before incentives[3]After incentiveskWh in year 1[2]Year-1 savings[4][5]Payback (years)
4 kW$16,400$14,8007,120$1,09012
6 kW$24,600$22,10010,670$1,20015
8 kW$32,800$29,50014,230$1,20019
10 kW$41,000$36,90017,790$1,20023
12 kW$49,200$44,30021,350$1,200>25

Incentives that lower the price in New Mexico

Federal · tax creditEnding soon

Business credit for leased and PPA systems (48E)

Claimed by the system owner, not the homeowner; solar must begin construction by July 4, 2026 or be in service by December 31, 2027[6]

If a company owns the panels on your roof (a lease or power purchase agreement), that company may claim the business clean electricity investment credit and can reflect it in your price. You cannot claim it yourself.

Who
Third-party-owned systems (leases and PPAs). Ask the provider whether the price assumes this credit.
Deadline
December 31, 2027
Checked
November 5, 2026
State · tax creditAvailable

New Solar Market Development Tax Credit

10% of equipment, materials and labor costs, up to $6,000 per taxpayer per taxable year (unchanged; 2026 SB 55 increase to 30% / $15,000 did not become law)[7]

New Mexico taxpayers who install a solar energy system from 2025 through 2031 and receive an EMNRD certificate; refundable, first-come first-served under a $30 million annual statewide cap.

Who
New Mexico taxpayers who install a solar energy system from 2025 through 2031 and receive an EMNRD certificate; refundable, first-come first-served under a $30 million annual statewide cap.
Maximum
$6,000
Deadline
December 31, 2031
Checked
November 5, 2026

All New Mexico incentives, including utility and local programs →

How New Mexico utilities credit your solar

PRC rule 17.9.570 NMAC requires utilities to offer net metering to qualifying facilities. Excess generation in a billing period is credited on the next bill either as a payment/credit at the utility's energy rate or as carried-forward kilowatt-hour credits.[5]

We have not added every New Mexico utility yet, so the estimates on this page use the state-level rule: New Mexico net metering: exports credited at the retail rate (statewide rule; your utility's tariff may differ).

Full New Mexico net metering and export-credit rules →

FAQ

Frequently asked questions

How much do solar panels cost in New Mexico?

At the state median installed price of $4.10 per watt est.[3], a 4.4 kW est.[1,2] system that covers a typical home's use costs about $18,000 est.[1,2,3] before incentives. Quotes vary with roof, equipment and installer.

How long does solar take to pay for itself in New Mexico?

For a cash purchase at the state's average electricity price of 15.34¢ per kWh[4], our model estimates about 12 years est.[1,2,3,4,5]. Your utility's export credit and rate plan matter a lot; see the export-credit table above.

Is there still a federal solar tax credit?

Not for homeowners who buy. The Federal Residential Clean Energy Credit (25D)[8] does not apply to systems whose installation is completed after December 31, 2025. Leased and PPA systems are different: the company that owns the system may still claim a business credit.

sources

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Every number on this page links to one of these sources. Dates show when we last checked each one.

  1. EIA Electric Sales, Revenue, and Average Price 2024, Table 5A: Residential average monthly bill by stateeia.gov · checked Nov 5, 2026
  2. NREL/NLR PVWatts v8 (1 kW-DC, fixed roof mount, 20° tilt, south-facing, 14% losses, TMY weather)pvwatts.nlr.gov · checked Nov 5, 2026
  3. U.S. Distributed Solar and Storage 2026 Data Update (Barbose, Darghouth, O'Shaughnessy, Forrester), Berkeley Labeta-publications.lbl.gov · checked Nov 5, 2026
  4. EIA Electric Power Monthly, Table 5.6.B: Average price of electricity by state, year-to-date (August 2026, preliminary)eia.gov · checked Nov 5, 2026
  5. 17.9.570 NMAC - Governing Cogeneration and Small Power Production (NM State Records Center and Archives)srca.nm.gov · checked Nov 5, 2026
  6. Public Law 119-21 - Sec. 70513(a) and (g)(5) (48E); Sec. 70512(a) and (l)(4) (45Y)govinfo.gov · checked Nov 5, 2026
  7. New Solar Market Development Tax Credit (NSMDTC) - EMNRD Energy Conservation and Managementclean.energy.nm.gov · checked Nov 5, 2026
  8. IRS FS-2025-05: FAQs for modification of sections 25C, 25D, 25E, 30C, 30D, 45L, 45W, and 179D under Public Law 119-21 (OBBB)irs.gov · checked Nov 5, 2026

State data last re-checked November 5, 2026.

Change log

  1. New Solar Market Development Tax Credit: now "10% of equipment, materials and labor costs, up to $6,000 per taxpayer per taxable year (unchanged; 2026 SB 55 increase to 30% / $15,000 did not become law)" (active).