STATE SOLAR LAWS
New Mexico's abundant sunshine makes it a prime solar state — but rapid market growth has brought contract disputes. Here's what Land of Enchantment law says about your rights.
Updated March 2026 · Not legal advice · Our methodology
New Mexico ranks among the top states in the nation for solar energy potential, with some of the highest solar irradiance levels in the country. This natural advantage, combined with state incentives and a Renewable Portfolio Standard, has driven significant growth in residential solar installations. However, with that growth have come contract disputes, particularly around savings projections, contract terms, and exit options. This guide covers the key New Mexico laws that affect your solar contract, your cancellation rights, and your options for getting out of a solar agreement.
If you signed a solar contract in New Mexico through a door-to-door or in-home sales transaction, you generally have a right to cancel within a specific timeframe under both federal and state law.
The Federal Trade Commission's Cooling-Off Rule (16 CFR Part 429) provides a 3-business-day right to cancel for sales made at your home. This applies to most door-to-door solar sales where a salesperson visited your residence. The cancellation period runs until midnight of the third business day after the contract was signed.
New Mexico's Door-to-Door Sales Act provides specific protections for consumers who sign contracts as a result of door-to-door solicitation. Under NMSA 57-18-1 through 57-18-5, if a sale was solicited at your home, you generally have the right to cancel the transaction within three business days. The seller is required to provide you with a written notice of your right to cancel at the time of the sale, along with two copies of a cancellation form.
Key detail: Under New Mexico's Door-to-Door Sales Act, the seller must provide you with a clearly readable notice of your cancellation rights and two copies of the cancellation form. If the seller failed to provide this notice, or if the notice was deficient, your cancellation period may not have started running. This could potentially extend your right to cancel beyond the standard 3-day window. Consult a qualified attorney to evaluate your specific situation.
The cooling-off period typically applies when the sale was initiated through an unsolicited visit to your home. This generally includes:
Sales completed entirely online or at a permanent business location may not be covered by the same cooling-off protections. However, some solar companies include voluntary cancellation windows in their contracts regardless of how the sale was made.
Important: If you are within the cooling-off period, act immediately. Send your cancellation notice via certified mail and keep a copy for your records. Do not rely solely on phone calls or verbal cancellations. Pre-installation cancellation guide →
Beyond the cooling-off period, New Mexico has several consumer protection laws that may apply to solar contracts and sales practices.
New Mexico's Unfair Practices Act is the state's primary consumer protection statute and prohibits unfair or deceptive trade practices. In the solar context, this may include:
If a solar company engaged in deceptive practices during the sales process, you may have grounds for contract rescission, treble damages, or other relief under the Unfair Practices Act. In our assessment, this statute's provision for treble damages makes it one of the stronger consumer protection tools available to New Mexico solar consumers.
New Mexico requires contractors to be licensed through the Construction Industries Division (CID) of the New Mexico Regulation and Licensing Department. Solar installation work generally requires appropriate electrical and/or general contractor licensing. You can verify a contractor's license through the CID. If your solar installer was not properly licensed at the time of installation, this may affect the enforceability of your contract.
The NM PRC (transitioning to the Public Utilities Commission) oversees utility regulations that affect solar customers, including net metering policies, interconnection standards, and rate structures. The three main utilities regulated are PNM (Public Service Company of New Mexico), El Paso Electric, and Xcel Energy (Southwestern Public Service). If you are experiencing utility-related issues, the PRC may be able to assist.
New Mexico's net metering program allows qualifying solar customers to receive credits for excess electricity they export to the grid. The program has been shaped by the Solar Energy Development Act and subsequent PRC rulings.
Under current New Mexico net metering rules:
Net metering terms and credit rates may vary by utility. Contact your provider or the NM PRC for specific details about your account.
New Mexico has an aggressive Renewable Portfolio Standard under the Energy Transition Act, requiring utilities to achieve 100% carbon-free electricity by 2045. The state also has a solar-specific carve-out within its RPS. While these policies support solar growth, be cautious of sales representatives who misrepresent state renewable energy mandates as a reason to sign a long-term personal solar contract.
New Mexico has offered state-level solar tax credits in addition to the federal Investment Tax Credit. The specific credits available, their amounts, and eligibility requirements have changed over time. If a solar company made representations about tax credits during your sales process that were inaccurate, this may support a claim under the Unfair Practices Act.
New Mexico's interconnection standards establish the technical and procedural requirements for connecting a solar system to the grid. Key aspects include:
New Mexico's Solar Rights Act (NMSA 47-3-1 et seq.) protects homeowners' rights to install and use solar energy systems. The act establishes solar easements and may limit HOA restrictions on solar installations. If your HOA is creating issues related to your solar system, this statute may provide protections.
Based on our research, the most common solar contract disputes in New Mexico typically involve the following issues:
Despite New Mexico's excellent solar resource, some homeowners report savings that fall short of what was promised. Dust and sand accumulation, improper system sizing, and changing utility rate structures can all affect actual savings. If the sales representative made specific savings guarantees that have not materialized, this may constitute a deceptive practice under the Unfair Practices Act.
Solar leases and PPAs may result in a UCC-1 financing statement being filed with the New Mexico Secretary of State. Many homeowners are surprised to discover this lien when trying to sell or refinance. If the solar company did not clearly disclose the UCC filing, this may support a claim for rescission. UCC lien removal guide →
Solar door-to-door sales have been common in New Mexico's metro areas, particularly Albuquerque, Las Cruces, Santa Fe, and Rio Rancho. Common violations include failure to provide required cancellation notices under the Door-to-Door Sales Act, misrepresenting tax credits and incentives, and using high-pressure tactics. These violations may extend your cancellation rights or provide grounds for legal action.
Some solar companies have misrepresented the availability, amount, or terms of state and federal solar tax credits during the sales process. If you were promised specific tax benefits that were not available to you, or if the sales presentation conflated business incentives with residential benefits, this may constitute a deceptive practice.
Solar PPAs and leases commonly include annual price escalators of 1-3%. Over a 20-25 year contract, these escalators can cause your solar payments to exceed grid electricity costs. If the escalator was not clearly disclosed or if savings claims did not account for the escalator, you may have grounds for relief. PPA exit guide →
Dealing with a solar contract issue in New Mexico? Get a free preliminary review of your contract and options.
If you need to get out of a solar contract in New Mexico, the approach depends on your specific situation and how far into the contract you are. Here is a general step-by-step framework:
Start by reading your entire solar contract, including all addendums and attachments. Pay particular attention to the cancellation clause, buyout provisions, escalator terms, and any performance guarantees. Note all deadlines and required notice procedures.
If you signed your contract within the last 3 business days through a door-to-door sale, you may still be able to cancel at no cost. Send a written cancellation notice immediately via certified mail. Do not wait. Cancellation guide →
Gather all documentation related to your solar purchase, including the original contract, any amendments, sales materials, email correspondence, text messages with sales representatives, utility bills before and after installation, and any recordings of phone conversations (New Mexico is a one-party consent state for recordings).
Review whether any of the following may apply to your situation:
File a formal complaint with the New Mexico Attorney General's Consumer Protection Division. While this may not directly cancel your contract, it creates an official record of the dispute and may prompt the solar company to negotiate. The AG's office may also investigate patterns of complaints.
Based on your contract terms and circumstances, your primary exit options in New Mexico include:
We always recommend consulting with a New Mexico-licensed attorney who has experience with solar contract disputes before taking significant action. An attorney can evaluate the strength of your legal claims and advise you on the most effective strategy. Find a solar panel lawyer →
Important: We do not advise homeowners to stop making payments or breach contractual obligations. Failing to make payments could result in damage to your credit, collection actions, or acceleration of the full contract balance. Continue making payments while you explore your legal options.
New Mexico follows the federal FTC Cooling-Off Rule and the state Door-to-Door Sales Act (NMSA 57-18-1 et seq.), both providing a 3-business-day right to cancel for door-to-door sales. If the seller failed to provide required cancellation notices, the window may be extended. Always check your specific contract. Cancellation guide →
After the cooling-off period, direct cancellation is generally not available without cost. Options include a contract buyout, transferring the agreement to a new homeowner, or pursuing legal remedies. The Unfair Practices Act (NMSA 57-12-1 et seq.) may provide grounds — including treble damages — if deceptive practices were involved. Full exit guide →
New Mexico has net metering under the Solar Energy Development Act and PRC regulations. Qualifying solar customers may receive credits for excess electricity exported to the grid. PNM, El Paso Electric, and Xcel Energy administer their own net metering programs. Credit rates and terms may vary by utility and when your system was interconnected. Contact your utility or the PRC for specifics.
New Mexico has the Solar Rights Act, the Solar Energy Development Act, and general consumer protection via the Unfair Practices Act (NMSA 57-12-1 et seq.). The state also requires contractors to be licensed through the Construction Industries Division. The NM PRC regulates utility-related solar policies including net metering and interconnection.
File complaints with the NM Attorney General's Consumer Protection Division at (505) 490-4060 or (844) 255-9210. For utility issues, contact the NM PRC at (505) 827-4500. The Construction Industries Division handles contractor licensing complaints at (505) 476-4700. We recommend filing with all relevant agencies.
Get a free preliminary contract review or see which companies our editorial team recommends for solar exits.
Disclaimer: This guide is for informational purposes only and is not legal advice. Solar contract terms and exit options vary by contract, company, and individual circumstances. Results vary by individual situation. We do not advise homeowners to stop making payments or breach contractual obligations. SolarPanelExit.com and TRU Solar Cancellation share common ownership. Consult a qualified New Mexico-licensed attorney before taking action. See our Ownership Disclosure, Advertiser Disclosure, and Methodology.