Renewable Energy Projects FAQ

A. A Renewable Energy Financing District is created for the purpose of providing viable financing options to address the barrier of high upfront costs of renewable energy improvement. Many property owners do not have easy access to favorable conventional financing terms or sufficient cash reserve to commit to making these improvements, especially under the current economic conditions. The district aims to develop an alternative that will offer relative long term and low cost financing with repayment accomplished by a special assessment on property tax bills. Residential and commercial property owners will in turn be able to leverage this program to make renewable energy improvements in an accessible and affordable manner. Equally important, Santa Fe County residents will contribute significantly to climate change by reducing the carbon footprint and greenhouse gas emissions for the region. Property owners opt into the district and therefore participation is on a voluntary basis.

The 2009 New Mexico Legislative Session passed two important bills and signed by Governor Richardson to enhance opportunities for and encourage local residents and businesses to make renewable energy improvements. Senate Bill 647 (Renewable Energy Financing District Act) and House Bill 572 (Solar Energy Improvement Special Assessment Act), sponsored by Senator Peter Wirth and Representative Brian Egolf, respectively, provides leadership in response to development of renewable energy sources and positively impact the security, economic well-being and public and environmental health of the state, and contributing to energy independence.

A. There are several components of community benefits potentially supported by this program that include long term and ongoing financial, environmental and local economic impact.

On the financial level, property owners may yield energy costs savings and in situations where federal and state tax incentives are applied, affordability of the improvement will likely be enhanced as well. Currently, residents and commercial operators may qualify for PNM Renewable Energy Credits (REC’s) and this may also positively impact energy costs savings. In general, the intent of the district to offer long term low costs financing, along with energy savings, make the overall reduction to the costs of renewable energy improvement for the average community member possible.

Environmental impact reflects partly on how much fossil fuel can be avoided in generation of energy needed for local consumption in the region and the related efforts to reduce greenhouse gas emissions and address climate change. As example, a typical 3.4kW covering about 50% of a home’s energy use (habits and other factors will determine energy consumption and this is, therefore, variable) and assuming that the average kilowatt hour from PNM’s grid is produced in a way that releases approximately 1.504 pounds of CO2 into the atmosphere. As this system produces 5,624 kilowatt hours of electricity per year, the system would save 8,458 tons of carbon from going into the atmosphere. One kilowatt hour is equivalent to saving 3.412 kBTUs. This system’s production is therefore equivalent to 19,194 kBTUs.

Local economic effects may be observed by activities stimulated from renewable energy systems being installed and skilled workers being employed and trained in green jobs. This, in turn, is a vital part of the region’s transition into a green sustainable economy and in times where unemployment rate continues to rise and greater economic conditions remain challenging, local policy and program may offer a form of community- based economic stimulus working collaboratively with the natural environment, local resources and talents.

A. There will be an application process to qualify appropriate installations and property status. The county is currently developing processes in the most efficient and expedient manner. Application period will likely be defined within a set timeframe and the initial stage of the program may cap the number of systems. This attempts to ensure that adequate resources and program administration are available and effective at the initial stage of the program. Announcements related to the application and size of the program will be available in the near future.

A. Residential and commercial property owners may be eligible to opt into the district and qualify for installation of renewable energy improvements so long as the property is not in default or behind in property tax payments. The eventual district ordinance will address this issue in greater detail.

A. Qualified photovoltaic, solar thermal, wind and geothermal systems may be eligible. Guidelines are being developed and based on existing state, local or national standards to ensure quality control is addressed.

A. The application process establishes eligibility of both the property owner and the system proposed for installation. Subject to criteria being met and execution of all relevant agreements, the district will in turn finance the system and payments for the systems will be made to installers once all necessary inspections have taken place. The district has various options to capitalize the program including third party arrangement, issuance of taxable bonds, and/or access to federal tax credit bond authorizations, as available and feasible. The long-term goal of the program will be to achieve sustainable sources of funding and maintain low interest costs to eligible participants.

A. Both State and Federal incentives are available depending on the type of systems installed. Available Personal Tax Credits currently include, but not limited to, the following:

Federal: Established by the federal Energy Policy Act of 2005, the federal tax credit for residential energy property initially applied to solar-electric systems, solar water heating systems and fuel cells. The Energy Improvement and Extension Act of 2008 (H.R. 1424) extended the tax credit to small wind-energy systems and geothermal heat pumps, effective January 1, 2008. Other key revisions included an eight-year extension of the credit to December 31, 2016, the ability to take the credit against the alternative minimum tax, and the removal of the $2,000 credit limit for solar-electric systems beginning in 2009. The credit was further enhanced in February 2009 by The American Recovery and Reinvestment Act of 2009 (H.R. 1: Div. B, Sec. 1122, p. 46), which removed the maximum credit amount for all eligible technologies (except fuel cells) placed in service after 2008.

A taxpayer may claim a credit of 30% of qualified expenditures for a system that serves a dwelling unit located in the United States and used as a residence by the taxpayer. Expenditures with respect to the equipment are treated as made when the installation is completed. If the installation is on a new home, the "placed in service" date is the date of occupancy by the homeowner. Expenditures include labor costs for onsite preparation, assembly or original system installation, and for piping or wiring to interconnect a system to the home. If the federal tax credit exceeds tax liability, the excess amount may be carried forward to the succeeding taxable year. The excess credit can be carried forward until 2016, but it is unclear whether the unused tax credit can be carried forward after then. The maximum allowable credit, equipment requirements and other details vary by technology, as outlined below.

New Mexico provides a 10% personal income tax credit (up to $9,000) for residents and businesses (non-corporate), including agricultural enterprises, who purchase and install certified photovoltaic (PV) and solar thermal systems. Eligible systems include grid-tied commercial PV systems, off-grid and grid-tied residential PV systems, and (active) solar hot water or hot air systems. To be eligible, systems must first be certified by the New Mexico Energy, Minerals, and Natural Resources Department.

Applying available federal and state incentives may significantly impact the costs of financing renewable energy systems.

A. On July 28, 2009, the Board of County Commissioners adopted intent resolutions (2009-126 and 2009-127) to formally proceed with the creation of this policy and program. Steps are being taken to establish the structures (legal, financial and program) of the initiative and currently we have made considerable progress to enable the creation of the policy, via ordinance, by early to mid fall of 2009. Pending policy and program readiness and barring any unforeseen obstacles, we anticipate that application processes may begin in late October or early November. The county will continue to provide updates on a regular basis regarding the effective dates of the program.

A. To learn more about this program, or if you would like to place your name on a list for potential eligible applicants, please refer to our website at santafecounty.org and click on “Renewable Energy” or contact Duncan Sill via email at: dsill@santafecounty.org.