Solar & Battery Regulation & Incentive Programs

Small Scale CHP and Fuel Cell Incentive Program

Program Overview


Category:
Financial Incentive
Program Type:
Grant Program
Implementing Sector:
State
State:
New Jersey
Eligible Storage Technologies:
Combined Heat & Power, Fuel Cells using Non-Renewable Fuels, Microturbines
Website:
http://www.njcleanenergy.com/commercial-industrial/programs/combined-heat-power/combined-heat-power
Incentive Amount:
Varies by system type and size. Incentive design includes:
Capacity based per KW incentive
Additional Pay for Performance incentive of $0.25 per Watt from NJCEP (maximum of $250,000)
Maximum Incentive:
Varies by system type,
Incentive limited to 30% of the total project cost
Cap increased to 40% for systems using absorption chillers
Equipment Requirements:
Equipment must be new, commercially available, and permanently installed.
Electric-only generation must achieve a minimum 50% electric efficiency.
Systems with waste heat utilization must achieve a minimum 65% annual system efficiency.
Systems must have a 10 year all-inclusive warranty or 10 year service contract
Installation Requirements:
Must be stationary.
Must be installed on the customer side of the meter.
Must bedesigned to serve no more than 100% of on-site electric load
Administrator:
TRC Solutions
Applicable Sectors:
Commercial, Industrial, Local Government, Nonprofit, Schools, State Government, Federal Government, Agricultural, Multifamily Residential, Institutional
Utility:
Atlantic City Electric Co, Jersey Central Power & Lt Co, Public Service Elec & Gas Co, Rockland Electric Co
Last Updated:
04/06/2016
Funding Source
New Jersey Societal Benefits Charge (public benefits fund)

Eligibility Criteria

EligibilitySectorsTechnologies
max % of cost30.0000
Commercial
Industrial
Combined Heat & Power
Fuel Cells using Non-Renewable Fuels

Summary

 NOTE: As of December 11, 2015, New Jersey's Clean Energy Program's has temporarily ceased accepting applications for the Combined Heat & Power and Fuel Cell Program (CHP/FC). The CHP/FC program has experienced a surge in applications since the start of FY16 and has a pipeline that currently exceeds the CHP/FC Board-approved program budget. Staff is currently reviewing potential funding reallocations among programs to continue the program in the near term.

The New Jersey Clean Energy Program (NJCEP) offers incentives for several types of small combined heat and power (CHP) and fuel cell systems that have a generating capacity of 1 MW or less and are located behind the meter of an existing electric or natural gas customer that pays the Societal Benefits Charge (SBC). This includes customers of the states investor-owned electric and natural gas utilities, but does not include customers of municipal utilities. A variety of equipment and installation requirements exist for determining eligibility (see details above and on the program web site), but in addition to these limitations the program guidance specifically notes that the following types of systems are not eligible for incentives: renewable source-fueled systems; 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. However, systems that use Class I renewable fuels (as defined under the New Jersey RPS) are eligible under the separate Renewable Energy Incentive Program (REIP).  The EDA also offers low-interest financing for the small CHP program through the Energy Efficiency Revolving Loan Fund.

Projects the meet the minimum program requirements are evaluated for funding based on a variety of criteria, such as system efficiency, environmental performance, and other metrics (i.e., the program is not a first-come, first-served rebate program). The incentive available to an individual project is determined by the project type and size. Maximum incentives in reference to a percentage (%) of project cost also vary by project type. The following table summarizes the basic incentive terms (see the program web site for further details):

Technology

NJCEP Incentive ($/W), $1M maximum

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

Utility Match ($/W), $1M maximum

Maximum % of Project Cost
CHP Using Nonrenewable Fuel (microturbines, internal combustion engine, combustion turbine)

up to 500 kW:  $1.00/W

501-1,000 kW: $0.50/W

$0.25/W

up to 500 kW: $1.00/W

501-1,000 kW $0.50/W

30% (or 40% with cooling application
Heat or Mechanical Recovery From Existing Equipment Using New Electric Generation Equipment $0.50/W $0.25/W $0.50/W 30%
Fuel Cells With Waste Heat Utilization (non-renewable fuel) $2.00/W $0.25/W $2.00/W 60%
Fuel Cells Without Waste Heat Utilization (non-renewable fuel)
$1.50/W $0.25/W $1.50/W 60%

As indicated above, projects that are pursued in conjunction with energy efficiency improvements made under New Jersey's Pay for Performance (P4P) Program are eligible for a bonus incentive. Systems owned by a third-party (i.e., not the utility customer) are eligible for incentives under this program, but the term of the lease or energy purchase agreement must be at least 15 years and meet several other requirements. Incentives are distributed to participants in steps, as follows: 20% upon equipment purchase, 60% upon inspection and verification of the installation, and 20% one year after inspection and verification that the project is achieving the proposed/minimum efficiency threshold. Please see the program web site for further information and application details.