(TNS) — New Mexico is expected to hit the $3 million solar tax credit limit for 2016 as early as Wednesday, six months before the end of the year when the credit is due to expire, according to the state’s Energy Conservation and Management Division.
There is $195,910 left to fund the credit, but officials have predicted that money will be gone by midweek because of the high volume of pending applications.
The state solar tax credit pays as much as 10 percent (up to $9,000) for solar photovoltaic or solar thermal systems operational after Jan. 1, 2009.
The state implemented the solar tax credit in 2006, but in 2015 Gov. Susana Martinez pocket-vetoed a measure that would have extended the credit to 2024. Similar legislation that would have extended the credit to 2019 died in a committee in the last legislative session, despite bipartisan support.
The extension would have allocated $5 million annually for residents who install solar systems at their home or business.
The average tax credit approved this year is $2,709, according to the division’s statistics, updated on Friday.
Homeowners and businesses that install solar can also benefit from a federal tax credit of 30 percent. Congress extended the credit, due to expire this year, to 2019.
The end of the state solar tax credit could have a negative effect on the job market, according to some solar advocates and industry watchers.
Sen. Mimi Stewart, D-Albuquerque, who co-sponsored legislation to extend the credit in 2015 and again this year with Rep. Sarah Maestas Barnes, R-Albuquerque, said on Monday she was not surprised the money for the tax credit to install photovoltaic systems will run out soon because it’s a popular program.
“We have had such a job growth in the industry because we have offered a state tax credit to go along with the federal tax credit,” she said
But now she says that without the state credit the solar job market “will slow down.”
Stewart said that in the next legislative session she plans to introduce legislation that would bring it back. But Republicans say the state tax credit doesn’t have that much impact on the industry because consumers can still take advantage of the federal credit.
Rep. James R.J. Strickler, R-Farmington, who voted against the 2016 bill, said he doesn’t believe that solar jobs will be lost. It’s not true, he said, “that a 10 percent tax credit will either make or break solar companies.”
He added that if the federal government can afford the higher 30 percent tax credit then “we should let the federal government take care of it.” But he acknowledged that “if the federal government didn’t renew their tax credit then I can see how it would be a problem.”
Strickler said the state needs to focus on the budget shortfall related to the drop in oil and gas revenues this year and the solar tax credit was a necessary sacrifice.
A study released earlier this year by North Carolina State University’s Clean Energy Technology Center, which tracks state incentives for renewable energy and energy efficiency, found “considerable uncertainty and volatility” in state policies, even as the industry is growing in different parts of the country.
In New Mexico, there currently are about 2,000 people employed in the solar industry, according to a report released earlier this year by the State Solar Job Census, a national nonprofit organization that researches solar energy and the industry.
While annual job growth in New Mexico is just 0.9 percent, solar employment growth is expected to reach 12.4 percent in 2016, just under the projected national rate of 14.7 percent.
According to the state’s Energy Conservation and Management Division, more than $140 million was invested in home and business solar systems in New Mexico from 2008-14 and $13.8 million in tax credits was issued by the state.
©2016 The Santa Fe New Mexican (Santa Fe, N.M.) Distributed by Tribune Content Agency, LLC.