Summary:

 House Bill 51 (HB 51) establishes two new tax credits: the Energy Storage System Income Tax Credit and the Energy Storage System Corporate Income Tax Credit. These credits incentivize individuals and businesses to install energy storage systems on residential, commercial, industrial, or agricultural properties in New Mexico. The bill sets a maximum annual certification cap of $6 million for both credits combined and includes provisions for credit eligibility, certification, and reporting. HB 51will apply to taxable years starting January 1, 2025, and ending on December 31, 2029. 

Legislation Overview:

 House Bill 51 (HB 51) aims to promote energy storage solutions through two tax credits: the Energy Storage System Income Tax Credit and the Energy Storage System Corporate Income Tax Credit. These credits apply to individuals and businesses that install energy storage systems on qualifying properties, encouraging the adoption of energy-efficient technologies and enhancing grid reliability in New Mexico. An energy storage system is a stationary, customer-sited system capable of retaining, storing, and delivering electrical energy using chemical, thermal, mechanical, or other means. It includes batteries or battery systems paired with on-site generation, tested and certified by a nationally recognized testing laboratory, and must have a rating of at least three kilowatt-hours.

Key Provisions:
The key provisions include tax incentives to encourage the adoption of energy storage systems. For individuals, an income tax credit of 40 percent is provided for the cost of purchasing and installing energy storage systems, with a maximum credit of $6,000 for residential properties. Nonresidential properties, including commercial, industrial, and agricultural properties, are eligible for a maximum credit of $150,000. Each property is limited to one eligible system. For corporate taxpayers, a corporate income tax credit is offered under similar terms, including the same maximum credit limits and eligibility criteria, to promote broader adoption across sectors.

Eligibility and Certification:
Taxpayers are required to apply for certification from the Energy, Minerals, and Natural Resources Department (EMNRD) within 12 months of installing an energy storage system. Applications must include proof of purchase and installation, documentation demonstrating compliance with safety and technical standards, and any other required supporting materials. The EMNRD certifies tax credits on a first-come, first-served basis, subject to an annual cap of $6 million.

Usage and Reporting:
Taxpayers are allowed to carry forward unused credits for up to five years. The credits are non-refundable and cannot be claimed for the same energy storage system under both the individual and corporate tax programs. The Energy, Minerals, and Natural Resources Department (EMNRD) and the Taxation and Revenue Department will coordinate on the certification process and provide an annual report on the fiscal impact of the credit as part of the state’s tax expenditure budget.

The bill is intended to support energy storage technologies like batteries, improving energy efficiency, and enabling grid stabilization. The provisions expire on January 1, 2031.
 

Current Law:

 There are no existing tax credits in New Mexico specifically targeting energy storage systems. Current state policies primarily support renewable energy generation, such as solar and wind, but lack direct incentives for energy storage installations. HB 51 addresses this gap by introducing dedicated credits to promote broader adoption of energy storage technologies. 

Amendments:

 Amended January 25, 2025 in HENRC

HENRCa/ HB 51: The House Energy, Environment and Natural Resources  Committee amends House Bill 51 as follows:

Language is added explicitly prohibiting taxpayers from claiming both the Energy Storage System Income Tax Credit (Section 1) and the Energy Storage System Corporate Income Tax Credit (Section 2) for the same energy storage system. This clarification is introduced on page 3, line 12, and mirrored on page 7, line 22, to ensure consistency across both tax credit sections. Additionally, the amendment strikes the provisions that allow unused portions of the tax credits to be carried forward for up to five consecutive taxable years. These changes appear on page 4, lines 4–7, for the income tax credit, and page 8, lines 14–17, for the corporate tax credit.

The effective date and delayed repeal provisions remain unchanged. HB 51 applies to taxable years beginning on or after January 1, 2025, and Sections 1 and 2 are repealed effective January 1, 2031.