PNM Net Metering in New Mexico: How Solar Buyback Works in 2026
By TJ · Epex Home Performance
PNM offers true 1:1 net metering: every kilowatt-hour your panels push onto the grid is credited at the same retail rate you pay to pull power off it — currently around 15–16¢/kWh in the Albuquerque metro. Those credits never expire month to month; they roll forward on your bill indefinitely. A properly sized rooftop system can eliminate most or all of your electricity cost, making net metering the single most powerful financial mechanism for solar in New Mexico.
How Does PNM Net Metering Actually Work?
PNM's net metering program is true net energy metering, not net billing or a flat export tariff. That distinction matters. With net billing, utilities credit excess solar at a lower wholesale or "avoided cost" rate — often 3–6¢/kWh — instead of the retail rate. PNM does not do that for the portion of your output that covers your annual consumption.
Here is the mechanics in plain English. When your solar array produces more electricity than your home is using at that moment — say, at noon on a clear October day in the North Valley — the surplus flows backward through your smart meter and onto the grid. PNM registers that flow and credits your account at the full retail rate. When the sun sets and you draw power from the grid to run the refrigerator and the swamp cooler overnight, those credits offset what you owe. The net difference is what you pay.
According to EnergySage, the cost of electricity in Albuquerque as of June 2026 is 16¢ per kilowatt-hour, roughly 20% below the national average. That gap between Albuquerque's rates and the national average matters for payback math, but the 1:1 credit means every kWh of solar you generate is genuinely worth what you would have paid PNM to deliver it.
The Credit Rollover — No Expiration
Unused monthly net metering credits carry forward on your bill from month to month with no expiration. This is the feature that makes Albuquerque's solar economics work so well across seasons. Winter in Rio Rancho or Corrales means shorter days and higher heating loads, so many households run a credit deficit from November through January. The surplus banked during the long sunny months of April through September — when New Mexico's high desert sees 300+ peak sun hours per year, according to NREL — covers that seasonal shortfall.
One important limit: PNM credits excess generation at the retail rate up to 100% of your annual electricity consumption. Generation that exceeds your full-year usage is compensated at PNM's avoided-cost rate, which is substantially lower — roughly 2–5¢/kWh. This is why deliberately oversizing a system well beyond your actual load is rarely financially wise. Size your array to cover your annual consumption and you capture the full value of every kilowatt-hour.
What Does Net Metering Credit Look Like on a PNM Bill?
Your monthly PNM bill has a few moving parts once solar is connected. The meter measures gross import and gross export. PNM nets those against each other within the billing period. If net usage is positive — you consumed more than you generated — you pay for that net amount at the standard rate. If net usage is negative — you generated more than you consumed — that surplus is expressed as a kilowatt-hour credit balance that rolls to the next billing period.
You will still see a small unavoidable monthly charge on your bill. PNM's residential rate structure includes a fixed customer charge (sometimes called a customer service charge or basic monthly charge) that is not offset by net metering credits. This charge typically runs $5–$8 per month depending on your rate class. It is the cost of maintaining the physical connection to the grid. Every grid-tied solar customer pays it, and it is separate from energy charges.
| Bill Component | Offset by Net Metering? | Notes |
|---|---|---|
| Energy charges (kWh) | Yes — 1:1 at retail rate | Up to 100% of annual consumption |
| Fixed customer service charge | No | ~$5–$8/month, unavoidable |
| Excess annual generation | Partial — avoided-cost rate | ~2–5¢/kWh, well below retail |
| Demand charges (if applicable) | Partial | Mostly residential Rate 1A customers are not billed on demand |
Most Albuquerque homes on PNM's standard Rate 1A residential schedule pay no demand charge, so net metering credits address the bulk of the bill for a well-sized system.
How to Apply for PNM Net Metering Interconnection
You cannot flip a switch and start net metering on day one of installation. PNM requires a formal interconnection application and approval before your contractor energizes the array. The sequence matters — jumping ahead can create delays and compliance problems.
PNM's application process follows four main steps:
- Determine eligibility and goals. Confirm PNM is your utility (not a rural electric co-op), estimate your annual usage from past bills, and decide on system size.
- Find your contractor and design the system — but do not install yet. Your contractor needs to submit technical documents including a one-line electrical diagram, site map, and inverter specification sheet. The system design must be finalized before the application goes in.
- Submit the application and wait for PNM approval. For systems up to 10 kW AC — which covers the vast majority of Albuquerque residential installs — the application fee is $150. For systems 10–100 kW AC, the fee is $450. PNM reviews the application and may require a utility-side study for larger systems.
- Receive approval, install, pass inspection, then arrange for PNM's final sign-off. Your system cannot operate in grid-tie mode until PNM authorizes it in writing and installs or programs the appropriate meter.
A reputable local installer handles steps 2 through 4 on your behalf. If someone tells you to go ahead and flip the breaker while the application is pending, that is a red flag. Our solar installation team manages the entire interconnection process and does not energize a system without PNM's written approval in hand.
What About SRECs — Can PNM Customers Earn Solar Renewable Energy Credits?
This is one of the most common questions we hear from Albuquerque homeowners researching solar, and the honest answer has changed in recent years.
PNM operated a Performance-Based Solar Program — a utility-run SREC-like incentive — that paid customers $0.0025 per kWh (one-quarter of a cent) of production for the first eight years of system operation. That program was administratively closed to new applicants as of January 2023. If you installed solar in 2022 or earlier and enrolled, you may still be receiving those payments under an existing agreement. But for a new system installed in 2026, PNM's REC purchase program is not available.
According to the New Mexico Energy, Minerals and Natural Resources Department (EMNRD), New Mexico does not operate a state-mandated SREC market with tradable certificates the way some eastern states (New Jersey, Massachusetts) do. Voluntary SREC markets exist, but trading prices and program availability vary — treat any projected SREC income as speculative rather than bankable for payback calculations.
The practical takeaway: net metering credits are the primary financial mechanism for a grid-tied PNM solar customer in 2026. Do not count on supplemental SREC revenue when sizing your system or modeling payback.
What Incentives Are Still Available for PNM Solar Customers in 2026?
The incentive picture changed significantly at the end of 2025. The federal Section 25D Residential Clean Energy Credit — the 30% homeowner tax credit — expired on December 31, 2025. Systems installed and placed in service in 2026 by homeowners do not qualify. Any contractor or website still advertising a "30% federal solar tax credit" for a new 2026 homeowner-owned system is giving you outdated information.
For 2026, the financially meaningful incentive for most PNM customers is the New Mexico Solar Market Development Tax Credit (NSMDTC), administered by EMNRD. Here is how it works:
| Incentive | Amount | Cap | Refundable? | Who Administers |
|---|---|---|---|---|
| NM Solar Market Development Tax Credit | 10% of installed cost | $6,000 per taxpayer per year | Yes | EMNRD + NM Taxation & Revenue |
| PNM Net Metering | Retail-rate kWh credit | Sized to annual consumption | Ongoing annual savings | PNM |
| NM Property Tax Exemption | Added home value from solar excluded | No cap | Permanent | County assessors |
| NM Gross Receipts Tax Exemption | Solar equipment not taxed at point of sale | No cap | Applies at purchase | NM Taxation & Revenue |
The NSMDTC is refundable, meaning if the credit exceeds your state income tax liability, you receive the remainder as a refund. Apply through EMNRD's online portal within one calendar year of your installation date. You'll need proof of purchase, an itemized invoice for materials and labor, and documentation of the final inspection sticker.
For homeowners who want a federal incentive path in 2026, the only route is third-party ownership — a solar lease or power purchase agreement (PPA) where a company retains ownership of the array and claims the commercial clean energy credit (Section 48E). Under a lease or PPA, the third-party owner passes some savings to you in the form of a lower fixed rate for the power the panels produce. You give up ownership and the ability to claim the state tax credit yourself, so model both scenarios carefully before choosing. Read our complete breakdown of New Mexico solar incentives for 2026 for a side-by-side comparison.
Sizing Your System for Maximum Net Metering Value
The goal is to offset 100% of your annual electricity consumption without significantly overshooting it. Here is what that looks like for common Albuquerque home types:
| Home Size | Est. Annual Usage | Recommended System Size | Est. Annual Production | Est. Annual Bill Offset |
|---|---|---|---|---|
| 1,200 sq ft (older Northeast Heights) | 8,000–9,000 kWh | 5–6 kW | 8,500–10,200 kWh | 95–100% |
| 1,800 sq ft (Rio Rancho mid-century) | 11,000–13,000 kWh | 7–8 kW | 11,900–13,600 kWh | 90–100% |
| 2,400 sq ft (newer construction, Corrales) | 14,000–17,000 kWh | 9–11 kW | 15,300–18,700 kWh | 90–100% |
| 2,400 sq ft with EV charging added | 18,000–22,000 kWh | 12–14 kW | 20,400–23,800 kWh | 90–100% |
Production estimates assume south-facing panels at 15–20° tilt in PNM territory, based on NREL PVWatts data for Albuquerque (5.8–6.0 peak sun hours per day annual average). Actual results vary with shading, roof orientation, and panel degradation.
Adding battery storage changes the calculus slightly. A battery lets you use your own solar surplus during evening peak hours rather than exporting it and re-importing it later — useful when you have Time-of-Use rate considerations or want outage resilience, but it does not increase the net metering credit rate itself. Learn more in our solar battery backup guide.
High-desert UV in New Mexico is intense — panel degradation rates here typically run at the low end of manufacturer specs because heat, not UV alone, is the main degradation driver, and the dry climate reduces soiling losses. A quality panel warrantied for 0.5% annual degradation will still produce roughly 87–88% of its rated output after 25 years.
Frequently Asked Questions
Do PNM net metering credits ever expire?
Monthly rollover credits do not expire. They accumulate on your account and carry forward indefinitely. The only scenario where you lose money on excess generation is when your total annual production exceeds your total annual consumption — that surplus is compensated at PNM's avoided-cost rate (roughly 2–5¢/kWh) rather than the retail rate of ~15–16¢/kWh. Size your system to match your usage and this is not a concern.
Can I get net metering if I have a battery system?
Yes. PNM allows grid-tied battery storage systems to participate in net metering. The battery charges from your solar array first; excess generation beyond what the battery can store flows to the grid and earns net metering credits. Your installer must disclose the battery in the interconnection application. There is no penalty for having storage — it does not change the credit rate.
Is net metering available in Albuquerque if I'm not a PNM customer?
The vast majority of Albuquerque and the metro area — including Rio Rancho, Corrales, and most of the East Mountains — is served by PNM. Some rural pockets near the Sandias or in Valencia County fall under electric cooperatives like Central New Mexico Electric Cooperative (CNMEC), which has its own net metering terms. Always confirm your utility before designing a system. Santa Fe residents are also on PNM territory and qualify for the same program.
What happens to my net metering if PNM changes the policy?
New Mexico's net metering obligation is codified in the Renewable Energy Act (NMSA 1978 § 62-16) and enforced by the New Mexico Public Regulation Commission. The PRC has historically protected the retail-rate credit for existing customers even when rules evolve. Customers who interconnect under the current tariff are generally grandfathered on that tariff's terms for the life of their contract. That said, net metering policy is always subject to legislative and regulatory change — it is a real long-term risk worth acknowledging, not one worth losing sleep over given New Mexico's strong solar-policy track record.
How long does PNM interconnection approval take?
For a standard residential system under 10 kW AC that does not require a utility-side engineering study, PNM typically processes applications in 15–45 business days after receiving a complete package. Incomplete applications — missing the one-line diagram, inverter specs, or site map — restart the clock. Peak installation seasons (spring and fall) can push timelines toward the longer end. Your installer should submit a complete application on the first pass; rework is the most common source of delay.
Ready to Lock In Retail-Rate Net Metering Credits
The 1:1 retail-rate credit that PNM offers is one of the strongest solar buyback policies in the Southwest — and it works best when you get into it before any future policy shifts and while New Mexico's property and gross receipts tax exemptions are fully in place.
Schedule your free solar assessment with Epex Home Performance and we'll size your system to maximize net metering value, handle the PNM interconnection paperwork end-to-end, and walk you through the New Mexico Solar Market Development Tax Credit process so you don't leave money on the table.