Does New Mexico Have Community Solar Laws?

New Mexico has emerged as one of the leading states in the Southwest for expanding access to community solar energy. In 2021, the state enacted the Community Solar Act (Senate Bill 84), creating a legal framework that allows residents and small businesses to participate in community solar projects without needing to install residential solar panels on their rooftops.

The program is regulated by the New Mexico Public Regulation Commission (PRC), which oversees project approvals, subscriber protections, and fair crediting for electricity produced by shared solar facilities. The Act officially launched the Community Solar Program in 2022, opening the market to third-party developers and utilities across the state.

Under the law, a community solar energy system can generate up to 5 megawatts (MW) and must have at least 10 subscribers. The PRC requires that at least 30% of each project’s capacity be reserved for low-income customers. This makes New Mexico one of the few states with a strong equity requirement built into its community solar legislation.

The law also directs the state’s regulated utilities, Public Service Company of New Mexico (PNM), El Paso Electric, and Southwestern Public Service (SPS), to implement programs allowing subscribers to receive monthly credits for their portion of the electricity generated. These bill credits reduce the subscriber’s energy costs while supporting clean energy production for the grid.

Low-income participation is a major focus of New Mexico’s program. Developers must file an Equity Participation Plan with every project proposal, outlining how they will recruit and serve eligible households. The state also partnered with the Energy, Minerals and Natural Resources Department (EMNRD) to expand outreach and education efforts for disadvantaged communities.

The PRC manages project applications, monitors subscriber contracts, and ensures transparency. It also reviews annual performance reports to verify compliance with low-income participation goals and customer-protection standards.

What Is Community Solar?

Community solar allows multiple households, renters, or small businesses to share the energy produced by a single solar array rather than owning individual rooftop panels. The electricity generated by the shared system flows into the utility grid, and each participant, called a subscriber, receives a credit on their utility bill proportional to their share of the solar generation.

Community solar farms are particularly beneficial for people who cannot install residential solar systems because they:

• Rent their homes or live in multi-unit buildings
• Have shaded or unsuitable roofs
• Lack the upfront capital to buy a system
• Want to support renewable energy without ownership responsibilities

By subscribing to a community solar project, participants gain access to renewable energy and long-term electricity savings without dealing with installation, maintenance, permitting, or equipment costs.

While residential solar offers property owners the advantage of ownership and full use of the federal solar tax credit, community solar provides broader accessibility. The main advantages include:

• No installation required: Subscribers don’t have to mount or maintain equipment
• Lower cost of entry: Most programs require little or no upfront investment
• Flexibility: Subscribers can move within the same utility area and keep their subscription
• Accessibility: Renters and condo residents can finally participate in solar
• Collective impact: A single community solar project can offset thousands of tons of carbon emissions each year

This shared-energy model allows solar benefits to reach communities traditionally excluded from the renewable-energy market.

Why Community Solar?

New Mexico’s investment in community solar stems from its desire to broaden renewable-energy access, reduce greenhouse-gas emissions, and make solar power more affordable. The state enjoys some of the nation’s best solar resources, with more than 280 sunny days per year, making it ideal for both residential solar and shared-solar installations.

The benefits of community solar are environmental, economic, and social. Environmentally, every kilowatt-hour generated by community solar farms reduces the need for fossil-fuel generation, cutting carbon dioxide and particulate emissions that contribute to climate change.

Financially, subscribers typically save 10 to 20% on their electricity bills, depending on project rates and subscription sizes. Since credits are automatically applied to utility accounts, savings appear as direct reductions in monthly electricity charges.

From a social perspective, community solar promotes equity by extending renewable energy to renters and low-income families. The 30% low-income participation requirement ensures that those who need energy savings the most can access them without major barriers.

For businesses, community solar provides predictable electricity pricing and helps meet sustainability goals without on-site installations. Schools, non-profits, and municipal agencies across New Mexico have also joined community solar projects to reduce operational costs and support state-wide clean-energy objectives.

Are There Community Solar Projects in New Mexico?

New Mexico’s community solar market has grown rapidly since the program launched. In 2023, the Public Regulation Commission approved the first 45 community solar projects totaling approximately 200 megawatts of capacity. These projects are expected to serve tens of thousands of subscribers when fully operational in 2025.

Many projects are located in areas served by PNM, including Albuquerque, Santa Fe, and Las Cruces, while others are spread across rural counties to promote statewide access.

Active and Upcoming Projects

Some of the major community solar projects approved or under construction in New Mexico include:

• Las Soleras Community Solar Farm (Santa Fe County): A 5-MW installation developed by Renewable Energy Systems (RES) Americas, designed to serve around 800 households
• Rio Rancho Solar Project (Sandoval County): Developed by Pivot Energy, this site focuses on mixed residential and low-income subscribers
• Mesilla Valley Solar Garden (Doña Ana County): A 3-MW community solar farm providing discounted subscriptions to low-income residents through El Paso Electric’s service area
• Curry County Cooperative Solar Project: A rural cooperative model designed to demonstrate local ownership of community solar energy systems
• Valencia Community Solar Garden: Developed by Soltage and serving residential and small business customers through PNM’s grid

Together, these projects showcase how the New Mexico community solar program combines public oversight and private development to create diverse energy options for residents across the state.

Residents can subscribe to community solar farms through project developers or their local utility. The enrollment process typically includes:

• Selecting an available community solar project within their utility service area
• Signing a subscription agreement that defines their energy allocation; and
• Receiving monthly credits on their utility bill for their share of solar generation

There are no property-ownership requirements, and most subscription contracts are flexible or transferable. Some programs even allow cancellation without penalty after a short notice period.

How Does Community Solar Work in New Mexico?

To understand how community solar works, it helps to visualize how the electricity flows from the shared array to subscribers’ homes. A community solar project consists of hundreds or thousands of photovoltaic panels installed on leased land or large commercial rooftops. The system connects directly to the utility’s distribution grid.

As sunlight hits the panels, the system generates direct-current (DC) electricity, which is converted into alternating current (AC) power through inverters and fed into the local grid. The utility measures the total production, assigns each subscriber a proportional share, and applies credits to their bills.

This process follows New Mexico’s Virtual Net Metering framework, which allows credits to be calculated at the retail rate of electricity. The result is a straightforward billing process that makes participation easy for consumers.

Subscribers do not need to change their electricity provider or install any special equipment. The community solar energy credits appear automatically on their monthly utility statements.

New Mexico’s program also supports federal and state incentives that make projects more affordable:

• Federal Investment Tax Credit (ITC): Developers can claim a 30% tax credit, lowering project costs and enabling cheaper subscription pricing
• State Renewable Energy Production Tax Credit: Although primarily for large-scale installations, it indirectly benefits community solar projects by encouraging local investment
• Renewable Energy Certificates (RECs): Projects generate RECs for every megawatt-hour of solar energy produced, creating an additional revenue stream that helps maintain low subscriber costs

Together, these mechanisms ensure that community solar farms deliver competitive pricing while supporting statewide renewable-energy goals.

How Much Does Community Solar Cost in New Mexico?

The community solar cost for New Mexico residents depends on the size of their subscription and the project’s rate structure. Most programs follow a pay-as-you-go model, where subscribers pay for the energy their share produces at a rate slightly below the local utility’s retail price.

As of 2025, the average retail electricity rate in New Mexico is around $0.14 per kilowatt-hour (kWh). Community solar subscribers generally pay between $0.11 and $0.13 per kWh, yielding an average savings of 10% to 20% each month.

Some developers offer flat-rate or fixed-discount plans. Below is an approximate breakdown of community solar cost for different household types in the state:

These costs include access to clean-energy generation, grid connection, system maintenance, and administrative services. Subscribers do not own the equipment but receive full financial and environmental benefits proportional to their share.

For low-income residents, the state’s community solar rules guarantee dedicated capacity and discounted rates. Developers offering low-to-moderate income (LMI) subscriptions must ensure that participants save at least 20% annually compared to standard utility rates.

Programs supported by EMNRD and local non-profits often cover enrollment fees and provide simplified sign-up assistance. This ensures that community solar participation remains inclusive and affordable for all New Mexicans, regardless of income or housing situation.

New Mexico’s strong sunshine, clear regulatory framework, and equity-based design make its community solar program one of the most forward-thinking in the country. With over 200 MW of new capacity under development, the state continues to demonstrate how shared solar can bring clean, low-cost power to everyone, from rural cooperatives to urban renters, without the barriers of traditional rooftop systems.