Community Solar vs. Home Solar in New Mexico: Which Is Best?

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Residential vs. Community Solar in New Mexico: Which Is Best?

There are several ways to get solar, from purchasing residential solar to leasing to community solar. Each of these will fit different situations. Finding which works best for your personal situation is the first step to going solar. In this article, we’ll be taking a look at the different types of solar and when each one will be the right choice. Understandably, many people balk at the idea of leasing solar for their rooftops. Luckily, there are other ways to get solar for your home. 

Community Solar in New Mexico

Community solar is similar to leasing solar, but with some key differences. When you lease solar for your home, the panels are placed directly onto your roof and are under the control of the company. Purchasing solar from a community project, however, doesn’t have to be this way.

How Community Solar Works

With community solar, the panels are usually installed at a central location, such as a plant anchored at one key business. The total amount of energy produced by this solar plant is then transported onto the grid, where it gets distributed. The participants of the solar program are then credited for their energy use by the utility company. In return, you would pay a subscription fee to the community solar group.

An industry-leading website, SolarReviews.com, describes community solar as a big triangle. You pay the subscription fee to the solar plant, the solar plant sells the solar power to the utility company, then the utility company provides you with power. It’s the circle of life.

Benefits of Community Solar Programs

While this seems like a strange roundabout arrangement, there are some upsides to this model — depending on your living situation. 

For example, residential solar (whether leased or purchased) is essentially impossible for those who rent. Renters need their landlord’s permission to install solar at the residence and, even if you get that permission, you won’t get the benefits of solar when it comes time to move. Non-leased residential solar can increase your home’s value by four percent or more. However, if you’re renting, you won’t get that benefit.

When it comes to community solar, there’s no need to install the panels and other equipment on your home. Instead, you just need to persuade your landlord to make the switch to clean energy, after which your apartment will be powered by solar.

In a similar vein, community solar is good for those who plan on moving relatively soon. When you move after installing solar, you either have to contract with the company to remove the panels and reinstall them at your new home or you have to purchase an entirely new solar installation. 

When you have a community solar subscription, you still get clean energy while also not being encumbered by panels that need to be removed by professionals. This means much less stress when it comes time to move.

Finally, community solar is good for those who may own their home, but who don’t have a roof that’s suitable for solar. It may be surprising to some, but not every roof will work for a solar installation. Some of the factors that go into whether a roof is right for solar are how much shade it receives, the pitch of the roof, and whether the roof faces south or not.

For those who may have trees that shade their rooftops, a roof that mostly faces north or a roof at the wrong pitch for solar, community solar can be a valuable half-measure. You can still get clean, renewable energy without the ability to install solar on your roof itself.

Community Solar Act — What You Need To Know

New Mexico recently passed SB 84, the Community Solar Act. This act allows communities to construct solar plants in the operating zones of utility companies and energy cooperatives. Additionally, it mandates that at least 30 percent of the energy produced by these smaller community solar plants must be reserved for low-income subscribers. 

This act was specifically made with the intent to provide renewable energy to those who have traditionally been unable to afford it. Renewable energy advocates, business leaders, and tribal groups were contributors to putting it together. 

However, there is one downside to the Community Solar Act — it hasn’t been implemented yet. The rules for the act are still being hammered out, with legislators warning that community solar installations won’t be able to open until April 2022 at the earliest. Those who want to go solar now will have to go residential.

The Downsides of Leased Solar (a Form of Community Solar)

in New Mexico Let’s get this one out of the way first. Leasing solar panels for your roof is almost never the right move. Leasing panels for your rooftop doesn’t actually give you ownership over said panels — instead, they’re owned by the solar company you’re leasing from. Once the panels are installed on your roof, you then purchase the electricity from the installation company for a cheaper rate than you would through a conventional utility company. Leasing your panels comes with many downsides. As we mentioned above, you won’t own your panels. This means that the installer will be able to put the panels wherever they like on your roof — without your input. If you don’t like the placement, you’re out of luck. Removing the panels from your roof usually comes with a hefty fee. Additionally, the installer gets free power from your roof. Instead of storing the extra electricity in battery backups, such as the Tesla Powerwall, or selling the electricity back to your local utility through net metering, you send all that excess energy back to the installer. This means that you’re paying them for electricity while also giving them electricity for free.

Residential (Owned) Solar in New Mexico

The benefits of community solar for low-income New Mexicans and renters are impossible to deny. However, for homeowners in New Mexico, the story is completely different. Homeowners have access to roof space and solar installations that renters and those partaking in the community solar don’t, including the below benefits.

Residential (Owned) Solar May Increase Your Home’s Value

Even if you don’t plan on moving in the near future, a solar installation will increase your home’s value by a significant amount. In many states, this can be as much as a four percent increase — a potential gain of thousands of dollars. A trend across America is that potential homebuyers are willing to pay extra for a home with solar panels already installed. This means that adding solar to your home can have significant payoffs, even if you don’t plan on being in your home forever.

Owned Residential Solar Cuts Your Energy Bill More than Community Solar

Community solar can reduce your energy bill — residential solar can get rid of it completely. Energy prices fluctuate, but the trend has been a continual increase in the cost of electricity over the past few years. For those who stay tied to the grid, your energy bill will keep increasing year after year. 

Purchasing solar for your home insulates you from rising prices. Your energy bill payment will be replaced by your solar lease payment (or eliminated completely if you pay in cash). While you’ll still have a monthly payment for a few years, that payment will stay at a steady price instead of increasing constantly. Additionally, once you pay off your installation, you will no longer have any form of payment for your electricity. 

Residential Solar Brings Energy Independence

While community solar can set you free from large utilities, you’re still ultimately reliant on a third party to bring you power — in this case, the community solar plant. With residential solar, you’re taking your power into your own hands. Residential solar panels mean that you don’t have to rely on anyone but yourself for power. This is particularly true if you install a battery backup in your home and go completely off-grid

However, not everyone is willing or able to go off-grid with solar. Instead, they use solar to cut down on their energy bills and provide secure power during the day, then utilize the energy grid at night or when it’s cloudy. Those connected to the grid this way keep their bills low or nonexistent with net metering. This is where you sell excess energy produced by your panels back onto the power grid in exchange for credits on the electricity you use when your solar panels aren’t producing power. 

Incentives for New Mexico Residential Solar

One of the ways that New Mexico assists those who want to use solar panels is through its many incentives. These incentives have made it much easier for New Mexico homeowners to purchase solar in recent years.

One of the main incentives is the federal solar tax credit, a credit worth 26 percent of your installation, which is applied to your income taxes. New Mexico also offers a state-level tax credit, along with sales tax exemptions and other incentives. 

These incentives are another reason to go solar. Renewable energy in the US is constantly growing, largely because of the excellent incentives that are available for homeowners. New Mexico residents should take advantage of these incentives as soon as possible to ensure that they get the most out of their dollars. 

Community Versus Residential Solar: Who Wins?

Now that we have all the facts, it’s time to figure out which form of solar is superior. The answer is… it depends. For low-income New Mexicans and those who rent, community solar is clearly the superior choice. It gives you cheaper, renewable energy, with the downside that you don’t get any of the other benefits of solar. Renters may have difficulty convincing their landlord to switch, leaving you with electricity produced by fossil fuels. For homeowners in New Mexico, it’s the opposite. Residential solar greatly contributes to your property value, lowers your bills, and gives you energy security. If you take advantage of the incentives offered at the federal, state, and local levels, you can both save money and help the environment.

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