Wednesday, April 1, 2009

New programs make solar energy a good investment

Communities in New Mexico receive more direct sunlight every year than almost anywhere else in the world. This resource gives every homeowner a chance to provide power to their homes through solar energy, allowing them to both save money over the long term and contribute to the nation's renewable energy infrastructure. However, two major problems have hampered the spread of individual solar systems: high up-front costs and the inability of solar owners to link the value of solar equipment to the value of their home. Recent policy developments at the local, state, and federal levels seek to remedy these issues.

The first of these is a new program implemented by the New Mexico Public Regulation Commission available to all PNM and El Paso Electric customers. Currently, if an individual installs a solar system on their home, the electricity provider will pay the individual $0.13 per kilowatt hour (the unit used to measure electricity) for all energy produced by the solar system. These payments are not for the actual energy, but for a renewable energy certificate (REC), the vehicle by which the state is asking companies to incentivize the use of renewable energy. These REC payments are in addition to the benefit that customers already receive through net metering, the process by which the electric company credits the customer for the energy produced by their solar system. So, if you buy a solar system for your home, large electric companies will send you a check every month for the power your system is producing.

On top of these provisions, there are three solar tax incentives offered by both the federal and state governments. Effective at the beginning of 2009, you can count 30 percent of the total cost of any solar system as a credit against your federal taxes. Next, the New Mexico Legislature just passed a bill that provides a 10 percent state tax credit on top of the federal credit, bringing the total state tax credit up to 40 percent. Finally, if you purchase a solar system you will not pay any state gross receipts taxes on it.

From the article:
New programs make solar energy a good investment
Bill McCamley and Mark Westbrock
Read the full article here

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