Craig O’Hare



Tired of dirty, climate-disrupting coal-fired electricity coming into your home every day? Go solar! Solar is a lot less expensive and a lot more cost-effective than most people realize.


Today there is a “perfect storm” of solar systems costing as much as 50 percent less than they did just five years ago, combined with the continued presence of substantial financial incentives. A 30-percent federal and 10-percent state income-tax credit (both good through 2016), sales tax exemption, and a PNM solar production incentive are all in effect.


Just a few years ago, rooftop solar panels were primarily the domain of the relatively affluent homeowner. But with rising electric rates, high propane bills, and steady declines in the cost of solar systems, solar has moved beyond those “early adopters” and become quite financially viable for the middle class. According to The Appraisal Journal, the scholarly journal of real estate valuation, a solar system can substantially increase the resale value of your home. This year Santa Fe Community College has been hosting green appraising workshops around the state to educate appraisers, lenders and realtors on the true value solar and other green building attributes (e.g. energy efficiency) add to a home.


There are two types of solar energy systems: 1) a solar photovoltaic (“PV”) system that converts the sun’s light (not heat) into electricity, 2) a solar thermal system that utilizes the sun’s heat for water heating or space heating. This article focuses on solar electric PV, but realize that solar thermal systems are also extremely cost-effective, particularly if you’re using electricity or propane to heat your water or living space.


What Size Solar System Should I Have?

There’s no right (or wrong) answer. Choosing the size of a solar PV system depends on the percent of your electricity use you want to generate from solar and/or your ability or desire to pay for the system outright or finance it via a loan. For a single-story home, the area of your roof is likely large enough to satisfy 100 percent of your electricity usage.


Is My House Good for Solar?

Absolutely! Our solar resource is “world class” throughout Santa Fe County. Solar systems work best on south-facing roofs, though east or west-oriented roofs may be suitable as well. There should be little or no shading from trees, buildings, or chimneys on or close to your home. PV systems are ideal on our area’s many flat roofs. Also, systems can be ground-mounted away from the house.


Financing My Solar System

If you can afford to simply pay for your solar system, that is likely your best financial option. If you need to finance your system, there are a number of loan options available with good interest rates and long terms. The longer the loan term, the lower your monthly payments. If your household income is less than $104,000 per year, look no further than Homewise, (505.983.9473, Homewise offers 4 percent loans for up to 30 years for solar- and energy-efficiency improvements. With those terms, the monthly reduction to your PNM electric bill will be about the same amount as your loan payment.


If you don’t qualify for a Homewise loan, consider an FHA-backed “PowerSaver Loan” with terms as long as 20 years ( If you’re refinancing your existing mortgage or buying an existing home (not a new home), consider a HUD/FHA “203K” mortgage that allows you to make a variety of home improvements (re-roofing, kitchen and bath remodels, adding insulation, new energy efficient windows, solar systems) and roll the costs into the 30-year mortgage. Only certain lenders do 203K loans, so be sure to shop around for one that does.


Also, be aware that some solar energy companies are currently offering a separate one-year interest-free loan for the amount of the 40 percent income tax credits. You just pay it off once you receive your refunds.


Two Financing Examples

A 3-kilowatt PV system will cost about $15,000 and generate about 450 kilowatt-hours per month, enough to meet 100 percent of the electricity needs for many Santa Fe homes.


  1. $6,000 anticipated tax credit amount covered by a 1-year, interest-free loan offer (no monthly payments), $9,000 financed at 6.5 percent for 20 years via a PowerSaver loan. Monthly loan payment: $67. Estimated initial monthly PNM utility bill reduction (including PNM’s 4 ¢/kwh “REC” incentive): $63. Your additional net monthly outlay is just $4! Furthermore, PowerSaver loans act as 2nd mortgages, making the interest payments tax-deductible.


  1. Finance the entire $15,000 amount using a 30-year, 4 percent Homewise loan. Monthly loan payment: $72. Net additional monthly outlay: just $9! However, in this example, you’ll receive a $6,000 refund when you do your taxes. At no cost, Homewise will allow you to pay down your loan with the $6,000, reducing the payments to $43, for a net monthly cash-positive benefit of $20!


Keep in mind that since your monthly loan payments are fixed, your net-monthly financial benefit increases as electricity costs increase over time. PNM’s electric rates have increased about 40 percent in the past 5 years. PV systems can be expected to generate electricity for 25 years or more.


How Does Solar Help the Environment and Our Local Economy?

Most of the electricity we use in New Mexico is generated by power plants that burn fossil fuels, mainly coal, a significant source of human-caused greenhouse gases (carbon dioxide). The emissions from these power plants contribute to air pollution, public health problems, and global climate disruption. The sun is a clean renewable source of energy that can help us protect our local and global environment and reduce our dependence on fossil fuels.


Rooftop solar generation also creates a dual benefit for our local economy: 1) directly creating local jobs using local solar energy companies, 2) keeping our energy dollars in the community further stimulating our economy via the “multiplier effect.”



Craig O’Hare is Energy Programs Specialist at Santa Fe County. For more information contact Craig at 505.992.3044,

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