Incentives are available for Combined Heat and Power and Fuel Cell systems with recovery and productive use of waste heat that are located on-site. The eligibility and incentive details provided below are associated with systems of any size. Incentives are limited to the first MW of capacity. For Information on larger scale projects, or those using Biopower, please visit the main CHP web page.

Eligibility

To qualify for a CHP or Fuel Cell incentive, the following eligibility requirements must be met:

1. CHP system may be of any size to apply, but incentives are limited to the first megawatt of installed capacity. The Board of Public Utilities has proposed a solicitation for large scale CHP and fuel cell projects. For systems greater than 1 MW and seeking larger incentives, please refer to BPU grants.

2. The CHP or Fuel Cell system must be installed in New Jersey.

3. The applicant must be a contributor to the Societal Benefits Charge fund.

4. CHP or Fuel Cell equipment must be stationary and installed on the customer side of the meter.

5. Equipment must be sized to serve all or a portion of the electrical load at the customer site, but no more than 100% of the customers electric load.
   
6. Equipment must be new, commercially available and permanently installed. The following are not eligible for incentives: renewable source-fueled systems (Renewable fueled projects must be submitted to the Renewable Energy Market Manager through the REIP Program under the NJCEP); portable and emergency backup power systems; used, refurbished, temporary, pilot, or demonstration equipment; systems that use diesel fuel, other types of oil or coal for continuous operation.

7. Expansion of an existing facility with new equipment is also eligible for incentives, however only the incremental expansion would be eligible for the incentive. The combined capacity of the proposed expansion and existing generators are held to sizing requirements listed in item 5 above.

8. CHP or Fuel Cell systems with waste heat utilization must achieve annual system efficiency of at least 60%; electric only generation must achieve 45% electrical efficiency.

9. CHP or Fuel Cell system warranty must be all-inclusive for at least five years, or have a five year service contract.

For a complete list of program requirements and incentives download the CHP Application Package or Fuel Cell Application Package below.

Incentives

(1) Any facility that successfully participated in Pay for Performance (i.e. received an Energy Reduction Plan approval letter, and has begun or completed installation of recommended measures) prior to applying for CHP or fuel cell incentives will be eligible for an additional $0.25 per Watt from NJCEP, not to exceed the percentage project cost caps listed in the table above, or a combined utility plus NJCEP incentive of $2.25 million, whichever is less.
(2) The incentives shown above represent a maximum $/Watt utility incentive match. Actual $/Watt paid will vary depending on which gas utility territory the CHP/fuel cell system is installed. NJCEP will true-up its incentive to ensure consistent incentive matches across all gas utilities, up to the maximum amount of $2,000,000, not to exceed the percentage project cost caps as listed in the table above. Subject to funding availability.
(3) The maximum percentage of project cost will go to 40% where a cooling application is used or included with the CHP system.
(4) New Jersey’s Renewable Energy Portfolio Standard N.J.A.C. 14:8 2.5 clearly defines what materials are considered to be Class 1 biomass materials; those materials which are not deemed Class 1 must go through sustainability determination by New Jersey Department of Environmental Protection (NJDEP) to qualify. All renewable fueled projects must be submitted to the Renewable Energy (RE) Market Manager through the REIP Program under the NJCEP. Please contact RE Market Manager for latest incentives and additional program forms.
(5) Rebates are tiered; for example for a 20 kW project the first 10 kW is paid at $5.00 per watt, and the second 10 kW at $3.75 per watt.
(6) Includes all capital equipment costs associated with: producing and refining biomass feedstock, generating electricity and heat recovery.

To be eligible to receive a program incentive, Applicant must submit CHP or Fuel Cell Application Package to Market Manager and receive an Approval Letter prior to equipment installation.

Incentives will be processed by the Market Manager and paid as follows: Twenty percent (20%) of the incentive upon proof of equipment purchase; Sixty (60%) percent upon project completion and verification of installation by Market Manager; Remainder twenty percent (20%) one year after project inspection and acceptance and confirmation the project is achieving the proposed and/or minimum efficiency threshold.

Financing

The NJ Economic Development Authority's Energy Efficiency Revolving Loan Fund provides low interest financing for those participating in the CHP and Fuel Cell program. Loan amounts must be between $250,000 and $2.5 million. Interest rates are 2-4% based on the term of the loan.

Applications and Forms

Program participation forms should be completed with the assistance of your CHP/Fuel Cell developer/contractor. The forms are available in electronic (eForms) or traditional PDF versions. Eforms allow you to complete forms on your computer and save them at your convenience. Acrobat Reader 5.0 or greater is required to use Eforms.

All applications must be approved by Market Manager prior to installation of equipment.

Eforms

• Combined Heat & Power Application Package
• Fuel Cell Application Package

Traditional Forms

• Combined Heat & Power Application Package
• Fuel Cell Application Package