Cost of solar panels in New Mexico (2024)

How much do solar panels cost in New Mexico?

With professional installation, a typical 8-kilowatt residential solar panel system in New Mexico costs $25,040. That price drops to $17,528 after using the full federal solar investment tax credit (ITC).

Average solar panel installation cost by system size in New Mexico

This doesn’t include the cost of a solar storage battery, which sometimes costs as much as the panels. Solar batteries are a must if you want real energy independence and essential if you go off-grid. Permitting, utility fees and maintenance also add to the cost of going solar.

Are solar panels worth it in New Mexico?

We’ve talked to over a hundred people who have already gone solar in New Mexico. It’s generally worth it if you like the idea of lowering your monthly utility bills, helping the environment and gaining more energy independence.

Like a lot of residents, Douglas in Albuquerque, New Mexico, went solar to lower his electric bills. Since making the switch, their monthly bills went from $300 or $400 to just $8 or $9.

Others we’ve talked to emphasize the savings, too. “We have been turned on for about a year and a half and couldn’t be happier,” Kali in Rio Ranch, New Mexico, told us. “We have saved thousands of dollars to what we would have paid on.”

Homeowners with solar panels typically save $20,000 to $90,000 over 25 years.

One of the only downsides, according to Benjamin in Albuquerque, New Mexico, is getting all the necessary permits. Apparently, it was “a giant pain in the butt, and waiting on PNM to do anything was like pulling teeth. The process took eight months,” he told us. “But if you're patient with it, it's worth it.”

People who are dissatisfied after going solar often tell us about slow installations, faulty equipment and hidden fees. These problems are usually more specific to a particular solar company, though. With the right solar partner, you could be well on your way to powering your house with cheap, clean energy for decades.

Buying solar panels is a big upfront investment, but many people in New Mexico find it worth it. Over 25 years, New Mexico homeowners with solar panels avoid $68,335 in utility costs on average.

» STILL NOT SURE? Solar energy pros and cons

Solar panel installation cost factors in New Mexico

Equipment — solar panels, inverters, mounting hardware and other electrical accessories — is typically the largest portion of your overall total costs (approximately 25% to 50%). Labor, which includes planning, preparing and connecting your system to the grid, accounts for 10% to 30%. Permits and other soft costs generally make up the rest of the total price tag.

Most installers set the price according to the system's wattage, with a typical cost between $2.50 and $5 per watt. In New Mexico, the average cost per watt is $3.13.

Solar equipment costs

Your equipment costs can fluctuate based on a couple of things: the size of your setup and how efficient your panels are at converting sunlight to electricity. The more efficient the panels, the fewer you'll need, which can reduce your total cost.

Another consideration is batteries. Solar batteries are optional, and choosing to include them can add an extra $7,000 to $18,000 to your bill.

You might also want to consider a monitoring system for your solar gear. These systems can give you a heads-up if something's not right with your panels and help you keep track of your net metering. They usually cost between $80 and $400, but some companies may provide one for free with your solar energy system.

» COMPARE: Most efficient solar panel

Size of your system

The size of your solar panel system is a big factor in your total cost. The average New Mexico household needs a 7.85 kW system to offset enough energy costs to make solar viable. Depending on your household energy usage, you might need a smaller or larger system.

To determine the size you need for your home, find the amount of electricity you used in the last year in kilowatt-hours (kWh) by going to your electric bill account dashboard online. Divide your annual kWh by 1,200 to find the system size you need. For example, the typical New Mexico home uses around 7,752 kWh per year. So, you would need a 6-kW or 7-kW system to provide enough power.

It’s smart to upgrade any old appliances before going solar. For example, replacing an old refrigerator with a more eco-friendly one reduces your electric load, which means you need fewer solar panels, making the whole system cheaper.

» WATT’S THE DIFFERENCE? Kilowatt vs. kilowatt-hour

Condition of your roof

The size of your solar panels is substantial, so make sure your roof can handle the load. A pre-installation roof check is a smart move. You'll want a roof that's strong and durable. Solar panels usually last  25 to 30 years, and you want your roof to last just as long. If it doesn't, you’ll end up paying more to take the panels down when it's time for a roof makeover.

We often hear from disgruntled solar customers who felt blindsided by expensive roof repairs needed after their solar panel installation was complete. It's important for your roof to match the system’s longevity if you want to ensure a seamless and cost-effective solar journey. Get your roof inspected, fixed or replaced before you get a solar energy system.

» SHOULD YOU: Replace your roof before going solar?

Local permits

Installing solar panels in New Mexico typically requires both building and electrical permits to ensure safety and compliance with regulations. The process can vary, but the City of Albuquerque offers resources such as online permitting (and a promise to process residential rooftop-mounted solar panel permit requests in three days) as well as checklists to streamline the application for homeowners. The state has different solar permitting regulations for manufactured homes.

How can I pay for solar panels in New Mexico?

You have options when it comes to paying for your solar system. When you pay upfront, you receive full ownership and potentially lower costs because you won’t pay interest on a solar loan. You can also finance or lease your system or get a power purchase agreement (PPA). With leasing or a PPA, you get the benefits of solar, but you don’t own the system.

• Loan: Solar loans let you borrow the needed funds from a lender and pay them back over time. While you'll end up paying more because of loan interest, the savings on your power bill from solar energy might help balance it out.
• Lease: Leasing solar panels is a great way to set up a system without the high upfront costs. A potential downside is that you are not eligible for the same tax incentives.
• PPA: A power purchase agreement is an agreement between you and a third-party company that owns and installs the panels on your home. You agree to buy the electricity they produce at a set rate, which helps you lower your utility bills.
• Home equity: Using a home equity line of credit or loan to finance a solar installation can be a financially beneficial option — home equity interest rates are relatively low, and homeowners can still take advantage of the federal solar investment tax credit.

» SOLAR PANELS: Lease vs. buy

Solar incentives, tax credits and rebates in New Mexico

The federal solar investment tax credit (ITC) is the biggest factor in reducing the cost of going solar in New Mexico. The ITC credits 30% of the system’s total cost — including equipment, labor and permits — toward what you owe on federal income taxes.

The ITC drops to 26% in 2033 and 22% in 2034.

Don’t get confused: The ITC is not a rebate or a refund. It is a credit that goes toward what you owe on federal income taxes the year your system becomes operational. Any unused portion of the credit rolls over into future tax years.

For example, if you spend $10,000 installing a solar panel system, the ITC is worth $3,000. If you owe $15,000 in taxes, the credit reduces your debt to $12,000. The ITC only offsets your tax liability; you can't take advantage of it if you don’t owe taxes in the first place.

Additional solar incentives in New Mexico programs incentivize this shift to renewable energy, making going solar a financially attractive option for homes and businesses.

How to save money on solar panels in New Mexico

There’s no way around it — solar panel installations are expensive. Here are some tips to maximize your savings on solar panels in New Mexico:

• Compare quotes: Get quotes from at least three or four different solar installers in New Mexico. This lets you compare different proposed equipment, pricing, financing terms and estimated energy production to find the best overall value. Don't just go with the cheapest option without vetting quality and services.
• Explore payment options: Affordable financing makes the upfront costs of solar more manageable. For instance, leases and power purchase agreements (PPAs) can let you start saving from day one with little or no money down. New Mexico also allows PACE financing for commercial and industrial solar installations.
• Use incentives: New Mexico has multiple incentives to reduce solar costs, including tax credits.

» TIPS: Get the best solar quotes

Compare solar installation companies in New Mexico

We compared ratings and reviews, equipment options, warranties, availability and other factors to pick the top solar companies in New Mexico.

Bottom line

If you’ve been thinking about going solar, you’re not alone. More than 54,000 solar installations already exist in New Mexico — enough to power more than a million homes and account for about 441,000 homes.

New Mexico's climate makes it a great place to go. The main drawback is the high cost of purchasing and installing the panels and equipment. Many residents we've talked to say the long-term savings outweigh the upfront expense.

The ConsumerAffairs Research Team conducted an in-depth analysis to determine how much solar energy costs in New Mexico and the average solar cost in other states.

Solar panel costs: New Mexico vs. nearby states