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 were 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
- Projects must demonstrate a simple payback of ten years or less
|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|
|Waste Heat to Power*||<1 MW||$1,000||30%||$2 million|
|> 1MW||$500||$3 million|
*Waste Heat to Power: Powered by non-renewable fuel source. Heat recovery or other mechanical recovery from existing equipment utilizing new electric generation equipment (e.g. steam turbine).
(1) 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).
(2) The maximum incentive will be limited to 30% of total project. This cap will be increased to 40% where a cooling application is used or included with the CHP system (e.g. absorption chiller).
(3) Projects installing CHP or WHP will be eligible for incentives shown above, not to exceed the lesser % per project cap or $ per project cap. Minimum efficiency will be calculated based on annual total electricity generated, utilized waste heat at the host site (i.e. not lost/rejected), and energy input.
- 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
Applications must be submitted through the on-line portal. Hard copy or email submissions will not be accepted. A comprehensive version of the application is available for reference, which shows the information applicants will be required to submit as well as providing an outline of the eligibility requirements, submission instructions, and Program terms & conditions.
Please note, within the comprehensive application form the blue-colored tabs are for informational purposes, the yellow-colored tabs will be completed by the applicant on-line, and the green-colored tabs will need to be completed and uploaded as an EXCEL workbook. Any questions may be emailed to email@example.com.
Applications will be reviewed for completeness for all program requirements and incomplete applications will be removed from the application queue. Applicants with incomplete applications will be notified of the deficiencies and given the opportunity to remedy the deficiencies and submit a revised application. Revised applications will be inserted at the end of the application queue. Applications will be accepted on a first-come, first-served basis until the program’s F17 budget is exhausted.
The NJBPU requires that customer-generators have interconnection agreements in place with their EDCs. These agreements govern connection to the electric grid and specify the terms and conditions, technical requirements, and safety and testing requirements needed. Utility contact information and utility specific website pages with forms are available (links directly to the utility Interconnection forms page) for each of the NJ BPU regulated electric utilities.
A list of trade allies that can support a CHP installation can be found here.
|Incentives ($000)||Active Projects
||Energy Capacity (MW)
|FY17 CHP Incentive Budget||47,193|
|Incentives Paid Fiscal YTD||8,620|
*as of October 1, 2016