New Mexico: Keeping the “Community” in Community Solar
With program rules now in place, New Mexico is poised to create a solar market as unique and dynamic as the state itself!
New Mexico Setting a New Target
With some of the nation’s strongest solar resources, New Mexico is anticipating major growth in Community Solar (CS) generation. The state’s emerging program was specifically designed to keep their most vulnerable populations at the forefront and ensure residents and businesses benefit as the market grows. SunVest has been following the development of the program and is excited to help this market expand.
Regulators recently finalized rules for the program, which will result in building 200MW of CS by the end of 2024. With the program rules now in place, it’s time for big things to happen in the Land of Enchantment.
Bringing a Common Model to an Uncommon Land
Like other CS markets, the New Mexico program allows ratepayers to subscribe to a small (<5MW) solar facility connected to their local utility grid. Customers pay a subscription fee to the project owner (usually $/kWh) and the local utility gives them credit on their electric bill. Customers save on their power bills and receive a hedge against price increases. With natural gas prices on the rise, CS is expected to become even more attractive.
The first iteration of Community Solar in New Mexico is essentially a pilot program, with three investor-owned utilities sharing 200 MW of solar capacity based on their proportion of the state’s electric load. With this rationale, PNM Resources makes up the largest share of the market, even though other utilities cover more land area. See chart below.
Scoring Points for Solar
As in other emerging CS markets, there is already significant interest. Local and national developers, tribal entities, non-profits, and local communities are all exploring opportunities across the state.
To decide which projects will be built in this initial round, the state is ranking projects based on a series of developer and site characteristics. This points-based scoring system echoes programs in other states and includes certain criteria specific to New Mexico.
Focusing on Disadvantaged Communities
New Mexico has one of the highest poverty rates in the nation, so lawmakers ensured those populations would not be forgotten as Community Solar ramps up. The law requires CS projects to dedicate at least 30 percent of each project’s output to low-income ratepayers, and the program administrator will give further weight to projects that supply more low-income customers and help them maximize their savings.
Any person already benefitting from certain social service programs is deemed an eligible low-income customer and entire affordable housing projects can subscribe to a project at once. These measures make it easier and cheaper to find and enroll new customers, meaning developers can pass along the savings. SunVest is excited to explore opportunities to lower energy costs for these important customers.
Native Americans Benefits
Of course, New Mexico is rich with Native American culture, and the CS program reflects that. Projects owned by Native Americans or Pueblos will earn points, as will projects constructed by, or in partnership with, tribal communities.
SunVest has a long history of working with tribal communities, including the Chippewa in Wisconsin, the Akwasani in New York, and others. We hope to to assist tribal populations in New Mexico as well.
SunVest Brings Viability and Experience
Nobody benefits from an unfinished project, so New Mexico regulators built in provisions to ensure selected projects are likely to be completed. Capable developers with the financial and engineering expertise to build five megawatt projects receive preference under the rules, as do firms that understand how to manage subscribers and work with low-income populations. SunVest and our partners bring all of these skillsets and we look forward to a competitive selection process.
Selecting the Solar Sites
New Mexico has no shortage of land, but some parcels get an advantage. Sites with relevant land use permits, those located on municipal/county/state land or brownfields all earn points under the program. So does any project with local ownership, built on a rooftop or close to transmission lines. The preferences help achieve specific policy goals and/or help ensure the project is more likely to be built.
Partnerships and Innovation
Here’s another area that will really drive community involvement. The program gives points for projects and developers that provide workforce training and continuing partnership within a local community, school or non-profit. Finally, there are bonus points available for any project that demonstrates an “innovative commitment” to a community. By design, state regulators didn’t define what “innovation” looks like, so that’s up to all of us!
SunVest looks forward to working with the people and organizations of New Mexico to help create a brighter future and reduce energy burdens through solar energy. Together, we will harness the power of the sun for a sustainable future.
Contact us today to learn how your community can get involved!