A bill to reinstate a solar tax credit is headed to the governor’s desk. The bill, sponsored by Senate Majority Whip Mimi Stewart, D-Albuquerque, passed the House floor Wednesday by a vote of 51-19.
SB 29 would create a personal income tax credit to cover 10 percent of the costs of a solar thermal or solar photovoltaic system for residential, business or agriculture applications. Democratic Rep. Matthew McQueen of Galisteo is the House sponsor of the bill.
New Mexico initiated a similar tax credit in the last decade, which expired in 2016. The Legislature passed a bill to reinstate the credit that same year, but it was pocket-vetoed by then-Gov. Susana Martinez.
“We’ve passed this a couple times,” McQueen said. “We’re just trying to reinstate that.”
The bill would cap the tax credit at $6,000 per project, with an $8 million annual total limit. The tax credit would expire in eight years.
While the bill ultimately garnered bipartisan support on the floor vote, Republicans spent three hours debating the bill.
Rep. Jason Harper, R-Rio Rancho, said he was supportive of the earlier solar tax credit, but wouldn’t support this one.
“I’m going to use this credit as an example of a credit that worked, did what it was supposed to do, and why it should now go away,” he said.
Harper argued that the price of solar systems has decreased since the last tax credit was implemented in 2008, and that the industry should be able to compete effectively without tax credits.
“With the price dropping, the efficiency being where it’s at, and the industry being established, it is now time for them to stand on their feet, and not be subsidized by wage-earner dollars,” he said.
Rep. Randal Crowder, R-Clovis, claimed that the industry is moving away from residential solar installations.
“A lot of the neighborhoods in my part of the state are implementing restrictive covenants in order to prohibit rooftop solar from showing up in their subdivisions. The neighborhood does not like the appearance,” Crowder said. “How wise is it to put this amount of money in tax credits into something when the industry is moving away from this?”
Crowder added that he’s only seen rooftop solar systems in high-end homes, and brought up an issue about wording in the bill that stated the credit would encourage the installation of solar systems “in” the residence, rather than “on” the residence.
“How are you going to get your photovoltaic systems to work if they’re inside the residence?” Crowder said.
“This isn’t something we’ve stumbled on before,” McQueen said. “The key issue here is that they should be connected to the residence.”
Rep. Larry Scott, R-Hobbs, challenged the idea that the solar tax credit would have any meaningful impact on climate change or reducing emissions in the state.
“How would rooftop solar help?” Scott said. “Would it surprise you to know that the [carbon dioxide] saved from this $64 million expenditure is not even a rounding error in state emissions, let alone the emissions on the planet.”
Scott then tried to amend the bill to include a $250,000 cap on the assessed value of the home to be eligible for the tax credit. The amendment garnered support from other Republicans, but was tabled.
The bill passed the Senate over the weekend and passed the House by a vote of 51-19 Wednesday.