New Mexican utility proposes rooftop solar tax

The Public Service Company of New Mexico (PNM) electric utility wants to hit the owners of rooftop solar with a tax on new systems.

PNM yesterday (Thursday) proposed a rise in electric rates of $107.4 million to the New Mexico Public Regulation Commission and also requested a monthly solar rooftop tax of $6/kW to lessen the burden of paying to connect distributed generation solar which is currently laid on non-solar households.

According to the 2014 PNM rate case filing on the utility’s website, such a charge would amount to an interconnection fee of $18-30/month for the average rooftop system.

The rate base of $2.4 billion requested by the U.S. state’s largest electric power provider, a rise of $585 million on the last request, in 2010, is needed to pay for capital investments including the $79 million bill for four new solar centers by 2016, said PNM in its documents.

Solar bill more expensive than gas

The cost of that 40 MW of new solar compares unfavorably with the $56 million invested in the natural gas plant at La Luz, which will have the same generation capacity, but is a long way short of the $163 million cost of buying leases for Unit 2 of the Palo Verde nuclear generating station.

PNM also admits in its filing that rooftop solar systems have led to a reduction in costs, along with the energy efficiency measures taken by the utility and offered by modern appliances and the fall in demand across a state economy still recovering from the economic crisis.

If approved, the solar tax would apply to new rooftop systems installed from 2016 onwards.