Clean Energy Solutions Large Scale CHP and Fuel Cells Program

April 06, 2016


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 grants for the installation of combined heat and power (CHP) or fuel cell systems to commercial, industrial, and institutional entities (including non-profits and public entities). In order to qualify for incentives, the applicant must be a contributor to the Societal Benefits Charge (SBC). Equipment must be commercially available, permanently installed, and installed on the customer side of the meter. Expansions of existing facilities may be eligible, though only the incremental expansion will be eligible for the incentive. Systems must have at least a 10-year all inclusive warranty or service contract and must be sized to meet the customer's electrical load (no more than 100% of historical annual consumption or peak demand). Third-party owned systems are eligible and must comply with the 10-year minimum warranty or service contract requirement.

Program Description:

The incentives amount depends on different size of the system. The grant amounts are as follows:


Incentive ($/W)

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

$ cap

Maximum % of Project Cost

CHP Using Nonrenewable Fuel (microturbines, internal combustion engine, combustion turbine)

<500 KW: $2/Watt

500kW- 1MW: $1/Watt

1MW- 3 MW: $0.55/Watt

>3 MW: $0.35/ Watt


500kW-1MW: $2M

1MW-3MW: $3M

30% (or 40% with cooling application

Heat or Mechanical Recovery From Existing Equipment Using New Electric Generation Equipment

<1 MW: $1/Watt

>1MW : $0.50/ Watt


<1MW: $2M

>1MW: $3M


Fuel Cells With Waste Heat Utilization (non-renewable fuel)

<1 MW: $4/Watt

>1 MW: $2 /Watt


<1MW: $2M

>1MW: $3M



Fuel Cells Without Waste Heat Utilization (non-renewable fuel)

<1 MW: $3/Watt

> 1MW: $0.50/Watt







Additional incentive of $0.25/ Watt (capped at $250,000) is offered for projects participating in Pay for Performance prior to applying to CHP or Fuel cell incentive.

Incentives for CHP facilities greater than 1 MW are tiered, meaning that a 4 MW CHP system would receive $0.55/Watt for the first 3 MW and $0.35/Watt for the remaining 1 MW. Other incentives are not tiered. Grants are limited to $3,000,000 per project. CHP projects are capped at 30% of the project costs, and fuel cell projects are capped at 45% of project costs. The program incentives are paid out in three payments- 30% upon purchase of equipment, 60% upon project installation, and 10% after a year of achieving performance thresholds.

In order to qualify for funding, projects are expected to use mature or emerging technologies that maximize energy production during peak demand periods with the least impact on the environment. The program will not support soft costs such as R&D or feasibility/engineering studies; equipment purchases or other activities associated with equipment that is not commercially viable; or building construction and land purchases. Under the current solicitation grant applications are reviewed and approved on a first-come, first-served basis. Proposed projects will be evaluated for funding based on readiness to proceed and efficiency; ability to create or maintain jobs; potential to reduce greenhouse gas (GHG) emissions; and the total energy to be created or saved. Please see the program web site for additional information and program materials.

Program Overview

Implementing Sector: State
Category: Financial Incentive
State: New Jersey
Incentive Type: Grant Program
Web Site:
Administrator: New Jersey Economic Development Authority
Start Date: 01/17/2013 (current solicitation)
Eligible Renewable/Other Technologies:
  • Combined Heat & Power
  • Fuel Cells using Non-Renewable Fuels
  • Heat recovery
Incentive Amount: CHP less than 500 kW: $2.00 /Watt
CHP between 500kW- 1 MW: $1/ Watt
CHP between 1 MW-3 MW: $0.55/Watt (tiered)
CHP greater than 3 MW: $0.35/Watt (tiered)
Fuel Cells < 1 MW with waste heat utilization: $4.00/Watt
Fuel Cells < 1 MW without waste heat utilization: $3.00/Watt
Fuel Cells > 1 MW with waste heat utilization: $2.00/Watt
Fuel Cells > 1 MW without waste heat utilization: $1.50/Watt
Heat Recovery < 1 MW: $1.00/Watt
Heat Recovery > 1MW: $0.50/ Watt

Pay for Performance: Additional incentive of $0.25/ Watt
Maximum Incentive: CHP: $3,000,000 or 30% of project costs
Fuel Cells: $3,000,000 or 45% of project costs
Heat Recovery: $3,000,000 or 30% of the project costs
Pay for Performance: Capped at $250,000
Equipment Requirements: All systems must be new
CHP systems must achieve annual system efficiency of at least 65%
Fuels cells without heat utilization must achieve annual system efficiency of at least 50%
The systems must operate a minimum of 5,000 hours per year at full rated KW output (3,500 hours for eligible critical facilities)
Installation Requirements: Must be a stationary system installed on the customer side of the meter
It should be installed in NJ


Address: 44 South Clinton Avenue
Trenton NJ 08625
Phone: (186) 666-5762

This information is sourced from DSIRE; the most comprehensive source of information on incentives and policies that support renewables and energy efficiency in the United States. Established in 1995, DSIRE is operated by the N.C. Clean Energy Technology Center at N.C. State University.