New Mexico vs Arizona Solar Incentives: Which State Gets the Better Deal?
Side-by-side comparison of New Mexico and Arizona solar incentive programs in 2026: state tax credits, net metering rules, exemptions, payback period, and projected 25-year savings.
| Metric | NM · New Mexico | AZ · Arizona |
|---|---|---|
| Avg Monthly Bill | $115 | $195 |
| Peak Sun Hours / Day | 6.2 | 6.5 ◆ |
| Avg $/Watt Installed | $2.85 | $2.65 ◆ |
| State Tax Credit | 10% / $6000 | 25% / $1000 ◆ |
| Net Metering | retail | modified |
| SREC Market | No | No |
| Property Tax Exempt | Yes | Yes |
| Sales Tax Exempt | No | Yes |
| Payback, pre-credit model (yrs) | 7.8 | 6.4 ◆ |
| 25-yr savings, pre-credit model | $36,800 | $52,800 ◆ |
Payback and 25-year savings were modeled while the federal residential credit applied. They are not a 2026 quote. The calculator uses $0 federal credit and state incentives only.
State Tax Credit Comparison
New Mexico offers a 10% state income tax credit (capped at $6,000). Arizona offers a 25% credit (capped at $1,000).
Net Metering Policies
New Mexico: retail rate net metering active. Arizona: modified 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
New Mexico: $36,800 over 25 years (avg payback 7.8 yrs). Arizona: $52,800 over 25 years (avg payback 6.4 yrs).
Verdict: Which State Wins on Solar?
Arizona delivers stronger lifetime solar economics than New Mexico 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.