TITLE 3 TAXATION
CHAPTER 3 PERSONAL
INCOME TAXES
PART 28 SOLAR MARKET DEVELOPMENT TAX
CREDIT
3.3.28.1 ISSUING AGENCY:
Energy, Minerals and Natural Resources Department, Energy, Conservation
and Management Division.
[3.3.28.1 NMAC - N,
7-1-06; A, 1-31-08]
3.3.28.2 SCOPE:
3.3.28 NMAC applies to the application and certification procedures for
administration of the solar market development tax credit.
[3.3.28.2 NMAC - N,
7-1-06]
3.3.28.3 STATUTORY AUTHORITY:
3.3.28 NMAC is established under the authority of NMSA 1978, Sections
7-2-18.14 and 9-1-5(E).
[3.3.28.3 NMAC - N,
7-1-06; A, 1-31-08]
3.3.28.4 DURATION:
Permanent.
[3.3.28.4 NMAC - N,
7-1-06]
3.3.28.5 EFFECTIVE
DATE: July 1, 2006 unless a later date is cited at
the end of a section.
[3.3.28.5 NMAC - N,
7-1-06]
3.3.28.6 OBJECTIVE:
3.3.28 NMAC’s objective is to establish procedures for administering the
certification program for the solar market development tax credit.
[3.3.28.6 NMAC - N,
7-1-06; A, 1-31-08]
3.3.28.7 DEFINITIONS:
A. “Applicant”
means a New Mexico taxpayer that has installed a solar energy system and that
desires to have the department certify the solar energy system pursuant to
3.3.28 NMAC so that the taxpayer may receive a state tax credit.
B. “Application
package” means the application documents an applicant submits to the division
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 division 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 taxpayer 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.
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. “Homeowner”
means a taxpayer that may obtain a permit limited to construction of
single-family dwellings, private garages, carports, sheds, agricultural
buildings and fences.
N. “Innovative”
means an alternative method or material that is not commercialized for use in a
solar energy system.
O. “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.
P. “Interconnection”
means connection of a photovoltaic system that an electric utility customer
operates to that utility’s distribution grid system.
Q. “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.
R. “Module”
means the photovoltaic system component that absorbs sunlight for conversion
into electricity.
S. “New”
means the condition of being recently manufactured and not used previously in
any installation.
T. “Non-residential”
means a business or agricultural enterprise.
U. “OG”
means operating guidelines that the solar rating and certification corporation
has or will establish including system performance or component characteristics
the SRCC defines in its directory.
Operating guidelines shall be from the directory in effect on July 1,
2006 and all successive revisions.
V. “Photovoltaic
system” means an energy system that collects or absorbs sunlight for conversion
into electricity.
W. “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.
X. “Solar
collector” means a solar thermal collector or photovoltaic module.
Y. “Solar
market development 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.
Z. “Solar
energy system” means a solar thermal system or photovoltaic system.
AA. “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.
BB. "Solar
thermal system" means an energy system that collects or absorbs solar
energy for conversion into heat for the purposes of space heating, space
cooling or water heating.
CC. “SRCC”
means the solar rating and certification corporation.
DD. “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.
EE. “State
tax credit” means the solar market development tax credit.
FF. “Taxpayer”
means the owner of a solar energy system and the residence, business or
agricultural enterprise where the solar energy system is located who applies
for certification of an operating solar energy system in order to receive a
state tax credit.
[3.3.28.7 NMAC - N,
7-1-06; A, 1-31-08; A, 7-16-09]
3.3.28.8 GENERAL PROVISIONS:
A. Only a New
Mexico taxpayer having purchased and installed an operating solar energy system
the department has certified is eligible for a state tax credit.
B. A corporation
shall not be eligible for certification of a solar energy system the
corporation owns under 3.3.28 NMAC’s requirements. A corporation may install a solar energy
system that complies with 3.3.28 NMAC’s requirements and sell the solar energy
system in a residence, business or agricultural enterprise to a taxpayer. If by this sale the taxpayer becomes the full
owner of both the solar energy system and the residence, business or agricultural
enterprise, and complies with 3.3.28 NMAC’s requirements, that taxpayer is
eligible for certification of that solar energy system.
C. A taxpayer
owning a solar energy system the department certifies shall locate that system
at the residence, business or agricultural enterprise that taxpayer owns. The taxpayer may rent a residence, business
or agricultural enterprise that the taxpayer owns to another entity.
D. The annual
aggregate amounts of the state tax credit available to taxpayers owning certified
solar energy systems is limited to $2,000,000 for solar thermal systems and
$3,000,000 for photovoltaic systems per calendar year. When the $2,000,000 limit for solar thermal
systems or the $3,000,000 limit for photovoltaic systems is reached based on
the total of taxpayers certified, the department will no longer certify
taxpayers, but will accept them for future consideration in the next year,
except for the last taxable year when the state tax credit is in effect. The division shall keep a record of the order
of receipt of all application packages.
E. In the event of
a discrepancy between a requirement of 3.3.28 NMAC and an existing New Mexico
regulation and licensing department or New Mexico taxation and revenue
department rule promulgated prior to 3.3.28 NMAC’s adoption, the existing rule
shall govern.
[3.3.28.8 NMAC - N,
7-1-06; A, 1-31-08]
3.3.28.9 APPLICATION:
A. To apply for a
state tax credit an applicant shall submit an application package to 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 the state tax
credit application form and any attachments required at the same time as a
complete application package. An
applicant shall submit one application package for each solar energy system. 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
3.3.28 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 taxpayer’s name,
mailing address, telephone number and social security number;
(2) the address where the
solar energy system is located, if located at a residence, business or
agricultural facility 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 or that an upgrade to an existing
system became operational, if applicable;
(5) if a contractor
installed the solar energy system, the contractor’s name, address, telephone
number, license category and license number;
(6) acknowledgement that
the homeowner 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 3.3.28 NMAC;
(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 3.3.28
NMAC;
(c)
applicant understands that there are annual aggregate state tax credit
limits in place for solar thermal systems and photovoltaic systems;
(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 3.3.28 NMAC; and
(f) to ensure compliance with 3.3.28 NMAC applicant agrees to allow the division or
its authorized representative to inspect the solar energy system that is
described in the application package at any time from the application package’s
submittal to three years after the department has certified the solar energy
system, upon the division providing a minimum of five days notice to the
applicant; and
(9) a project number the
division assigns to the application.
E. The
application form shall request the following as optional information provided
by the applicant:
(1) taxpayer’s email
address; and
(2) contractor’s email
address.
F. The
application form shall include optional selections where the applicant can
indicate interest in allowing the department to take the following actions:
(1) adding energy
monitoring equipment to the solar energy system;
(2) conducting an
analysis of solar energy system operation and performance; or
(3) conducting an
analysis of taxpayer’s utility bill records.
G. The
application package shall consist of the following information provided as
attachments:
(1) a copy of a current
property tax bill to the taxpayer 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
3.3.28 NMAC;
(4) a photographic record
of the solar energy system after installation is completed;
(5) a completed system
installation form;
(6) a
completed taxpayer and contractor statement of understanding that shall include
3.3.28.19 NMAC;
(7) 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 or, if SRCC has not certified the collector and the
application package is submitted on January 1, 2007 or later but before January
1, 2010, a copy of the application for solar collector certification form the
manufacturer has submitted to the SRCC and report status of SRCC certification
process;
(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;
(8) 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)
inverter capacity in kilowatts, if an inverter is a part of the system;
(f)
battery storage capacity in kilowatt-hours, if battery storage is a part
of the system; and
(g)
a copy of the signature and specifications pages of the fully executed interconnection
agreement with the electric utility if the photovoltaic system is
interconnected to a utility transmission line or distribution system; and
(9) other information the department needs to
evaluate the specific system type for certification.
H. The
completed system installation form shall include the following information:
(1) printed name of the
taxpayer who is identified on the application form,
(2) printed name, title and
telephone number of the contractor’s authorized representative, if applicable,
who approves the system installation form;
(3) printed name, title
and telephone number of the building code authority’s authorized
representative, if applicable, who approves the system installation form;
(4) date on which solar
energy system installation was complete and ready to operate;
(5) if a contractor
installed the solar energy system, a statement that the contractor’s authorized
representative has signed and dated, which may be a form of electronic
signature if approved by the department, agreeing that:
(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 3.3.28 NMAC’s certification requirements;
(c)
the date on which the solar energy system was ready to operate;
(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 taxpayer and which is near or at the solar energy system’s
array or balance of system components;
(6) a statement that the
building code authority’s authorized representative has signed and dated, which
may be a form of electronic signature if approved by the department, that the
solar energy system was installed in full compliance with all applicable codes;
and
(7) if the applicant is
unable to obtain a signed and dated statement from the building code
authority’s authorized representative on the system installation form, then the
applicant may provide one of the following instead:
(a)
a photograph or copy of the permit tag clearly identifying the building
code authority’s authorized representative’s signature, the date and the permit
number;
(b)
an official document from the building code authority that includes the:
(i)
agency’s name;
(ii)
authorized representative’s name, title, telephone number and signature;
(iii) date of authorized representative’s
signature; and
(iv)
permit number; or
(c) a web-based application the building code
authority approves.
I. The
division shall return an incomplete application to the applicant.
[3.3.28.9 NMAC - N,
7-1-06; A, 1-31-08; A, 7-16-09]
3.3.28.10 APPLICATION REVIEW PROCESS:
A. The department
shall consider applications in the order received, according to the day they
are received, but not the time of day.
The department gives applications received on the same day equal
consideration. If the department
approves applications received on the same day and the applications would
exceed the overall limit of state tax credit availability, then the department
divides the available state tax credit among those applications on a prorated,
net solar energy system cost basis.
B. The
division reviews the application package to calculate the state tax credit,
checks accuracy of the applicant’s documentation and determines whether the
department certifies the solar energy system.
C. If the division
finds that the application package meets 3.3.28 NMAC’s requirements and a state
tax credit is available, the department certifies the applicant’s solar energy
system and documents the taxpayer as eligible for a state tax credit. If a state tax credit is not available in the
taxable year of certification of the solar energy system submitted in the
application package, the division places the taxpayer on a waiting list for
inclusion in the following taxable year, if a state tax credit remains
available. The department provides
approval through written notification to the applicant. The notification shall include the taxpayer’s
contact information, social security number, system certification number, net
solar energy system cost eligible for the state tax credit, the state tax
credit amount and waiting list status, if applicable.
D. The division
reports 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 approval notification.
E. The applicant
may submit a revised application package to the division. The division shall place the resubmitted
application in the review schedule as if it were a new application.
F. The department
disapproves an application that is not complete or correct or does not meet the
approval criteria. The department’s
disapproval letter shall state the reasons why the department disapproved the
application. The applicant may resubmit
the application package for the disapproved project. The division places the resubmitted application
in the review schedule as if it were a new application.
[3.3.28.10 NMAC - N,
7-1-06; A, 1-31-08]
3.3.28.11 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) permitted and
inspected by the building code authority for building, electrical or mechanical
code compliance, as applicable to the type of solar energy system installed;
and
(5) a written final
inspection approval obtained from the building code authority after the solar
energy system’s installation, as applicable to the solar energy system type, or
alternative system approval as allowed by 3.3.28 NMAC.
B. The department
may certify a solar energy system that a taxpayer who is also the homeowner of
the residence at which the solar energy system is located has installed and
shall not certify a solar energy system that the owner of a non-residential
facility has installed.
C. Solar thermal
systems that the department may certify shall meet the following requirements:
(1) if installed at a
residence by a
(a)
contractor, installation by a certified mechanical journeyman who is an
employee of a company holding a valid New Mexico mechanical contractor license
provided, however, that an apprentice may work under a validly certified
journeyman’s direct supervision;
(b)
homeowner, installation by that homeowner who has met all the building
code authority’s requirements for obtaining a homeowner’s permit, including
passing a written examination for plumbing work the building code authority
administers;
(2) if installed at a
non-residential facility, installation by a certified mechanical journeyman who
is an employee of a company holding a New Mexico mechanical contractor license
provided, however, that an apprentice may work under a validly certified
journeyman’s direct supervision; and
(3) 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 - 5
NMAC), Solar Energy Code 14.9.6 NMAC, the New Mexico General Construction Building Codes (14.7.2 - 8 NMAC)
and any amendments to these codes adopted by a political subdivision that has
validly exercised its planning and permitting authority under NMSA 1978,
Sections 3-17-6 and 3-18-6.
D. Photovoltaic
systems that the department may certify shall meet the following requirements:
(1) if installed at a
residence by a:
(a)
contractor, installation by a certified electrical journeyman who is an
employee of a company holding a valid New Mexico electrical contractor license
provided, however, that an apprentice may work under a validly certified
journeyman’s direct supervision; or
(b)
homeowner, installation by that homeowner who has met all the building
code authority’s requirements for obtaining a homeowner’s permit, including
passing a written examination for electrical work the building code authority
administers;
(2) if installed at a
non-residential facility, installation by a certified electrical journeyman who
is an employee of a company holding a New Mexico electrical contractor license
provided, however, that an apprentice may work under a validly certified
journeyman’s direct supervision; and
(3) 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 NMSA 1978, Sections 3-17-6 and 3-18-6.
[3.3.28.11 NMAC - N,
7-1-06; A, 1-31-08; A, 7-16-09]
3.3.28.12 SOLAR COLLECTOR AND MODULE
ORIENTATION AND SUN EXPOSURE:
A. A solar energy
system array the department certifies shall have an azimuth angle or sun
exposure reduction due to shading or other factors that results in annual
energy production of the total solar energy system having a combined derating
of not more than 25 percent when compared to an ideal solar energy system at
the same location that has an unshaded array tilt equal to local latitude and
azimuth of true south. For cases in
which the combined impact of orientation and sun exposure of an array is
evaluated, the applicant shall estimate a derating using a department approved
method or model.
B. A
tracking array of a solar energy system that the department certifies shall
have a mechanism to track the sun so that the array absorber surface
consistently receives the sun’s direct beam at all times when the direct beam
of full sun is available, without requiring manual adjustment, except for a
solar energy system having the following tracking array control features:
(1) automatic and
intentional stowage of the array due to high velocity wind to avoid damage to
the array and its support structure;
(2) automatic and
intentional adjustment to off-direct-beam array orientations at low sun angles
to optimize the solar energy system’s annual energy production; or
(3) other automatic and
intentional array control features that demonstrate to the department’s
satisfaction that the solar energy system’s annual energy production is
optimized.
C. A
solar energy system that the department certifies shall have an array and
balance of system components that are automatically controlled to collect
sunlight or solar heat and deliver to an end use, without requiring manual
operation.
D. It
is the applicant’s sole responsibility to take action or meet the Solar Rights
Act’s requirements, if applicable.
[3.3.28.12 NMAC - N,
7-1-06; A, 1-31-08; A, 7-16-09]
3.3.28.13 MINIMUM SYSTEM SIZES, SYSTEM
APPLICATIONS AND LISTS OF ELIGIBLE COMPONENTS:
A. Solar energy
systems or their portions that the department may certify shall meet the
following requirements:
(1) be made of new
equipment, components and materials;
(2) if installed by a
contractor, have a written minimum two year warranty provided by the contractor on parts, equipment and labor
with the following exceptions;
(a) the warranty provided by the contractor on each specific piece of equipment shall not exceed the duration and conditions of the warranty provided by the manufacturer of the equipment against defects in materials and workmanship;
(b) in the case of an expansion of an existing system, the warranty provided by the contractor shall be limited to cover only parts, equipment and labor directly related to the upgrade or expansion; and
(c) the owner of the solar energy system shall bear the actual cost of shipping the product for the repair and replacement.
(3) be a complete energy
system that collects, converts and distributes solar energy to the residence,
business or agricultural enterprise it serves, unless requirements are met for
expansion of an existing solar energy system or replacement of an existing
solar energy system’s components;
(4) if an expansion of an existing solar
energy system, end use annual energy production of the new system shall be
increased in comparison to the existing system by the amount of the minimum
system size requirement and the contractor or homeowner shall provide a written
summary of the condition of each major component of the system;
(5) if replacement of one
or more components of an existing system, end use annual energy production of
the new system shall be increased in comparison to the system’s operation under
existing conditions and the contractor or homeowner shall provide a written
summary of the condition of each of the system’s major components; and
(6) if a specialty or
retrofit component is required for a complete solar energy system, then that
component shall be included as part of the solar energy system that is eligible
for department certification.
B. Solar energy
systems or their portions that the department shall not certify are as follows:
(1) a system or portion
of a system that uses non-solar or non-renewable sources in its operation, with
the exception of the following:
(a)
power necessary to provide for solar energy system components’
incidental electricity needs; and
(b)
non-solar or non-renewable sources that do not exceed 25 percent of the
system’s annual energy production;
(2) a system or portion
of a system that would be present if the solar energy system was not installed;
(3) a system that
increases an existing residence, business or agricultural enterprise’s average
annual energy consumption;
(4) a system that is
mobile and does not serve a permanent end use energy load or is not permanently
located in New Mexico;
(5) a system that is not
connected to a structure or foundation and does not serve a permanent end use
energy load or is not permanently located in New Mexico;
(6) a system or portion
of a system having one or more components not manufactured on a regular basis
by a business enterprise;
(7) a system installed on
a recreational vehicle;
(8) a system not serving
an end use energy load; or
(9) a system or portion
of a system that replaces a system or portion of a system the department has
certified in a previous application for a state tax credit.
C. The
department may disapprove a system type, solar thermal collector type,
photovoltaic module type or a solar energy system component if not listed in
3.3.28 NMAC for certification or may deem it innovative, if the applicant
requests in the application package.
D. Solar
thermal systems that the department may certify include:
(1) the system
applications of solar domestic hot water, solar space heating, solar air
heating, solar process heating, solar space cooling or combinations of solar
thermal system applications listed in 3.3.28 NMAC;
(2) the collector types
of flat plate, parabolic trough and evacuated tube; and
(3) the listed component
categories of collectors, pumps, fans, solar storage tanks, expansion tanks,
valves, controllers and heat exchangers.
E. A
solar thermal system component that the department may certify is a
photovoltaic system providing power for a solar thermal system component’s
incidental electricity needs. The
department shall not certify such a photovoltaic system as a separate solar
energy system eligible for a separate state tax credit.
F. Solar
thermal systems or their components that the department shall not certify are
as follows:
(1) a heating system or heating system
components necessary for a swimming pool or a hot tub;
(2) equipment sheds, wall
preparation, cabinetry, site-built enclosures, distribution piping and
associated installation costs;
(3) a building design
element used for passive solar space heating, space cooling, daylighting or
other environmental comfort attribute;
(4) a water quality
distillation or processing system;
(5) in a combined system,
the portions of the system not allowed to receive a state tax credit or for
which the department shall not certify the system;
(6) systems without
adequate freeze protection;
(7) systems incorporating drain down as a freeze
protection method; and
(8) systems without
adequate overheating protection.
G. Solar
thermal systems that the department may certify shall meet the following
requirements:
(1) minimum system size of 15 square feet of
solar collector aperture area;
(2) for solar domestic hot water systems
installed at a residence or business, a minimum of 50 percent of the total
domestic water heating load provided by solar energy;
(3) a collector that is:
(a)
listed as certified by the SRCC by OG-100 collector certification or
OG-300 system certification processes or, if collector is not certified by the
SRCC and application package is submitted on January 1, 2007 or later but
before January 1, 2010, submitted by the manufacturer to the SRCC for
certification and is active in the SRCC certification process;
(b)
if glazed, made of all-metal enclosures, absorber plates, fasteners and
fittings; aperture glazing of tempered glass; and fiberglass or
polyisocyanurate insulation; or
(c)
if unglazed, made of durable materials having a minimum 12 year warranty
period for full replacement; and
(4) all components
approved by an agency accredited by the American national standards institute,
if available for that specific component category.
H. Photovoltaic
systems that the department may certify include:
(1) the system
applications of direct power without battery storage, utility grid
interconnected without battery storage, utility grid interconnected with
battery storage, stand-alone with battery storage, stand-alone with utility
backup capability and water pumping;
(2) the flat plate module
types of crystalline, poly-crystalline or thin-film amorphous silicon;
(3) the listed component
categories of modules, inverters, batteries, manufactured battery enclosures,
charge controllers, power point trackers, well pumps, racks, sun tracking
mechanisms, performance monitoring equipment, communications, datalogging or
lightning protection; and
(4) disconnect components, safety components,
standard electrical materials and standard electrical hardware necessary for
the assembly of the listed component categories into a complete, safe and fully
operational system.
I. Photovoltaic
systems that the department may certify shall meet the following requirements:
(1) a minimum total array
power output of 100 watts direct current at manufacturer’s standard test
conditions; and
(2) all components listed
and labeled by a nationally recognized testing laboratory, if such listing is
available for that specific component category.
J. Photovoltaic
systems or their portions that the department shall not certify are as follows:
(1) a commercial or
industrial photovoltaic system other than an agricultural photovoltaic system
on a farm or ranch that is not connected to an electric utility transmission or
distribution system;
(2) power equipment
sheds, wall preparation, cabinetry, site-built battery enclosures, distribution
wiring and associated installation costs;
(3) the drilling, well
casing, storage tanks, distribution piping, distribution controls and
associated installation costs of a water pumping system; and
(4) a packaged product
powered by photovoltaic cells that a taxpayer purchased directly from a retail
business enterprise, is not custom designed, and does not require a permit from
the building code authority for installation, including watches, calculators,
walkway lights and toys.
[3.3.28.13 NMAC - N,
7-1-06; A, 1-31-08; A, 7-16-09]
3.3.28.14 INNOVATIVE SOLAR ENERGY SYSTEMS:
A. The department
may certify an innovative solar energy system.
B. A taxpayer shall
request that the department review an application package as an innovative
solar energy system.
C. The division
shall conduct a design review of a solar energy system when the taxpayer has
requested innovative status.
D. The department
may determine that a solar energy system is innovative if
(1) it does not include a
system application, component, packaged system, solar thermal collector type or
photovoltaic module type that the department may certify; and
(2) the division approves
the design.
E. Design approval
by the division does not indicate department approval of actual system
operation, energy production or code compliance.
F. The application
package of an innovative solar energy system shall include attachments in
addition to those required in other sections of 3.3.28 NMAC that fully describe
the solar energy system, as follows:
(1) a request for
innovative status and a description of the innovative feature;
(2) a design schematic detail of each system
application, component, packaged system, solar thermal collector type or
photovoltaic module type that makes the solar energy system innovative;
(3) a description of
system operation; and
(4) an energy analysis of
the solar energy system, including an estimate of annual energy production.
G. Innovative solar
energy systems that the department may certify shall meet all requirements of
3.3.28 NMAC, with the exception of the specific system application, component,
packaged system, solar thermal collector type or photovoltaic module type that
is to be installed.
H. The department
may approve an innovative component or system for inclusion on the department’s
list of certified components, if that component or system has been tested,
certified, approved or listed by the applicable organization for the specific
type of component or system and if such testing, certification, approval or
listing is available. Upon the
department listing a component or system as certified, subsequent applicants
are not required to submit that component or system as an innovative system.
[3.3.28.14 NMAC - N,
7-1-06; A, 1-31-08]
3.3.28.15 CERTIFICATION:
A. The purpose of
the department’s certification program is to evaluate certification of complete
solar energy systems for state tax credit eligibility that are comprised of
components and materials that are tested, certified, approved, or listed, as
applicable, by other organizations identified or referenced in 3.3.28 NMAC.
B. When a taxpayer
has installed a solar energy system, submits an application package, and
complies with 3.3.28 NMAC’s certification requirements, then the solar energy
system the taxpayer owns is eligible to receive department certification. The taxpayer shall submit a completed
application package.
C. For purposes of
monitoring compliance with 3.3.28 NMAC, the division or its authorized
representative shall have the authority to inspect a solar energy system owned
by a taxpayer who has submitted an application for certification, upon the
division providing five days notice to the taxpayer.
[3.3.28.15 NMAC - N,
7-1-06]
3.3.28.16 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.
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)
membership fees;
(j) financing costs or loan interest;
(k)
marketing, promotional or advertising costs;
(l)
repair, operating, or maintenance costs;
(m)
extended warranty costs;
(n)
system resale costs;
(o)
system visual barrier costs;
(p)
adjacent structure modification costs; and
(q)
vegetation maintenance costs;
(2) income, including:
(a)
payments the solar energy system contractor or other parties provide
that reduce the system cost, including rebates, discounts and refunds with the
exception of 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 division
shall make the final determination of the net cost of a solar energy system the
department certifies pursuant to 3.3.28 NMAC.
[3.3.28.16 NMAC - N,
7-1-06; A, 1-31-08]
3.3.28.17 CALCULATING THE STATE TAX CREDIT:
A. A state tax
credit to a taxpayer for a solar energy system the department has certified
shall not exceed:
(1) 10 percent of the net solar energy system cost as
provided in 3.3.28.16 NMAC; and
(2) $9000.
B. The total sum of
the state tax credit and the federal tax credit shall not exceed 10 percent of the net solar energy system cost.
C. The
taxation and revenue department shall make the final determination of the
amount of a state tax credit.
[3.3.28.17 NMAC - N,
7-1-06; A, 1-31-08; A, 7-16-09]
3.3.28.18 CLAIMING THE STATE TAX CREDIT:
A. To claim the
state tax credit, a taxpayer owning a solar energy system that the department
has certified shall submit to the taxation and revenue department a claim,
which shall consist of the notification the department issued to the taxpayer,
a completed claim form the taxation and revenue department has approved and any
other information the taxation and revenue department requires.
B. If the amount of
state tax credit claimed exceeds the taxpayer’s individual income tax
liability, the taxpayer may carry the excess forward for up to 10 consecutive
taxable years.
C. A taxpayer who
has both a carryover state tax credit and a new state tax credit derived from a
certified solar energy system in the taxable year for which the return is being
filed shall first apply the amount of carryover state tax credit against the
income tax liability. If the amount of
liability exceeds the carryover state tax credit, then the taxpayer may apply
the current year credit against the liability.
D. A taxpayer
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.
[3.3.28.18 NMAC - N,
7-1-06; A, 1-31-08]
3.3.28.19 CONSUMER INFORMATION:
A. If a contractor
installs the solar energy system, the contractor shall inform the taxpayer
about system design, installation, performance, operation and maintenance by
providing the following:
(1) prior to system
installation, a summary of the specific system type that meets all 3.3.28
NMAC’s requirements, the system’s capacity or size, and the system’s estimated
annual energy production;
(2) upon completion of
system installation, written operation and maintenance instructions, including
how to conduct simple diagnostic observations and tests to determine if the
solar energy system is working properly to produce energy;
(3) upon completion of
system installation, a written summary of operation and maintenance
instructions on one page, posted at an accessible location acceptable to the taxpayer and that is near or at
the solar energy system’s array or balance of system components; and
(4) upon completion of
system installation, written warranties in effect for equipment and
contractor’s labor, including their start and end dates and telephone, address
and website contact information, as applicable, for honoring or extending
warranties.
B. If the solar
energy system is a solar thermal system, the following information shall be
displayed:
(1) pump or fan status by
a visual indicator, as applicable;
(2) outlet temperature of
the collector loop;
(3) if a liquid
collector, the collector loop’s pressure; and
(4) the solar storage tank’s temperature, if
applicable.
C. If the solar
energy system is a photovoltaic system, the following information shall be
displayed:
(1) for all photovoltaic
systems, a visual indicator for operating status;
(2) for an electric
utility interconnected system without batteries
(a)
daily and cumulative energy production in kilowatt-hours alternating
current of the inverter output; and
(b) instantaneous power
output in kilowatts alternating current of the inverter output;
(3) for an electric
utility interconnected system with batteries, a method to enable real-time
evaluation of system power or energy production; and
(4) for a stand-alone
system with battery storage
(a)
voltage and amperes of module array; and
(b)
battery storage level.
[3.3.28.19 NMAC - N,
7-1-06; A, 1-31-08; A, 7-16-09]
3.3.28.20 INSPECTION OF SOLAR ENERGY
SYSTEMS:
A. The inspections
required through the application process for certification of a taxpayer’s
solar energy system are:
(1) inspection by the
building code authority for building, electrical or mechanical code compliance,
as applicable to the solar energy system type; and
(2) inspection for
compliance with electric utility company requirements for photovoltaic systems
that are interconnected to the distribution grid of that electric utility
company, if applicable.
B. For purposes of inspecting
the solar energy system’s installation,
the division or its authorized representative shall have the right to inspect a
solar energy system an applicant
owns and the department has certified, within three years after the
department’s certification, upon the division providing a minimum of five days
notice to the taxpayer.
[3.3.28.20 NMAC - N,
7-1-06; A, 1-31-08; A, 7-16-09]
HISTORY OF 3.3.28
NMAC:
Pre-NMAC History: None.
History of
Repealed Material: [RESERVED]