New Mexico Solar Panel Laws: Your Rights and How to Cancel a Solar Contract

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.

Right to Cancel: New Mexico's Cooling-Off Period

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.

Federal FTC Cooling-Off Rule

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 Door-to-Door Sales Law (NMSA § 57-12-21)

New Mexico's door-to-door sales protections sit inside the Unfair Practices Act at NMSA § 57-12-21, titled "Door-to-door sales; contracts; requirements; prohibitions." Under that section, a buyer in a qualifying door-to-door sale generally may cancel the transaction until midnight of the third business day after the date of the transaction. The statute applies to sales of consumer goods or services with a purchase price of $25 or more that are solicited by the seller and agreed to at a place other than the seller's regular place of business, which typically includes an in-home solar sales presentation. It reaches cash and financed purchases alike, so it is generally not limited to credit sales.

Business days under this section generally exclude Sundays and federal holidays, so a Friday signing may leave you until midnight Wednesday. To cancel, the statute directs the buyer to mail or deliver a signed and dated copy of the cancellation notice, or any other written notice, to the seller's address on or before that deadline. New Mexico does not appear to provide a separate senior-citizen or age-based extension of this window.

What Counts as a Door-to-Door Sale in New Mexico

The cooling-off period typically applies when the sale was initiated through an unsolicited visit to your home. This generally includes:

• A solar salesperson knocking on your door without a prior appointment
• A sales presentation conducted in your home, even if you initially responded to an advertisement
• Transactions completed at temporary locations like trade shows, fairs, or hotel presentations

Sales completed entirely online or at a permanent business location may not be covered by the same cooling-off protections. NMSA § 57-12-21 also expressly excludes several categories, including sales made after prior negotiations at the seller's fixed retail location, buyer-initiated contracts for bona fide emergencies, buyer-initiated home repair or maintenance work, and sales of real property, insurance, or securities. However, some solar companies include voluntary cancellation windows in their contracts regardless of how the sale was made.

New Mexico Consumer Protection Laws for Solar

Beyond the cooling-off period, New Mexico has several consumer protection laws that may apply to solar contracts and sales practices.

New Mexico Unfair Practices Act (NMSA 57-12-1 et seq.)

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:

• Making false or misleading claims about energy savings or system performance
• Misrepresenting the terms of a solar lease, PPA, or loan agreement
• Failing to disclose material information such as escalator clauses, lien filings, or maintenance responsibilities
• Using high-pressure sales tactics or bait-and-switch methods
• Misrepresenting the company's licensing status or certifications
• Making false claims about state or federal incentives

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.

Contractor Licensing Requirements

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.

New Mexico Public Regulation Commission (PRC)

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.

Solar-Specific Regulations in New Mexico

Net Metering in New Mexico

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:

• Residential systems up to 10 kW typically qualify for standard net metering
• Larger systems may qualify under different interconnection tiers
• Credits are generally provided at or near the retail rate for qualifying customers
• Monthly credits carry forward and may be subject to annual true-up provisions
• Specific terms may vary by utility provider

Renewable Portfolio Standard and Solar Carve-Out

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.

Solar Tax Credits

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.

Interconnection Standards

New Mexico's interconnection standards establish the technical and procedural requirements for connecting a solar system to the grid. Key aspects include:

• Application and approval process through your utility provider
• Technical requirements for inverters, metering, and safety equipment
• Timelines for utility review and approval
• Insurance and liability provisions

Solar Rights Act

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.

Common Solar Contract Issues in New Mexico

Based on our research, the most common solar contract disputes in New Mexico typically involve the following issues:

How to Exit a Solar Contract in New Mexico

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:

Step 1: Review Your Contract Thoroughly

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.

Step 2: Determine If You Are Within the Cooling-Off Period

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 →

Step 3: Document Everything

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).

Step 4: Identify Potential Legal Grounds

Review whether any of the following may apply to your situation:

• Misrepresentation of savings, system performance, or contract terms
• Failure to provide the required notice of cancellation in a door-to-door sale (NMSA § 57-12-21)
• Deceptive trade practices under the Unfair Practices Act (NMSA 57-12-1 et seq.)
• Contractor licensing violations
• Breach of contract (failure to deliver promised performance)
• Misrepresentation of tax credits or incentives
• Failure to disclose UCC lien filings or other material terms

Step 5: File a Complaint with the New Mexico Attorney General

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.

Step 6: Explore Your Exit Options

Based on your contract terms and circumstances, your primary exit options in New Mexico include:

1. Contract buyout: purchasing the system at fair market value or a scheduled price per your contract terms
2. Transfer to a new homeowner: if you are selling your home, the buyer may assume the solar agreement (selling with solar guide →)
3. Negotiated settlement: working directly with the solar company to reach a mutually agreeable resolution
4. Legal action: pursuing rescission or damages (potentially treble damages under the Unfair Practices Act) through New Mexico courts (find a solar lawyer →)
5. Professional exit service: hiring a company that specializes in solar contract exits (see our rankings →)

Step 7: Consult a Qualified Attorney

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 →

New Mexico Attorney General and Consumer Protection Resources

Frequently Asked Questions