New Jersey

The New Jersey Clean Energy Program (NJCEP) offers the Pay for Performance incentive program for energy efficiency improvements in existing buildings with an annual peak electricity demand greater than 200 kilowatts (kW). Prior to September 2009 the program was only available for existing buildings, but has since been expanded to include new construction projects with a minimum of 50,000 square feet of conditioned space. With certain exceptions, new construction projects must be located with a New Jersey Smart Growth Area* in order to qualify for incentives.  
 
The program is funded by the state Societal Benefits Charge (SBC), hence it is generally only available to retail electric and/or gas service customers of the following New Jersey utilities that collect the SBC: Atlantic City Electric, Jersey Central Power & Light, Rockland Electric Company, New Jersey Natural Gas, Elizabethtown Gas, PSE&G, and South Jersey Gas.** Customers that purchase only natural gas from a participating utility are only eligible to receive incentives for natural gas measures. The program requires participants to use an approved Program Partner (see website for a list of approved partners) in order to receive incentives.  
 
Rather than offering specific rebate levels for specific equipment types, the Pay for Performance program calculates the performance incentive (Payments II and III below) as a variable $/kWh, $/therm, or $/sq. ft. incentive based on projected energy savings. Three separate payments exist based on the achievement of program milestones (described below). Incentive amounts are arrived at differently for existing buildings and new construction projects.  
 
Existing Buildings  
 
Incentive I: Completion of an approved Energy Reduction Plan that provides for a minimum source energy reduction of 15%. The incentive amount will equal $0.10/square foot of the project with a minimum incentive of $5,000 and a maximum incentive of $50,000, capped at 50% of the building's annual energy expenses. Participants must complete installation of the measures identified in the approved plan within 18 months or the incentive must be repaid.  
 
Incentive II: Installation of measures identified in the approved Energy Reduction Plan. The incentive amount for achievement of this milestone is $0.11-$0.13 per projected kWh savings and $1.10-$1.45 per projected therm savings. This portion of the incentive is capped at 30% of the total project cost.  
 
Incentive III: Verification of realized energy savings as a result of the installed measures. Achieving this milestone entitles the participant to collect an incentive of $0.07-$0.09 per kWh of electricity savings and $0.70-$1.05 per therm of natural gas savings. This portion of the incentive is capped at 20% of the total project cost.  
 
Bonus Incentives: Incentives II and III are doubled for hospitals, 501 (c)(3) non-profits, public colleges and universities, affordable multifamily housing, and local governments that have not received direct Energy Conservation Block Grants (ECBG) if 20% or more source energy savings is achieved. The cap will also be increased so that incentives II and III combined do not exceed 80% of total project cost.  
 
New Construction or Substantial Renovations  
 
Incentive I: The approval of a complete Draft Energy Reduction Plan that provides for a minimum energy cost reduction of 15% compared to ASHRAE 90.1-2004 entitles the customer to an incentive equal to $0.10/gross heated square foot of the project with a maximum incentive of $25,000. The incentive is contingent upon the project moving forward with construction.  
 
Incentive II: The approval of a complete Proposed Energy Production Plan that meets the minimum 15% energy cost reduction performance target entitles the customer to an incentive of $0.50 per heated square foot. The incentive is contingent upon the project moving forward.  
 
Incentive III: The approval of a complete As-Built Energy Reduction Plan and Commissioning Report which verifies that the building equipment meets the minimum criteria entitles the customer to an incentive of $0.75 - $1.00 per heated square foot, depending on the actual expected energy cost savings. Incentives II and III combined may not exceed 75% of total project incremental cost.  
 
Bonus Incentives: Incentives II and III are doubled for hospitals, 501 (c)(3) non-profits, public colleges and universities, affordable multifamily housing, and local governments that have not received direct Energy Conservation Block Grants (ECBG) if 20% or more source energy savings is achieved. The cap will also be increased so that incentives II and III combined do not exceed 80% of total project cost.  
 
Program participants may not receive incentives for improvements made prior to their enrollment in the program. Incentives are capped at $1 million per electric and gas account and $1 million per CHP system, for a potential Project cap of $3 million. For the five customer classes eligible for bonus incentives, total incentives will be capped at $2 million per site electric and gas account and $1 million per CHP system, for a potential Project cap of $5 million.  
 
Projects involving combined heat and power (CHP) are limited to $1 million per CHP unit per calendar year. CHP projects involve a separate application package and are governed by program rules and requirements in addition to those described above. Please see the program website or contact the program administrator for additional information on how this program works.  
 
 
*Click here to use the New Jersey Housing and Mortgage Finance Agency Smart Growth Locator tool.  
 
**Funding from the American Recovery and Reinvestment Act has made incentives available to customers of non-regulated utilities, such as municipal electric, oil, and propane providers.