Project Development, Solar

New Mexico Greets New Year with New Solar RECs Program

New Mexico’s first solar photovoltaic (PV) incentive program, just approved by the New Mexico Public Regulatory Commission (PRC) as part of the state’s Renewable Portfolio Standard, calls for the main local utility (PNM) to buy Renewable Energy Credits (RECs) for 13 cents/kWh from interconnected solar photovoltaic systems.

Under the new rule, the utility will pay customers for every kilowatt-hour generated with their solar systems through at least 2018. In addition, these customers will retain their net-metering benefit, which has been in effect since 1998. Combined with federal solar tax credits kicking in on January 1, 2006, the purchase and installation of PV systems will be significantly more affordable in New Mexico. In an effort led by the Coalition for Clean Affordable Energy (CCAE), this PV program makes New Mexico as one of the first states in the U.S. to take this step, effectively paving the way for further distributed renewable energy generation. The new program becomes effective in March 2006, is limited to PV systems under 10 kW, and has funding for 1.2 MW. Plans for commercial customers are in the works, and the PRC is planning to expand the net metering standard. Under the new program, PNM is allowed to count each kilowatt-hour of solar power as equivalent to three kilowatt-hours of wind power toward their renewable energy requirements, which makes the program very affordable to ratepayers and provides the utility with an added incentive to satisfy its RPS requirements to a greater extent with customer owned solar power. “This program is a historic and major step forward for New Mexico that will make solar power much more affordable for residents. In particular, it leads the way for incentives that are based on actual production of solar energy, so that high quality systems are encouraged”, said Ben Luce, Chair and Policy Director of the New Mexico Coalition for Clean Affordable Energy (CCAE). Luce first proposed the idea for such a program to the Public Regulation Commission in 2004, an idea that the Commission approved at the time, but PNM’s program is the first actual program to be proposed by a utility and approved by the Commission. (The approval of this program is the result of several previous legislative and regulatory campaigns by the CCAE that created the legal basis for the program, starting with efforts by the Coalition in 1998 to include renewables.) “PNM was very proactive about proposing this program, and supporting it through the regulatory process. The regulatory process is not easy, and we congratulate PNM for sticking with it, and the Commission for both strengthening and approving PNM’s proposal”, said Luce. “This program will have little or no impact on rates compared to what ratepayers would otherwise pay to support the renewable energy standard, but will greatly diversify the overall program by including distributed solar power,” said Luce. CCAE estimates that the new program and other incentives will increase the solar installation industry in New Mexico by fivefold almost immediately. For the full suite of pro-solar legislative issues including solar tax credits to help build a more robust local solar industry, visit CCAE’s link below.