Renewable energy tax breaks pull big public support in NM

Advocates are looking to jump-start home and business installation of green systems

By: - January 24, 2022 3:23 pm

(Photo by Xuanyu Han / Getty Images)

Three pieces of legislation offering tax incentives for renewable energy use saw broad support this weekend even as they were passed through committee on a partisan vote. 

One bill benefits New Mexicans with solar panel systems, another for those with geothermal systems and the third offers tax incentives to kickstart renewable energy storage systems at homes or businesses. People from conservation groups, local governments, tribes and energy business leaders voiced support for the measures.

Opposition focused on the small impacts these efforts have on climate change. For instance, the tax credit under House Bill 11 is capped at $1 million over the next two years, which supporters say would subsidize the install of 200 storage systems for solar energy.

Rep. Larry Scott (R-Hobbs) voted against all three pieces of legislation and in his argument fighting HB 11, he questioned advocates about the measurable adjustment to climate change the legislation would bring. 

Abbas Akhil, who testified in support of the bills, said while there is not a significant impact on climate expected from HB 11 alone, the effort is necessary to get the ball rolling on renewable energy in New Mexico.

Akhil served a term in the state House before choosing not to run for reelection last year. In his brief experience, he has already seen the makeup of the legislative body change how renewable energy is prioritized.

There is a shift. I think there's a better understanding in the Legislature of what needs to happen, and there are some definite champions.

– Abbas Akhil

He said passing HB 11 would mean homes or businesses would have a store of unused solar to use in a power outage or that could be shared with energy companies that fold it into their services. 

“So it is not really addressing climate change just by deploying 200 systems,” Akhil said. Instead, the legislation’s supporters are hoping that after renewable storage is introduced and costs come down, “this will take off on its own.”

HB 11 was passed by the House Energy, Environment and Natural Resources Committee on a 7-4 vote split along party lines. 

All Republicans on the committee also voted against a tax credit—$6,000 max— for anyone who installs solar panels and tax credits for people who install geothermal ground heat pumps.

Republican  arguments focused on the concern that tax breaks for renewables would  create dependence on state subsidies.

“These products that require state subsidies to be economically competitive eventually have to get weaned off,” Scott said. “And right now, I just don’t see that happening.” 

Scott didn’t mention the billions in state and federal subsidies that oil and gas industries receive in New Mexico. While oil and gas is responsible for the record budget surplus in the state, renewable energy advocates argue the industry is unstable — especially after anxious pandemic estimates pointed toward less production and a possible recession. 

Renewable energy tax credit bills:

HB 11: For storage systems

HB 34: For solar panels

HB 35: For geothermal systems

Of course, that didn’t happen, but the reliance on an unstable market is prominent in the argument for supporting measures like the tax incentives offered by HB 11, HB 34 and HB 35. Every small step is necessary, says Jim DesJardins, executive director of the Renewable Energy Industry Association New Mexico, because oil and gas money won’t last forever.

“It’s going to dry up in 10 years,” he said. “This is outside of the concerns about climate change, but just from a business standpoint, from a revenue standpoint, from the state we need to prepare to transition.”

Money seems to be the common ground for support across the aisle. Even Republicans who voted against the tax incentive bills acknowledged the potential for economic growth. While that may not follow the pressing need to address climate change, it can provide an entryway to get opponents on board, said Sammi Kao with Conservation Voters New Mexico.

“It’s not about the politics of climate change or anything,” she said. “It’s just about passing good policy that’s going to help New Mexicans integrate this kind of renewable technology into their lives in a way that helps the climate, that is good for the economy.”

Tom Solomon with the renewable energy advocacy group, said the urgency to boost this sector is key in the plan to get New Mexico’s power grid to 100%  renewable energy by 2050. Right now, it’s about 7%, he said. 

“Fifty percent cut by 2030 is kind of the benchmark that science has put out there for how much we have to cut carbon emissions. And getting 50% renewable by 2030 is basically the way you get there,” he said. “Renewable energy is still a bit more expensive than we’d like it to be. And if you can provide tax credits for lower income communities, then it allows people at that end of the economic scale to take advantage of it.”

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Shaun Griswold
Shaun Griswold

Shaun Griswold is a journalist in Albuquerque. He is a citizen of the Pueblo of Laguna, and his ancestry also includes Jemez and Zuni on the maternal side of his family. He grew up in Albuquerque and Gallup. He brings a decade of print and broadcast news experience. Most recently he covered Indigenous affairs with New Mexico In Depth. Shaun reports on issues important to Native Americans in urban and tribal communities throughout the state, including education and child welfare.