Combined Heat & Power
One of the goals of the State of New Jersey is to enhance energy efficiency through on-site power generation with recovery and productive use of waste heat, and to reduce existing and new demands to the electric power grid. The Board of Public Utilities seeks to accomplish this goal by providing generous financial incentives for Combined Heat & Power (CHP) installations.
The following changes to the CHP Program will become effective on August 1, 2016:
- Incentives for Biopower CHP systems (100% renewable-fueled or mixed fuel systems)
- Clear program definitions around CHP and Waste Heat to Power (WHP) projects
- Fuel cell without Heat Recovery are suspended from participation until further notice
- Technology-neutral incentives
|Eligible Technology||Size (Installed Rated Capacity)||Incentive ($/kW)||% of Total Cost Cap per project||$ Cap per project|
|Powered by non-renewable or renewable fuel source||<500 kW||$2,000||30-40%||$2 million|
|Gas Internal Combustion Engine||>500 kW -
|Gas Combustion Turbine||> 1 MW - 3 MW||$550|
|Fuel Cells with Heat Recovery|
Incentives are tiered, which means the incentive levels vary based upon the installed rated capacity, as listed in the chart above. For example, a 4 MW CHP system would receive $2.00/watt for the first 500 kW, $1,00/watt for the second 500 KW, $0.55/watt for the next 2 MW and $0.35/watt for the last 1 MW (up to the caps listed).
- Pay for Performance (P4P) and comprehensive energy efficiency project adders and enhanced project caps have been eliminated
- 30/50/20 Incentive Payment Structure:
- 30% when equipment purchased
- 50% when system installed
- 20% upon acceptance and confirmation that the project is achieving the required performance thresholds based on twelve (12) months of continuous operating data submitted within 24 months of installation
- All new projects must contain cost-data for islanding capabilities, regardless of whether the project has islanding capabilities or not
- New Distributed Energy Resources (DER) Budget Category, which includes CHP, Renewable Electric Storage and Wind
Program details and applications will be available on August 1, 2016.