Three months after Governor Bill Richardson signed an executive order outlining his state’s plan for a green economy, New Mexico has added to the books a limited property tax exemption for owners installing solar water heaters, solar space heating and photovoltaic (PV) systems.
New Mexico Governor Bill Richardson is taking steps to make his state a green energy hotspot.
The New Mexico Property Tax Incentive, added to the books this year as part of House Bill 233 (HB233), ensures that buyers aren’t faced with big increases in their property taxes when they install solar panels on their roof. We could try to explain it, but the DSIRE database does a pretty darn good job:
According to state law, for the purposes of determining property taxes, the value of a property cannot increase by the greater of 3% of the previous year’s assessment, or 6.1% of the assessment from two years ago. An assessment may exceed these restrictions, however, if physical improvements are made to the property. HB 233 states that solar systems will not be treated as physical improvements, and therefore, will not increase the value of the property for property tax purposes.
Clearly, the aim of HB233 is to provide incentive for homeowners to install solar panels and solar water heating systems. The new law provides an added kick in that, when it comes time to sell your home, the value of your system will be included in future assessments, a provision that may encourage buyers to appreciate the full value of, say, your solar panels. (To learn more about how solar panels add value to your home, see “Five Things Homeowners Should Know About Solar.”)
If you’re interested in installing solar-related technologies in New Mexico, be sure to read HB233 carefully and know how the act defines a solar system. In brief, the law pertains to solar technologies that provide space heat, water heat or electricity to a property. If you’re thinking of improvements such as new windows, a dark-colored water tank or non-vented Trombe walls, beware that such upgrades are not eligible for the property tax exemption.
It goes without saying that New Mexico gets plenty of sunshine. So it’s great to see that state lawmakers are making efforts to promote the adoption of solar power. By adding a solar property tax exemption, New Mexico joins rank with many other states that have already moved in this direction.
Find out more about solar in New Mexico:
- Intel to Add Solar Installations in CA, AZ, OR and NM
- SunEdison, Xcel to Develop 50 mW of Solar PV in New Mexico
It’s great to see states other than those on the east and west coast finally recognizing the need for a green economy. Even though solar may still be priced out of the reach of some, with the prices of solar panels falling, coupled with tax incentives offered on the state and federal level, many others will likely take the plunge. It will be interesting to watch as other states begin accepting renewable energy as a viable energy source and not just for those on the fringe.