New Mexico Doubles Down on Solar, Wind Tax Credits Amid Federal Rollbacks

New Mexico is racing to shore up its clean energy economy before federal tax incentives expire. Lawmakers are advancing bills that would expand tax credits for solar panel installation and geothermal projects—critical moves as the Trump administration's "One Big Beautiful Bill," passed in July 2025, imposed a December 31, 2027 deadline for wind and solar projects to qualify for federal investment tax credits that were previously set to phase out a decade later.

State legislators, including Patricia Roybal Caballero, Pat Woods, and Mark B. Murphy, are backing HB 62, which provides enhanced tax incentives for renewable energy sources. The measure builds on New Mexico's existing solar tax credit of 10 percent up to $6,000 for systems installed after March 1, 2020. A separate proposal would increase the solar market development income tax credit, addressing what clean energy advocates say is a shrinking window for federal support.

Governor Michelle Lujan Grisham's administration has already positioned the state ahead of the curve. In March 2024, she signed the Advanced Energy Equipment Tax Credit into law, offering a 20 percent corporate income tax credit—up to $25 million per project—for companies manufacturing renewable energy components. That credit remains available through 2032, providing a crucial buffer as federal support tightens.

These state-level efforts complement New Mexico's landmark 2019 Energy Transition Act, which requires utilities to eliminate fossil fuel power plants by 2045. The new proposals, including SB 18 (the Clear Horizons Act) and SB 109, aim to accelerate emissions reductions while blocking utilities from recovering costs for new natural gas infrastructure. Together, they represent New Mexico's determination to lead the nation's clean energy transition regardless of federal policy shifts.