Proposed tax credit would refund some of the cost of battery storage

The House Taxation and Revenue Committee discussed a bill on Friday that would provide tax credits for energy storage systems such as batteries. Because it is a tax credit bill, the committee did not vote on HB 73 and instead tabled it for possible inclusion in a future tax bill. The legislation would provide a […]

Proposed tax credit would refund some of the cost of battery storage

The House Taxation and Revenue Committee discussed a bill on Friday that would provide tax credits for energy storage systems such as batteries.

Because it is a tax credit bill, the committee did not vote on HB 73 and instead tabled it for possible inclusion in a future tax bill.

The legislation would provide a tax credit of up to 40 percent of the cost of installing an energy storage system, with a cap of $5,000 for residential and $150,000 for commercial, industrial or agricultural. Those systems must be installed between March of this year and the end of 2028 and must be installed alongside a new or existing solar array. 

The Energy, Minerals and Natural Resources Department will certify these tax credits on a first-come, first-serve basis. Just because someone installs a storage system does not necessarily mean they will get the tax credit as there is a $4 million cap in how much the state will award each year. However, an amendment made in the House Energy, Environment and Natural Resources Committee allows for people who do not receive the tax credit one year due to the cap being met to be eligible for the tax credit the next year.

“Why do we need it? We need to promote wider adoption of distributed energy systems in the state of New Mexico,” said bill sponsor Rep. Debra Sariñana, D-Albuquerque.

She said it can also be used as backup power during an emergency.

The tax credit was included in the tax package last year that passed the legislature, but ultimately the governor line-item vetoed it.

Rep. Linda Serrato, D-Santa Fe, asked about combining the state tax credit with a federal stack credit and was told that those tax credits could be stacked.

During questioning, Sariñana said that the tax credit would help people who may just barely be able to afford an energy storage system. She said getting a little bit back in the form of a tax credit would help everyday people.

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