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The State will begin reimbursing New Mexicans for energy efficiency and electrification measures they install in their existing homes under a tax credit program passed by the legislature in 2021. Some low-income households may be able to have 100% of the cost of new water heaters, windows or insulation upgrades reimbursed from the state.
The program is built on the idea that providing tax credits for installation of efficient products in existing homes and commercial buildings will help New Mexicans lower their monthly energy burden by lowering their utility bills, help fight climate change by reducing the emissions from operating the building or home, and improve community health through reduced health impacts from emissions. The credits even extend into the transportation sector with credits to help homes and businesses install electric vehicle charging infrastructure.
Under the program, homeowners and businesses are eligible for tax credits for the following actions:
- Energy Star heat pump installation.
- Energy Star heat pump water heater installation.
- Energy Star windows or doors installation.
- Improvements in insulation levels.
- Making the home or building electric vehicle ready.
In most cases, the program reimburses homeowners and business owners up to 50% off the cost of energy efficient upgrades. If the applicant is a low-income individual (a household making up to 200% of poverty level, or about $34,000 per year) or the home or building is serving as affordable housing, the project may be eligible for a larger tax credit. Businesses can receive the credit for lowering energy use by 50%. The credits are claimed as a refundable tax credit, meaning the taxpayer will receive the value as a tax refund.
“These refundable and transferable tax credits are doubled for low-income New Mexicans or affordable housing, in most cases paying 100% of the incremental costs for each measure. This is climate justice in action”, said clean energy leader, Ona Porter, of Prosperity Works.
Representative Kristina Ortez (D-42) of Taos, who championed this important climate bill, says “I’m pleased that all New Mexicans will now have the opportunity to improve the efficiency of their homes and businesses, while reducing climate change impacts and improving their comfort and safety, because of this tax credit. Low-income New Mexicans and affordable housing projects will receive double credits, which will go even further to helping those most in need.”
“We hope many New Mexicans will take advantage of these generous tax credits to improve the health and comfort of their homes, while reducing energy use and helping New Mexico reach our climate goals” said Tammy Fiebelkorn, New Mexico Representative for the Southwest Energy Efficiency Project.
The New Mexico Energy, Minerals and Natural Resources Department has posted the application form for tax credits. As long as a purchase was made from January 1, 2021 or later, New Mexicians will qualify.