Why mandate and subsidize the same thing (solar)?

Legislation is moving through both New Mexico’s House and Senate that would provide a 10% state tax credit for rooftop solar installations for eight years with that tax credit reduced to 5% after that and the total credits offered by the state limited to $5 million annually.

This is bad policy for several reasons.

1) It is a special-interest subsidy that complicates New Mexico’s broken tax code and will push additional tax burdens onto those who rent or can’t afford a solar installation on their roof. The state tax credit would be on top of a recently-extended 30 percent federal tax credit on the value of solar projects;

2) With oil and gas revenues declining, New Mexico shouldn’t be offering $5 million subsidies to particular industries. It needs to be fiscally-responsible;

3) Most importantly, New Mexico law already mandates solar. The “renewable” mandate requires solar for 20% of all “renewables” while “distributed renewables” (almost entirely solar) account for 3% of RPS requirement.

In general, governments at all levels need to get out of the game of mandating and subsidizing various energy sources. If solar is really cost-competitive with other sources, by all means let it compete.