Arizona vs New Mexico Solar Incentives: Which State Gets the Better Deal?
Side-by-side comparison of Arizona and New Mexico solar incentive programs in 2026: state tax credits, net metering rules, exemptions, payback period, and projected 25-year savings.
| Metric | AZ · Arizona | NM · New Mexico |
|---|---|---|
| Avg Monthly Bill | $195 | $115 |
| Peak Sun Hours / Day | 6.5 ◆ | 6.2 |
| Avg $/Watt Installed | $2.65 ◆ | $2.85 |
| State Tax Credit | 25% / $1000 ◆ | 10% / $6000 |
| Net Metering | modified | retail |
| SREC Market | No | No |
| Property Tax Exempt | Yes | Yes |
| Sales Tax Exempt | Yes | No |
| Avg Payback (yrs) | 6.4 ◆ | 7.8 |
| Avg 25-Year Savings | $52,800 ◆ | $36,800 |
State Tax Credit Comparison
Arizona offers a 25% state income tax credit (capped at $1,000). New Mexico offers a 10% credit (capped at $6,000).
Net Metering Policies
Arizona: modified rate net metering active. New Mexico: retail rate net metering active.
Net metering is often the most economically significant solar policy because it determines how excess production is valued. Retail-rate states (where you receive full retail price for exported energy) have substantially better solar economics than avoided-cost or no-net-metering states.
Average 25-Year Savings
Arizona: $52,800 over 25 years (avg payback 6.4 yrs). New Mexico: $36,800 over 25 years (avg payback 7.8 yrs).
Verdict: Which State Wins on Solar?
Arizona edges out New Mexico on lifetime savings primarily due to higher solar irradiance.
Note: state averages mask significant within-state variation. Your specific utility, roof orientation, and household electricity profile drive your actual numbers — use the calculator to model your home directly.