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New Jersey

New Jersey

Incentives/Policies for Renewables & Efficiency

Printable Version
Pay for Performance Program   

Last DSIRE Review: 10/08/2014
Program Overview:
State: New Jersey
Incentive Type: State Rebate Program
Eligible Efficiency Technologies: Lighting, Chillers , Furnaces , Boilers, Central Air conditioners, Energy Mgmt. Systems/Building Controls, Motors, Comprehensive Measures/Whole Building, Custom/Others pending approval
Applicable Sectors: Commercial, Industrial, Nonprofit, Schools, Local Government, State Government, Fed. Government, Multi-Family Residential, Institutional
Amount:Awarded based on completion of three program milestones
Existing Buildings
Incentive 1: $5000-$50,000, based on $0.10 per sq ft, not to exceed 50% of facilities annual energy expenditure; provided after submittal of energy reduction plan
Incentive 2: 50% of the total performance based incentive; after installation of recommended measures
Incentive 3: Remaining amount after completion of Energy Benchmark report
New Construction
Incentive 1: $0.10 per sq. ft, not to exceed $50,000
Incentive 2: $1.00 per gross heated/ conditioned sq. ft.
Incentive 3: varies from $0.35 - $0.65 per heated sq. ft. depending on the actual energy cost savings; not to exceed 75% of the project incremental cost.
Maximum Incentive:Varies for each program milestone
$1 M per utility account (gas and electric) per year
$2 M per project
$4 M per entity per year
Eligible System Size:Existing Buildings: Peak demand greater than 100 kW in any last 12 months
New Construction: Greater than 50,000 sq feet
(see below for exemptions)
Installation Requirements:Must be installed by approved Program Partner
Existing building: Must achieve a minimum 15% source energy reduction target
New construction: Must have an energy cost reduction of 15% from ASHRAE 90.1-2007.
Funding Source:New Jersey Societal Benefits Charge (public benefits fund); ARRA
Program Budget:Existing Buildings: $36 million (July-June FY2015)
New Construction: $13.8 million (July-June FY2015)
Web Site:

The New Jersey Clean Energy Program (NJCEP) offers the Pay for Performance incentive program for comprehensive energy efficiency for whole-building improvements. The incentives are categorized into Existing Buildings and New construction. The program is available to all commercial and industrial buildings. The program is administered by the NJ Board of Public Utilities and managed by TRC Solutions.


The program is funded by the State Societal Benefits Charge (SBC), hence it is 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.

In order to qualify for the Existing Buildings program, commercial, industrial and certain multifamily building must have peak kilowatt (kW) of more than 100 kW in any of the most recent last months. New commercial, industrial and multifamily buildings must have 50,000 sq ft or more of gross heated/conditioned space and must have targeted 15% energy reduction in order to qualify for the New Commercial Buildings program. Market Manger has the discretion of approve the projects that are less than 10% below the requirement.

Hospitals, public college and universities, non-profits, affordable multifamily housing, and local governmental entities are exempt the 100 kW and 50,000 sq ft requirement.

Program Description

The program requires participants to use an approved Program Partner (see website for a list of approved partners) in order to receive incentives. The Program Partners are qualified energy efficiency technicians who work directly with the program participant to recommend and install energy efficient measures in the buildings.  

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

For 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 required timeframe or the incentive must be repaid.

Incentive II: Installation of measures identified in the approved Energy Reduction Plan. The incentive ranges from $0.09- $0.11/kWh and $0.90 -$1.25/therm based on projected savings.

Incentive III: Verification of realized energy savings as a result of the installed measures.The incentives ranges from $0.09-$0.11/kWh and $0.90-$1.25/therm based on twelve months of actual savings. Incentive will be trued-up if savings are higher or lowere than projected.

Maximum incentives are capped at 50% of lesser of the total estimated or actual project costs and up to $1 million per gas and electric account (limited to $2 million per project). There is an also an annual cap of $4 million per entity. Incentives will be reduced by 50% to $0.05 per sq. ft. and maximum up to $2,500 for customers that participated in Local Government Energy Audit Program.

For New Construction or Substantial Renovations

Similar to Existing Buildings program, New Construction program also includes incentives based project milestones.  

Incentive I: The approval of a complete Proposed Energy Reduction Plan that provides for a minimum energy cost reduction of 15% compared to ASHRAE 90.1-2007 entitles the customer to an incentive equal to $0.10/gross heated square foot of the project with a maximum incentive of $50,000. The incentive is contingent upon the project moving forward with construction.

Incentive II: $1.00 per gross heated/conditioned sq foot based on successful installation of energy efficiency improvements outlines in the Energy Reduction Plan.

Incentive III: The approval of a complete Commissioning Report which verifies that the building equipment meets the minimum criteria entitles the customer to an incentive of $0.35 - $0.65 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.

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 per year and $4 million per entity per year. Projects involving combined heat and power (CHP) were formerly included under this program but are now addressed under separate programs for large and small CHP/fuel cell installations. Please see the program website or contact the program administrator for additional information on how this program works. The total Fiscal Year 2015 budget runs July 1,2014- June 30,2015 and contains roughly $7.2 million for new construction and $51.9 million for existing building retrofits (including already committed expenses).


  New Jersey Clean Energy Program - Pay For Performance
c/o TRC Energy Services
900 Route 9 North, Suite 104
Woodbridge, NJ 07095
Phone: (866) 657-6278
Fax: (732) 855-0422
Web Site:
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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.