In just over four months, you—and every other New Mexican—will lose your chance to save thousands on a new solar energy system for your home.
On July 4, the final 2025 federal budget was passed, confirming that the federal solar tax credit for homeowners will expire on December 31, 2025. Unfortunately, there is no phase-out period for the solar tax credit. When it ends, it ends.
The residential solar tax credit has been an important tool to help New Mexico homeowners save on average around $9,000 for installing a new solar energy system on their homes.
But don’t fear. There’s still time to act to take advantage of the solar tax credit and to take other important incentives that make installing residential solar panels in New Mexico more afforable.
Learn what you can do to capitalize on the current federal solar tax credit while you still can, plus other considerations to make going solar as easy and affordable as possible.
What You Need to Know
The residential solar Investment Tax Credit (ITC) is a 30% tax credit for individuals installing solar energy systems on residential properties. The credit can be applied to personal income taxes, used when homeowners purchase solar energy systems and have them installed on their homes.
For many homeowners in New Mexico, the solar tax credit has meant saving around $9,000 on a typical solar panel installation. That’s real money staying in your pocket, not getting eaten up by rising energy costs.
The residential solar ITC was put in place as part of the Inflation Reduction Act and was previously scheduled to phase out by 2035.
Now, those tax benefits are ending much sooner than expected. Here are four things you can do now that the change has gone into effect.
1.Install a New Residential Solar System on Your Home
To receive the full 30% credit this year, you must fully install and commission a new solar system by the end of the year.
Because permits, inspections, and equipment all take time, it’s imperative you act as soon as possible to start the process of getting a residential solar system installed on your home if you want to qualify for the 30% credit.
Time frames become even tighter as demand for new solar installations in New Mexico goes up. Every day, more and more New Mexicans are making the decision to lock down a new solar system before December 31st, tightening an already squeezed market.
This is true for equipment, as well. When demand spikes, so does pressure on the supply chain—especially for high-efficiency solar panels, solar inverters, and solar batteries.
All of these factors combine to make acting now, with urgency and intentionality, critical to save thousands on what could be one of the most worthwhile investments you and your family will ever make.
When you go solar with SunState, you can ensure a a Lifetime Assurance Warranty and worry-free installation. This means your investment will hold up for the long term, without any added stress around getting your new solar system up and running.
On the financial side, SunState Solar offers $0 down financing options and flexible payment plans through our trusted financial partners. Our financial partners are local institutions who are there for you with in-person service that can answer any questions you have, all the way from start to finish.
Don’t miss out on saving thousands—schedule your free solar consultation with SunState Solar today!
2.Learn About In-State Solar Energy Incentives
Thankfully, New Mexico has a number of in-state incentives homeowners can still take advantage of to save money on their solar systems. In 2025, residents can take advantage of significant state tax credits, tax exemptions, and favorable utility programs to reduce the cost residential solar systems and accelerate their return on investment.
One is the New Solar Market Development Tax Credit. This state solar tax credit covers 10% of the total cost of a solar energy system, up to a maximum of $6,000. For the 2025 tax year, too, a new provision offers a higher incentive for systems that include at least 15 kilowatt-hours of solar battery storage.
Additional financial relief for homeowners looking to install new solar energy systems are a few tax exemptions.
One is a property tax exemption. Any value added to your home by a solar panel system is entirely exempt from property taxes, which means you can increase your property value without increasing your tax burden.
Another is a gross receipts tax exemption. Buying a residential solar energy system is exempt from New Mexico gross receipts tax, providing an immediate upfront savings on the total cost of the system.
And, other financial benefits like net metering come into play when you add a solar energy system to your New Mexico home. Net metering allows homeowners with solar panels to send excess electricity their solar system generates back to the electrical grid. In return, homeowners receive credits on their utility bills.
Individual utilities, including PNM and El Paso Electric, implement net metering on their grids, often being used to offset electricity costs in months when the solar system produces less than the home consumes.
All of this means that even though the impactful federal residential solar ITC may be going away, there are still significant opportunities to cut costs on your residential solar panels in New Mexico. Learn more about how much a solar system could impact you and your family by contacting SunState solar today.
3.Check Up On Your Current System
While installing and commissioning a new solar energy system qualifies you for numerous in-state and, only for a short time longer, federal financial incentives, it’s also important homeowners with residential solar systems already installed on their home don’t get lost in the shuffle.
Now is a great time to check up on your solar system’s warranty. Every SunState Solar system comes with a Lifetime Assurance Warranty and worry-free solar panel installation for ultimate peace of mind. The warranty qualifies your system for lifetime industry-leading protection.
SunState Solar’s new Lifetime Assurance Warranty doesn’t only cover solar panels, though. It also covers racking systems, microinverters, optimizers, string inverters, hybrid inverters, and rapid shutdown devices, too—an entire suite of equipment protected for life.
Outside of warranty coverage, it also may be time for a routine solar panel cleaning. All sorts of things like dust and debris can impact the efficiency of your system. SunState offers professional solar panel cleaning service to ensure your family’s solar energy system is operating at peak efficiency.
4.Take Action to Stand Up for the Solar Industry
There are many ways you can get involved and become a champion of the solar industry.
One is by joining a local solar energy industries group. In New Mexico, the Renewable Energy Industries Association of New Mexico (REIA-NM) is the local chapter of the national Solar Energy Industries Association. REIA-NM does important work to push for pro-solar legislation to ensure all New Mexicans can access the benefits of solar easily and without exorbitant costs.
Contacting local representatives is another way to become involved. Writing letters of support that share your personal thoughts and experiences with solar, whether residential or commercial, are always impactful to keep the momentum going around the meaningful impacts of solar energy.
Don’t neglect the impact of word-of-mouth support, either. Showing off your home’s solar energy system on social media, talking to neighbors about what your home’s solar system has meant for you and your family, or even penning an op-ed in your local paper all go a long way to champion our industry.
Ideas to highlight when talking about the benefits of residential solar energy include:
- Environmental impacts: When homeowners go solar, they reduce their carbon footprint. Recycling solar panels ensures their full lifecycle is environmentally friendly, too.
- Economic impacts: A home solar system can save families upwards of $10,000 over 20 years—even more for systems that run for longer. With proper care, a residential solar system can last up to 30 years, adding an additional thousands in savings.
Thankfully, SunState Solar has resources available to everyone to learn more about all the ins and outs of solar and its numerous benefits, from solar panel recycling to battery energy storage to additional financing options.
Conclusion: Act Now Before It’s Too Late
With the 30% federal solar tax credit set to disappear permanently on December 31, 2025, the time to act is now. For the average New Mexican family, this is a final opportunity to keep thousands of dollars in your pocket while making a powerful investment in your home and energy independence.
While New Mexico’s excellent state-level solar incentives—including the Solar Market Development Tax Credit and valuable tax exemptions—will continue to make solar energy a smart choice, the chance to combine them with the substantial federal credit is a limited-time opportunity you don’t want to miss. The rising demand for installations and equipment ahead of the deadline means every day counts.
Don’t let this moment pass you by. Whether you’re ready to install a new solar system, need to service your existing one, or want to become a champion for renewable energy, the path forward starts with a single step. Secure your energy future and maximize your savings by locking in these benefits before they’re gone for good.
Ready to seize the savings? Contact SunState Solar today to get a free estimate and let our experts guide you through every step of the process.