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NMFA presents draft rules for $20 million Local Solar Access Fund, prioritizes rural projects and storage
Summary
NMFA presented draft rules for a $20 million Local Solar Access Fund created by HB 128: $16M for project grants (max $4M), $2M for technical assistance (max $200K each), a 60% rural allocation, and consultation with EMNRD on technical metrics and resilience requirements.
The New Mexico Finance Authority presented draft rules for a $20 million Local Solar Access Fund created by House Bill 128 and described how the agency will prioritize projects to expand solar energy systems and associated storage in underserved communities.
An NMFA presenter told the Oversight Committee the statute amended the NMFA Act to create two grant streams: project grants for planning, design, construction and installation of solar energy systems (including energy storage and interconnection equipment) and technical assistance grants to help communities with permitting, engineering and leveraging other funds.
Under the draft framework described to the committee, $16,000,000 of the appropriation is available for project grants (no single project may exceed $4,000,000) and $2,000,000 is reserved for technical assistance grants with individual awards capped at $200,000. The presenter said the statute and draft rules emphasize community benefit: grid resiliency for emergency facilities, reduction of energy burden for low‑income households and support for local workforce development in renewable energy construction and maintenance.
The rules also incorporate geographic limits intended to ensure distribution across the state: no more than 25% of the total fund can be awarded to any single county, and 60% of project grant dollars should go to rural areas (defined in draft rules as communities with population under 60,000). Eligible applicants include counties, municipalities, school districts, New Mexico land grants, Indian Nations, tribes or pueblos and councils of governments.
Representative Terrazas and others pressed NMFA on lifecycle and reclamation issues — asking whether the program should require bonding, reclamation funds or removal guarantees when projects end their useful life. The presenter said projects must meet applicable state and local environmental laws and suggested that reclamation is often handled through local landowner agreements, but acknowledged there is no statewide reclamation bond requirement in the statute and that NMFA will consult the Energy, Minerals and Natural Resources Department (EMNRD) on consistent practices.
Lawmakers also asked how NMFA will ensure outreach and access for tribal governments and small rural applicants. The agency said it will use its public information officers, partner with EMNRD, and deploy program managers and technical assistance to help applicants complete applications and meet prioritization criteria. NMFA described an internal project oversight team that will monitor project milestones and make progress‑based disbursements rather than up‑front full funding, with the goal of avoiding partially completed projects.
The presenter said NMFA plans to present final rules to the board and the Oversight Committee by November and hopes to open the application portal as early as December with programs standing up into early 2026. The committee was asked to review the draft rules and HB 128 and to send written feedback to NMFA staff.
What’s next: NMFA will continue rule and policy development in consultation with EMNRD, finalize application materials, conduct outreach (including language access and tribal outreach) and present materials for board and Oversight Committee action ahead of the statutory deadline for rules.
