New Mexico Register / Volume
XXXIII, Issue 23 / December 13, 2022
This
is an amendment to 3.3.14 NMAC, amending Sections 3, 7, 8, 9, 10, 11, 15, 17
and 19, effective 12/13/2022.
3.3.14.3 STATUTORY AUTHORITY: 3.3.14
NMAC is established under the authority of [Laws 2020, Chapter
13, Section 1] Section 7-2-18.31
NMSA 1978 and Section 9-1-5 NMSA 1978.
[3.3.14.3 NMAC - N, 8/25/2020;
A, 12/13/2022]
3.3.14.7 DEFINITIONS:
A. “Applicant” means a New Mexico taxpayer
that has installed a solar energy system at a residence, business or
agricultural enterprise that the taxpayer owns who desires to have the
department certify the solar energy system pursuant to 3.3.14 NMAC so that the
[tax payer] taxpayer may receive a state
tax credit.
B. “Application package” means the
application documents an applicant submits to the department for certification
to receive a state tax credit.
C. “Array” means the collectors of a solar
thermal system or the modules of a photovoltaic system.
D. “Balance of system” means portions of a
solar energy system other than the array.
E. “Building code authority” means the New
Mexico regulation and licensing department, construction industries department
or the local government agency having jurisdiction for building, electrical and
mechanical codes.
F. “Certified” or “certification” means department approval of a solar energy system,
which makes the applicant owning the system eligible for a state tax credit.
G. “Collector” means the solar thermal
system component that absorbs solar energy for conversion into heat or
electricity.
H. “Collector aperture” means the area of
a solar thermal collector that absorbs solar energy for conversion into usable
heat.
I. “Component” means a solar energy
system’s equipment and materials.
J. “Department” means the energy, minerals and natural resources department.
K. “Division” means the department’s
energy conservation and management division.
L. “Energy system” means an engineered system
that delivers solar energy to an end use by flow of fluid or electricity caused
by energized components such as pumps, fans, inverters
or controllers.
M. “Install” or “installation” means the direct work of
placing a solar energy system into service to operate and produce energy at the
expected level for a system of its size, which shall include completion of
any required final inspections or contractor certification of installation on
tribal or pueblo land.
[N. “Interconnection” means connection of a
photovoltaic system that an electric utility customer operates to that
utility’s distribution grid system.
O. “Interconnection agreement” means an
agreement allowing the applicant to interconnect a solar energy system of a
specified type and size to a suitable electric transmission or distribution
line.]
[P.] N. “Module”
means the photovoltaic system component that absorbs sunlight for conversion
into electricity.
[Q.] O. “New” means the condition of being
recently manufactured and not used previously in any installation.
[R.] P. “New solar market development income tax
credit” means the personal income tax credit the state of New Mexico issues
to a taxpayer for a solar energy system the department has certified pursuant
to 3.3.14 NMAC.
[S.] Q. “Non-residential” means a business or
agricultural enterprise.
[T.] R. “OG” means operating guidelines that
the solar rating and certification corporation has or will establish including
system performance or component characteristics as defined in the applicable
SRCC [defines in its] directory.
Operating guidelines shall be from the SRCC directory in effect
on March 1, 2006 [and all] or any applicable successive
revisions.
[U.] S. “Portable” means not permanently
connected to a residence, business or agricultural enterprise or connected to a
mobile vehicle that is a part of a residence, business
or agricultural enterprise.
[V.] T. “Solar collector” means a solar thermal
collector or photovoltaic module.
[W.] U. “Solar energy system” means a solar
thermal system or photovoltaic system.
[X.] V. “Solar storage tank” means a tank
provided as a component in a solar thermal system that is not heated by
electricity or a heating fuel.
[Y.] W. “SRCC” means the solar rating and
certification corporation.
[Z.] X. “Standard test conditions” means the
environmental conditions under which a manufacturer tests a photovoltaic module
for power output, which are a photovoltaic cell temperature of 25 degrees Celsius
and solar insolation of 1000 watts per square meter on the photovoltaic cell
surface.
[AA.] Y. “State tax credit” means the new solar market development income
tax credit.
[3.3.14.7 NMAC - N, 8/25/2020;
A, 12/13/2022]
3.3.14.8 GENERAL PROVISIONS:
A. Only a New
Mexico [applicant] individual taxpayer, business or agricultural
enterprise who has purchased and installed, on property they own, an
operating solar energy system [on property he or she owns and that]
the department has certified pursuant to 3.3.14 NMAC is eligible for a
state tax credit for the tax year
in which the system is installed.
B. An applicant
must own the residence, business, or agriculture enterprise on which the solar
energy system is located to qualify for the tax credit. The applicant may rent a residence, business or agricultural enterprise that the applicant owns
to another entity [The]; however,
the renter does not qualify for the tax credit.
C. The
annual aggregate amounts of the state tax credit available to applicants
owning certified solar energy systems is limited to [$8,000,000] $12,000,000
per calendar year. When the [$8.000,000]
$12,000,000 limit for solar energy systems is reached based on the total
of applicants certified, the department will no longer certify systems in that
year. Applications received after the
aggregate limit is reached shall not be approved and will be returned to
applicant. The department shall keep a
record of the order of receipt of all application packages to ensure the annual aggregate amount is not exceeded
in any given year.
D. In the event of
a discrepancy between a requirement of 3.3.14 NMAC and an existing New Mexico
regulation and licensing department or New Mexico taxation and revenue
department rule promulgated prior to 3.3.14 NMAC’s adoption, the existing rule
shall govern.
[3.3.14.8 NMAC - N, 8/25/2020;
A, 12/13/2022]
3.3.14.9 APPLICATION:
A. To apply for a
state tax credit an applicant shall submit an application
[package] for a certificate of eligibility to the division [through
a secure] using either a department-developed application or an approved
electronic [portal or by mail] application system as directed by the
division director. The department
will not accept applications submitted by [email] e-mail
unless specifically authorized by the division. An
applicant may obtain a state tax credit application form and system
installation form from the division.
B. An application
package shall include a completed state tax credit application form and written
attachments for a solar thermal system or photovoltaic system. [The applicant shall submit] To be
considered complete, an application must include the state tax credit
application form and any required attachments [required at the same
time as a complete application package], partial applications will not
be accepted. An applicant shall
submit one application package for each eligible solar energy
system. If there are multiple owners of
the property where the solar energy system is installed a joint
application must be submitted. [All
material submitted in the application package shall be capable of being
provided on 8½-inch x 11-inch paper.]
C. The application package shall meet
3.3.14 NMAC’s requirements. If an
application package fails to meet a requirement, the department shall
disapprove the application.
D. The
completed application form shall consist of the following information:
(1) the
applicant’s name, mailing address, e-mail address, telephone number and
social security number or employer identification number (EIN) provided
by a business or agricultural enterprise;
(2) the
address where the solar energy system is located, if located at a residence,
business or agricultural enterprise, or a location description if located at an
agricultural enterprise;
(3) the
solar energy system’s type and description;
(4) the
date the solar energy system [started continuous operation] was
installed;
(5) if
a contractor installed the solar energy system, the contractor’s name, address,
telephone number, e-mail address, license category and license number;
(6) acknowledgement
[that] the applicant installed the solar energy system, if applicable;
(7) the
net cost of equipment, materials and labor of the
solar energy system, excluding the expenses and income listed in 3.3.14 NMAC; and
(8) a
statement [that] the applicant signed and dated, which may be a form of
electronic signature if approved by the department, agreeing [that]:
(a) all
information provided in the application package is true and correct to the best
of the applicant’s knowledge;
(b) applicant
has read the certification requirements contained in 3.3.14 NMAC;
(c) applicant
understands that there is annual aggregate cap on available state tax [credit
limit] credits in place for solar energy systems and they are
only eligible for a credit in the year the system was installed;
(d) applicant
understands [that] the department must certify the solar energy system
documented in the application package before becoming eligible for a state tax
credit;
(e) applicant
agrees to make any changes the department requires to the solar energy system
for compliance with 3.3.14 NMAC; and
(f) to ensure compliance with 3.3.14
NMAC applicant agrees to allow the department
or its authorized representative to inspect the solar energy system [that is]
described in the application package at any time after the date of submittal of
the application package until three years after the department has certified
the solar energy system, upon the department providing a minimum of five days’
notice to the applicant.
E. [The
application form shall request
the following information from the applicant:
(1) applicant’s
email address; and
(2) contractor’s
email address.
F. ] The application package shall
consist of the following information provided as attachments:
(1) a copy of a current property
tax bill [to the applicant] or other equivalent proof of ownership in
the applicant’s name for the residence, business or agricultural enterprise
where the solar energy system is located;
(2) a copy of the invoice of itemized equipment and labor costs for the solar energy system;
(3) a
copy of the solar energy system’s design schematic and technical specifications
as described in 3.3.14 NMAC;
(4) a completed system installation form;
(5) if application is for a solar thermal
system, a completed solar thermal list form that includes the:
(a) manufacturer or supplier of system
components and their model numbers;
(b) number of collectors;
(c) collector aperture dimensions;
(d) orientation of collectors by
providing the azimuth angle from true south and tilt angle from horizontal;
(e) SRCC solar collector certification
identification number;
(f) a description of the freeze
protection;
(g) a description of overheating protection;
(h) thermal storage fluid or material and
its volume, if thermal storage is a part of the system and if the thermal
storage does not have energy provided from a non-solar or non-renewable source;
and
(i) manufacturer’s
specifications for collectors, if collectors are unglazed;
(6) if application is for a photovoltaic system, a completed solar
photovoltaic list form that includes the:
(a) manufacturer or supplier of major
system components and their model numbers;
(b) number of modules;
(c) module rated direct current power
output in watts under manufacturer’s standard test conditions;
(d) collectors’ orientation by providing
the azimuth angle from true south and tilt angle from horizontal;
(e) total inverter capacity in kilowatts, if an inverter is a part of the system; and
(f) battery storage size and capacity in
kilowatts and kilowatt-hours, if battery storage is a part of the system; and
[(g) the contract number and a copy of the
signature pages of the interconnection agreement with the electric utility if
the photovoltaic system is interconnected to a utility transmission line or
distribution system; and]
(7) other information the department
needs to evaluate the specific system type for certification.
[G.] F. The
completed system installation form shall include the following information:
(1) printed name of the applicant who is
identified on the application form;
(2) printed name, title and telephone
number of the contractor’s authorized representative, if applicable, who
approved the system installation form;
(3) printed
organizational name, e-mail address and telephone number of the building code
authority issuing the building permit, if applicable;
(4) date on which solar energy system
installation was [substantially] complete and [ready to operate] received
a passing inspection pursuant to applicable rules or code if applicable;
(a) the solar energy system was
installed in full compliance with all applicable federal, state and local
government statutes or ordinances, rules or regulations and codes and standards
[that are] in effect at the time of installation;
(b) contractor has read 3.3.14 NMAC’s certification requirements;
(c) the date on which the solar energy
system [was ready to operate] received a passing inspection pursuant
to applicable rules or code if applicable;
(d) the installed solar energy system will work properly with regular maintenance; and
(e) contractor provided written operations and maintenance instructions to the applicant and posted a one-page summary of these instructions in a sheltered accessible location acceptable to the applicant and which is near or at the solar energy system’s array or balance of system components; and
(6) the
building code authority’s permit number and issuance date, and date of
successful inspection, if applicable, noted on a physical form, photo
of inspection sticker or a web-based report the applicable building
code authority approves.
[3.3.14.9 NMAC - N, 8/25/2020;
A, 12/13/2022]
3.3.14.10 APPLICATION REVIEW PROCESS:
A. The department shall
consider complete applications in the order received. If the department receives multiple applications
on the same day that would cumulatively exceed the overall limit of state tax
credit availability, the department shall certify the first application
received for the last remaining tax credit.
B. The
department shall review the application package to calculate the state tax
credit, check the accuracy of the applicant’s documentation and determine
whether the department shall certify the solar energy system. The department shall disapprove an
application that is not complete, correct or does not meet the approval
criteria.
C. If the department
finds [that] the application package meets 3.3.14 NMAC’s requirements
and a state tax credit is available, the department shall certify the
applicant’s solar energy system and document the applicant as eligible for a
state tax credit. If a state tax credit
is not available in the calendar year when the application was submitted, the applicant
is notified [that] the program has reached the tax credit cap and their
application is not certified. The
department provides certification through written notification to the
applicant. The notification shall
include the applicant’s contact information, last four digits of the social
security number or EIN, system certification number and the state
tax credit amount.
D. The department shall
report to the taxation and revenue department the information required to
verify, process and distribute each state tax credit
by providing a copy of the department’s certification notification.
E. The applicant
may submit a revised application package to the department [The department];
however, the division shall place the resubmitted application in the review
schedule as if it were a new application unless the application is
disapproved because the annual cap has been reached.
F. [The
department shall disapprove an application that is not complete or correct or
does not meet the approval criteria. The
department shall also disapprove applications received after the annual cap for
that calendar year is reached. The] If
applicable, the department’s disapproval letter shall state the reasons why
the department disapproved the application. The applicant may resubmit the application
package for [the] a disapproved project [The department places
the resubmitted application in the review schedule], but it shall be
reviewed as if it were a new application.
[3.3.14.10 NMAC - N,
8/25/2020; A, 12/13/2022]
3.3.14.11 SAFETY, CODES AND STANDARDS:
A. Solar energy
systems [that] the department may certify shall meet the following
requirements:
(1) compliance with the latest adopted
version of all applicable federal, state and local government statutes or
ordinances, rules or regulations and codes and standards that are in effect at
the time that the applicant submits the application package;
(2) [compliance with all applicable
utility company or heating fuel vendor requirements, if the system being served
with a solar energy system is also served by utility electricity or a heating
fuel;
(3)] compliance with the
building code authority’s structural design requirements, as applicable to new
and existing structures upon which solar energy system components may be
mounted and support structures of solar energy system components;
[(4)]
(3) permitted and inspected
by the applicable building code authority for building, electrical or
mechanical code compliance, as applicable to the type of solar energy system
installed, if applicable; and
[(5)]
(4) a written final inspection
approval obtained from the applicable building code authority after the
solar energy system’s installation, as applicable to the solar energy system
type, if applicable.
B. Solar thermal systems that the department may certify
shall meet the following requirements:
(1) installation by a certified
mechanical journeyman who is an employee of a company holding a valid New
Mexico mechanical contractor license; and
(2) design, permitting and installation
in full compliance with all applicable provisions of the New Mexico Plumbing
Code 14.8.2 NMAC, the New Mexico Mechanical Codes 14.9.2 NMAC, Solar Energy
Code 14.9.6 NMAC, the New Mexico General Construction Building Codes, 14.7.2 to
14.7.7 NMAC and any amendments to these codes adopted by a political subdivision
that has validly exercised its planning and permitting authority under Sections
3-17-6 and 3-18-6 NMSA 1978.
C. Photovoltaic systems [that] the department may
certify shall meet the following requirements:
(1) installed by a certified electrical
journeyman who is an employee of a company holding a valid New Mexico
electrical contractor license; and
(2) design, permitting and installation
in full compliance with all applicable provisions of the New Mexico Electrical
Code 14.10.4 NMAC and any amendments to these codes adopted by a political subdivision
that has validly exercised its planning and permitting authority under Sections
3-17-6 and 3-18-6 NMSA 1978.
[3.3.14.11 NMAC - N,
8/25/2020; A, 12/13/2022]
3.3.14.15 CALCULATING THE SOLAR ENERGY
SYSTEM COST:
A. A state tax
credit shall be based on the equipment, materials and
labor costs of a solar energy system the department has certified.
B. The equipment, materials and labor costs of a solar energy system the
department certifies shall be documented [in writing] by an itemized
invoice.
C. The cost of a
solar energy system the department certifies shall be the net cost of acquiring
the system and shall not include the following:
(1) expenses,
including but not limited to:
(a) unpaid
labor or the applicant’s labor;
(b) unpaid
equipment or materials;
(c) land
costs or property taxes;
(d) costs
of structural, surface protection and other functions in building elements that
would be included in building construction if a solar energy system were not
installed;
(e) mortgage,
lease or rental costs of the residence, business or agricultural enterprise;
(f) legal
and court costs;
(g) research
fees or patent search fees;
(h) fees
for use permits or variances;
(i) design fees, permitting
inspection fees, review stamp fees and interconnection fees;
(j) membership
fees;
[(j)] (k) financing
costs or loan interest;
[(k)] (l) marketing, promotional
or advertising costs;
[(l)] (m) repair, operating
or maintenance costs;
[(m)] (n) warranty
or extended warranty costs;
[(n)] (o) system resale
costs;
[(o)] (p) system visual
barrier costs;
[(p)] (q) adjacent
structure modification costs, costs for building structures such as portals,
garages or pergolas to hold solar panels or costs for modifications
or roof repairs to hold solar panels; [and]
[(q)] (r) vegetation
maintenance costs including tree trimming; [or]
(s) contractor or inspector travel,
mileage or overnight hotel stays;
(t) recreational vehicle or hot tub
ports;
(u) trenching exceeding 50 feet; and
(v) donations to food banks on the
applicant’s behalf; and
(2) income,
including:
(a) payments
the solar energy system contractor or other parties provide that reduce the
system cost, including rebates, discounts and refunds except for federal, state
and local government and utility company solar incentives;
(b) services, benefits or material goods the solar energy system
contractor or other parties provide by the same or separate contract, whether
written or verbal; and
(c) other
financial incentives provided for solar energy system installation, if applicable.
D. The department
shall make the final determination of the net cost of a solar energy system the
department certifies pursuant to 3.3.14 NMAC.
[3.3.14.15 NMAC - N,
8/25/2020; A, 12/13/2022]
3.3.14.17 CLAIMING THE STATE TAX CREDIT:
A. An applicant shall apply for the state tax credit with the taxation and revenue department and provide the EMNRD certification and any other information the tax and revenue department requires within 12 months following the calendar year in which the system was installed.
B. [If the
amount of state tax credit claimed exceeds the applicant’s individual income
tax liability, the applicant may carry the excess forward for up to five
consecutive taxable years.
C.] An applicant claiming a state tax credit shall not claim a
state tax credit pursuant to another law for costs related to the same solar
energy system costs.
[3.3.14.17 NMAC – N,
8/25/2020; A, 12/13/2022]
3.3.14.19 INSPECTION OF SOLAR ENERGY SYSTEMS:
A. The [inspections]
only inspection required through the application process for
certification of an applicant’s solar energy system [are :
(1)] is an inspection
by the applicable building code authority for building, electrical or
mechanical code compliance, as applicable to the solar energy system type [;
and
(2) inspection for compliance with], if applicable. But an applicant should be aware their electric
utility company may have additional inspection requirements for
photovoltaic systems that are interconnected to the distribution grid of that
electric utility company [, if applicable]. The applicant is solely responsible for
compliance with such requirements.
B. [For purposes
of inspecting the solar energy system’s installation, the] The
department [or its authorized representative shall have] retains
the right to inspect a solar energy system [an applicant owns and the
department] it has certified, within three years after the
department’s certification, upon the department providing a minimum of five
days’ notice to [the] an applicant with a certified system.
[3.3.14.19 NMAC - N,
8/25/2020; A, 12/13/2022]