Taxation & Revenue committee tables HB51, a 40% energy-storage tax credit; debate centers on equity, safety and costs

Representative Sera Nana, sponsor of House Bill 51, presented a committee substitute proposing a nonrefundable tax credit to encourage installation of on-site energy storage systems.

The bill would add a new section to the income tax act and to the corporate income and franchise tax act to provide a tax credit equal to 40% of the cost to purchase and install a certified energy storage system placed in service on or after Jan. 1, 2025 and before Jan. 1, 2030, with maximum credits of $6,000 for residential properties and $150,000 for commercial, industrial or agricultural properties. The measure includes an aggregate annual certification cap of $6,000,000 and a carryforward provision allowing unused credits to be carried forward for up to five years. Taxpayers would apply for certification of eligibility from the named certifying agency within one year after the system becomes operational, and a taxpayer may not claim both the personal and corporate credit for the same property.

Why it matters: Supporters said on-site storage paired with rooftop solar increases household and community resilience during outages and wildfires, and helps integrate more renewables onto distribution circuits. Charles Goodmacher, registered lobbyist for Healthy Climate in New Mexico, told the committee the systems are “absolutely critical” for people who need refrigerated medicine during outages. Andrew Stone of the New Mexico People’s Energy Cooperative described batteries as a way to address daytime overproduction on distribution circuits and help form virtual power plants. Several business and advocacy witnesses — including Randy Sadwig of Positive Energy, Melissa Bernardin of Sierra Club Rio Grande Chapter and Glenn Schiffbauer of the Santa Fe Green Chamber of Commerce — urged passage citing resilience, job creation and broader clean-energy aims.

Support and technical background: Witness Jim Desjardins, identified as executive director of the Renewable Energy Industries Association of New Mexico, said New Mexico’s current storage attachment rate (about 1% of approximately 50,000 installed solar systems) lags the national average of roughly 10–12% and far behind California’s roughly 50%. The bill was described as designed to raise that attachment rate. The testimony also referenced the National Electric Code as the safety standard that applies to battery installations.

Concerns raised: Multiple committee members questioned the bill’s equity and fiscal targeting. Vice Chair Cadena and Representative Chandler said they worried the nonrefundable structure primarily benefits taxpayers with existing tax liability and could subsidize higher-income households or larger commercial buyers. Cadena noted changes from prior years, including raising the annual certification cap from $5,000,000 to $6,000,000 and expanding corporate eligibility. Representative Montoya raised fire-safety and insurance concerns tied to current lithium-ion battery systems, saying some insurers are reconsidering coverage for homes with certain battery installations; he called that a trend the committee should watch. Representative Duncan and others pressed for an income-tested approach or a separate bill to target low-income households, saying the likely early adopters are wealthier homeowners.

Technical and cost context mentioned in the hearing: testimony and committee discussion included these details from witnesses and members — a 3 kW minimum system was cited to align with federal standards; installed costs vary by system size (witnesses and members discussed examples in the roughly $10,000–$15,000 range for larger residential systems); batteries commonly carry 10-year warranties with options to extend toward 20 years; and New Mexico’s aggregate cap and certification process would require coordination with the certifying agency and the Taxation and Revenue Department for inclusion in the state’s tax-expenditure budget. The bill text as explained at the hearing also allows a certification program and requires the certifying agency to report certificates issued to the Taxation & Revenue Department.

Action: Vice Chair Cadena moved to table HB51 as amended; Representative Hernandez seconded. The committee did not record a roll-call vote on the motion in the transcript; the motion was adopted and the bill was tabled for potential inclusion in the session’s tax package.

What’s next: Committee members said they want more information about who currently benefits from storage incentives in the state (a map of installations was requested), the bill’s projected fiscal impact, and options to target low-income households. The sponsor said she and others would support reintroducing income-targeted language if it can be accommodated in the overall tax package.