New Mexico residents will once again get money back from the government for installing solar panels on their businesses and residences.
The bill would allow people who put up solar panels to receive a tax credit of no more than $6,000 or 10% of the costs of the solar panels themselves as well as the costs of installation. The tax credit would get a new expiration date of 2028.
For renewable energy advocates, the win is a modest balm to the failure of several highly anticipated community solar bills this session. It shows at least some support for New Mexico's stated commitment to reduce carbon emissions.
For opponents, the bill presented a financial risk and potential drain on the general fund.
House sponsor, Rep. Matthew McQueen, D-Santa Fe, says the tax credit will stimulate the solar industry and encourage an uptick in solar installation jobs, which he says have dropped significantly since the state's solar tax credit ended in 2016. According to a report by the National Solar Foundation, solar jobs decreased by almost 7% between 2017 and 2018.
The proposal makes solar more accessible to those who would otherwise not be able to afford it, especially due to the expiration of federal solar tax credits. It's part of an effort to address climate change, he argues.
"I want New Mexico to be positioned to take part in what I see as a coming renewable energy revolution, and I think this is a part of that," said McQueen in a floor debate with Rep. Larry Scott, R-Hobbs, who questioned whether the bill could provide any significant benefits in fighting climate change and wanted details about the advantages of the tax credit for low and middle income residents.
Other House Republicans raised concerns about the fiscal impacts of the bill, which caps the total amount of money the state can give out in credits at $8 million a year—significantly more than the $3 million annual cap on the previous tax credit.
Rep. James Strickler, R-Farmington, worried that the bill "ties the hands of our legislators if the economy has a downturn," potentially putting the state in a difficult position by depleting the general fund in years that see less money from the oil and gas industry.
The Legislative Finance Committee raised a similar point in the bill's fiscal impact report.
"This bill creates a new tax expenditure with a cost that is difficult to determine but likely significant," the report states. "LFC has serious concerns about the significant risk to state revenues from tax expenditures and the increase in revenue volatility from erosion of the revenue base."
Yet, the report also states that failure to pass the bill would likely contribute to a decline in the solar industry in New Mexico.
The solar tax credit bill is almost certain to get a signature from Lujan Grisham, who listed the renewal of the tax credit as one of her legislative priorities at the beginning of the session.
Other high-profile solar legislation failed to make it through this year's short, 30-day session.
Community solar bills introduced in the House and Senate sparked excitement among advocates and residents early in the session, but failed to gain adequate legislative support to pass.
Last week, the version of the community solar bill introduced in the House, House Bill 9, failed on a vote of 28 in favor to 36 against. Thirteen Democrats and all House Republicans voted against the bill that would have allowed people who don't have access to rooftop solar to subscribe to a remote, communal solar installation.
Two similar bills introduced in the Senate received initial committee support but do not yet appear on the agenda for a vote on the Senate floor. With less than 24 hours left in the session, these bills have likely run out of time.