SANTA FE, N.M.—Residential and commercial property owners will have a new option for financing solar power systems under a proposal approved Thursday by the House.

Under the bill, a homeowner or commercial property owner could use a special property tax assessment to repay a private loan for making a solar energy improvement, such as installing a photovoltaic system that generates electricity or a solar thermal system for heating water.

"This will remove the greatest hurdle to the expansion of solar in New Mexico," said Rep. Brian Egolf, D-Santa Fe, who sponsored the bill.

If the legislation is enacted, it will be optional for counties to establish the special assessment programs for solar energy improvements. Property owners would request a county to make the property tax assessment, which would be in an amount necessary to cover the solar system and administrative costs.

The legislation is patterned after programs in California and Colorado, although the New Mexico proposal is based on private financing rather than governmental bonding.