Advanced Energy Tax Credit Signed Into Law

The Advanced Energy Equipment Income Tax credit was signed into law by New Mexico Gov. Michelle Lujan Grisham in February 2024. The credit, effective Jan. 1, 2025, through the end of 2032, offsets up to 20 percent of the costs of equipment to produce components that qualify under the federal Inflation Reduction Act’s 45X provision for solar energy, wind energy, battery manufacturing, and rare earth element production. The credit is equal to 20 percent of qualified equipment costs up to a maximum of $25 million per project and capped at $25 million per year.

The credit includes clawback provisions if the facility stops operations for 180 days within two years of claiming the credit. The credit will be implemented by the Energy, Minerals and Natural Resources Department in partnership with the Departments of Economic Development and Taxation and Revenue.

Lucrative state incentives, like this new tax credit, when combined with New Mexico’s low cost of doing business and experienced manufacturing labor force have continued to drive new project announcements and in-market expansions for a wide range of manufacturers. This business-friendly manufacturing climate is why New Mexico had $1.3 billion in combined manufacturing project announcements in 2023.

The information above is courtesy of the New Mexico Partnership. Read the announcement and the Governor’s press announcement.