New Solar Market Development Tax Credit Incentive

Welcome to the electronic application portal for the New Solar Market Development Tax Credit (NSMDTC). A New Mexico individual taxpayer, corporation or agricultural enterprise who has purchased and installed, on property that he, she, or the corporation owns, or, in the case of a federally recognized Indian nation, tribe or pueblo, holds in leasehold, an operating or substantially complete solar energy system that the department has certified pursuant to this part is eligible for a state tax credit for the tax year in which the system is installed, unless the system is eligible for a supplemental state tax credit. A supplemental state tax credit means the new solar market development income tax credit awarded for eligible solar energy systems installed in calendar years 2020-2023 when certification was not previously awarded due to exhaustion of credit certification limits. The tax credit is available for up to 10% of the equipment, materials, and labor costs of a solar energy system, which may not exceed $6,000. dollars. The cost of a solar energy system the department certifies shall be the net cost of acquiring the system and shall not include disallowed costs, pursuant to 3.3.14.14 C. NMAC. The fund year of the solar energy system is determined by the date the building code authority certifies a successful inspection of the solar system.

Overview of tax credit process:

Step 1 – Purchase and install an operating solar energy system.
Step 2 – Obtain required documents from installation contractor.
Step 3 – Apply for a tax credit here with Energy Minerals and Natural Resources Department (EMNRD).
Step 4 – Receive a certificate of eligibility from EMNRD.
Step 5 – File your tax credit with the New Mexico Taxation and Revenue Department.

Before you start an application, review your documents to be sure they are complete. Please allow 3 to 4 weeks to process the completed application. The Department will send certificates of eligibility electronically to the e-mail address provided on the application. The NSMDTC application package requirements in the subparagraph below are dependent on solar energy system location and whether application is seeking a state tax credit, or a supplemental state tax credit.

Application type: A completed application package for solar energy systems installed in years 2024 and after on private land shall remit the following attachments:

Required Documents:

• A current property tax bill or other equivalent proof of ownership in the applicant’s name for the residence, business, or agricultural enterprise where the solar energy system is installed. All names, partnerships and titles listed as property owners shall be listed on application.
• A Building Code Inspection report including the name of the building code authority, the permit number, and the date of successful inspection, either noted on a physical form, photo of inspection sticker, or a web-based report. The department prefers the permit for electrical inspection over the general building permit.
• An itemized invoice documenting the equipment, materials, and labor costs of the solar energy system, including but not limited to itemized accounting of permits, design, equipment, material, categorized fees, and installation labor of the solar energy system. For categorized fees, see Subsection C. of 3.3.14.14 NMAC.
• The solar energy system’s design schematic and technical specifications; and
• Site plan, which is a bird’s eye view of solar system design.
• One-line or three-line electrical diagram showing wiring connection
• Other information the department needs to evaluate the specific system type for certification.

Application type:

The application package remitted for solar energy systems installed in years 2024 and after on lands of a federally recognized Indian nation, tribe or pueblo and held in leasehold by that taxpayer shall consist of the following information provided as attachments:

Required Documents:

• A leasehold agreement, trust, allotment of property or other equivalent proof that the property where the solar system is installed is held on behalf of the individuals applying. All names, partnerships and titles listed as leaseholders shall be listed on application.
• For projects in areas subject to a building code authority’s inspection: the permit number and issuance date, and date of successful inspection, if applicable, noted on a physical form, photo of inspection sticker, or a web-based report the applicable building code authority approves. For projects in areas not subject to a building code authority’s inspection, a certification from a licensed New Mexico electrician that the solar energy system was properly integrated into the applicable structure’s electrical system.
• An itemized invoice documenting the equipment, materials, and labor costs of the solar energy system, including but not limited to itemized accounting of permits, design, equipment, material, categorized fees, and installation labor of a solar energy system. For categorized fees, see Subsection C. of 3.3.14.14 NMAC; and
• The solar energy system’s design schematic and technical specifications.
• Site plan, which is a bird’s eye view of solar system design.
• One-line or three-line electrical diagram showing wiring connection
• Other information the department needs to evaluate the specific system type for certification.

Application type:

The application package for a supplemental state tax credit for a project purchased and installed in years 2020 through 2023 shall consist of the following information provided as attachments:

Required Documents:

• A current property tax bill or other equivalent proof of ownership in the applicant’s name for the residence, business, or agricultural enterprise where the solar energy system is installed. All names, partnerships and titles listed as property owners shall be listed on application.
• For projects on tribal lands: a leasehold agreement, trust, allotment of property or other equivalent proof that the property where the solar system is installed is held on behalf of the individuals applying. All names, partnerships and titles listed as leaseholders shall be listed on application.
• The equipment, materials, and labor costs of a solar energy system the department certifies, documented in an itemized invoice. The invoice shall itemize the following costs including but not limited to permits, design, equipment, material, categorized fees, and installation labor of a solar energy system.
  • The department may accept a purchase/installment agreement. If an applicant cannot obtain an itemized invoice for a project installed in years 2020 through 2023, due to their contractor no longer being in business, the department may accept at its sole discretion evidence of project costs, such as evidence of total payments made and a certification that such payments did not include otherwise excluded costs under categorized fees please see Subsection C. of 3.3.14.14 NMAC; and
• For projects in areas subject to a building code authority’s inspection: the permit number and issuance date, and date of successful inspection, if applicable, noted on a physical form, photo of inspection sticker, or a web-based report the applicable building code authority approves; and
  • For projects in areas not subject to a building code authority’s inspection, a certification from a licensed New Mexico electrician that the solar energy system was properly integrated into the applicable structure’s electrical system.
• the solar energy system’s design schematic and technical specifications.
• Site plan, which is a bird’s eye view of solar system design.
• One-line or three-line electrical diagram showing wiring connection
• Other information the department needs to evaluate the specific system type for certification.

Application type: Solar thermal system state tax credit.

• Contact ECMD for instructions on how to claim costs related to a solar thermal system.

LINKS:

Online application portal: https://wwwapps.emnrd.nm.gov/ECMD/NSMDSubmissions

User Guide for New Solar Market Development Tax Credit: Download

Locate additional FAQs: https://www.emnrd.nm.gov/ecmd/faq/

Rule 3.3.14 NMAC, New Solar Market Development Tax Credit: Download