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New Jersey

New Jersey

Incentives/Policies for Energy Efficiency

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Clean Energy Solutions Large Scale CHP and Fuel Cells Program   

Last DSIRE Review: 09/29/2014
Program Overview:
State: New Jersey
Incentive Type: State Grant Program
Eligible Efficiency Technologies: CHP/Cogeneration, Heat recovery
Eligible Renewable/Other Technologies: Fuel Cells
Applicable Sectors: Commercial, Industrial, Nonprofit, Local Government, State Government, Fed. Government, Institutional
Amount:CHP less than 500 kW: $2.00 /Watt
CHP between 500kW- 1 MW: $1/ Watt
CHP between 1 MW-3 MW: $0.55/Watt (tiered)
CHP greater than 3 MW: $0.35/Watt (tiered)
Fuel Cells < 1 MW with waste heat utilization: $4.00/Watt
Fuel Cells < 1 MW without waste heat utilization: $3.00/Watt
Fuel Cells > 1 MW with waste heat utilization: $2.00/Watt
Fuel Cells > 1 MW without waste heat utilization: $1.50/Watt
Heat Recovery < 1 MW: $1.00/Watt
Heat Recovery > 1MW: $0.50/ Watt

Pay for Performance: Additional incentive of $0.25/ Watt
Maximum Incentive:CHP: $3,000,000 or 30% of project costs
Fuel Cells: $3,000,000 or 45% of project costs
Heat Recovery: $3,000,000 or 30% of the project costs
Pay for Performance: Capped at $250,000
Equipment Requirements:All systems must be new
CHP systems must achieve annual system efficiency of at least 65%
Fuels cells without heat utilization must achieve annual system efficiency of at least 50%
The systems must operate a minimum of 5,000 hours per year at full rated KW output (3,500 hours for eligible critical facilities)
Installation Requirements:Must be a stationary system installed on the customer side of the meter
It should be installed in NJ
Program Budget:$25 million
Start Date:01/17/2013 (current solicitation)
Web Site:

NOTE: Since June 20, 2013, the program has been managed by the NJ Board of Public Utilities (BPU) as a part of its Clean Energy Program. Applications should be directed to NJ BPU instead of NJ Economic Development Authority (EDA) who was previously was administering the program.


The New Jersey Clean Energy Program (NJCEP) offers grants for the installation of combined heat and power (CHP) or fuel cell systems to commercial, industrial, and institutional entities (including non-profits and public entities). In order to qualify for incentives, the applicant must be a contributor to the Societal Benefits Charge (SBC). Equipment must be commercially available, permanently installed, and installed on the customer side of the meter. Expansions of existing facilities may be eligible, though only the incremental expansion will be eligible for the incentive. Systems must have at least a 10-year all inclusive warranty or service contract and must be sized to meet the customer's electrical load (no more than 100% of historical annual consumption or peak demand). Third-party owned systems are eligible and must comply with the 10-year minimum warranty or service contract requirement.

Program Description:

The incentives amount depends on different size of the system. The grant amounts are as follows:


Incentive ($/W)

P4P Bonus Incentive ($/W)$250,000 maximum

$ cap

Maximum % of Project Cost

CHP Using Nonrenewable Fuel (microturbines, internal combustion engine, combustion turbine)

<500 KW: $2/Watt

500kW- 1MW: $1/Watt

1MW- 3 MW: $0.55/Watt

>3 MW: $0.35/ Watt


500kW-1MW: $2M

1MW-3MW: $3M

30% (or 40% with cooling application

Heat or Mechanical Recovery From Existing Equipment Using New Electric Generation Equipment

<1 MW: $1/Watt

>1MW : $0.50/ Watt


<1MW: $2M

>1MW: $3M


Fuel Cells With Waste Heat Utilization (non-renewable fuel)

<1 MW: $4/Watt

>1 MW: $2 /Watt


<1MW: $2M

>1MW: $3M



Fuel Cells Without Waste Heat Utilization (non-renewable fuel)

<1 MW: $3/Watt

> 1MW: $0.50/Watt

























Additional incentive of $0.25/ Watt (capped at $250,000) is offered for projects participating in Pay for Performance prior to applying to CHP or Fuel cell incentive.

Incentives for CHP facilities greater than 1 MW are tiered, meaning that a 4 MW CHP system would receive $0.55/Watt for the first 3 MW and $0.35/Watt for the remaining 1 MW. Other incentives are not tiered. Grants are limited to $3,000,000 per project. CHP projects are capped at 30% of the project costs, and fuel cell projects are capped at 45% of project costs. The program incentives are paid out in three payments- 30% upon purchase of equipment, 60% upon project installation, and 10% after a year of achieving performance thresholds.

In order to qualify for funding, projects are expected to use mature or emerging technologies that maximize energy production during peak demand periods with the least impact on the environment. The program will not support soft costs such as R&D or feasibility/engineering studies; equipment purchases or other activities associated with equipment that is not commercially viable; or building construction and land purchases. Under the current solicitation grant applications are reviewed and approved on a first-come, first-served basis. Proposed projects will be evaluated for funding based on readiness to proceed and efficiency; ability to create or maintain jobs; potential to reduce greenhouse gas (GHG) emissions; and the total energy to be created or saved. Please see the program web site for additional information and program materials.

  New Jersey Clean Energy Program
44 South Clinton Avenue
Post Office Box 350
Trenton, NJ 08625
Phone: (186) 666-5762 Ext.3
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Disclaimer: The information presented on the DSIRE web site provides an unofficial overview of financial incentives and other policies. It does not constitute professional tax advice or other professional financial guidance, and it should not be used as the only source of information when making purchasing decisions, investment decisions or tax decisions, or when executing other binding agreements. Please refer to the individual contact provided below each summary to verify that a specific financial incentive or other policy applies to your project.

While the DSIRE staff strives to provide the best information possible, the DSIRE staff, the N.C. Solar Center, N.C. State University and the Interstate Renewable Energy Council, Inc. make no representations or warranties, either express or implied, concerning the accuracy, completeness, reliability or suitability of the information. The DSIRE staff, the N.C. Solar Center, N.C. State University and the Interstate Renewable Energy Council, Inc. disclaim all liability of any kind arising out of your use or misuse of the information contained or referenced on DSIRE Web pages.

Copyright 2014 - 2015 North Carolina State University, under NREL Subcontract No. XEU-0-99515-01. Permission granted only for personal or educational use, or for use by or on behalf of the U.S. government. North Carolina State University prohibits the unauthorized display, reproduction, sale, and/or distribution of all or portions of the content of the Database of State Incentives for Renewables and Efficiency (DSIRE) without prior, written consent.