Combined Heat & Power (CHP) Program

July 25, 2007


Note: Applications for the most recent round of funding from the New Jersey Combined Heat & Power Program were due June 30, 2006. The information below describes incentives available through that date. The New Jersey Clean Energy Program anticipates that more program funding will be available in the future. Check the New Jersey Clean Energy Program web site periodically for additional information. The New Jersey Combined Heat & Power (CHP) Program provides incentives that vary based on CHP technology, type, project size and total project cost. To qualify, a facility must be located in New Jersey, and the customer must be a contributor to the Societal Benefits Charge fund. Incentives are paid out only up to one megawatt (MW) of capacity. There is no minimum project size. Any portion of a customer's load that is committed to an interruptible or peak load reduction program is not eligible for incentives. However, these customers can seek incentives for generation capacity to cover their uncommitted load. Qualifying fuel cells not fueled by a "Class I" renewable fuel are eligible for an incentive of $4.00 per watt, not to exceed 60% of a project's cost. Qualifying microturbines, internal combustion engines and gas combustion engines are eligible for an incentive of $1.00 per watt, not to exceed 30% of a project's cost. Qualifying electric-generating systems utilizing heat recovery or other mechanical recovery are eligible for an incentive of $0.50 per watt, not to exceed 30% of a project's cost. Used, refurbished, temporary, pilot, demonstration and back-up generation do not qualify for incentives under this program. Systems or equipment that use diesel fuel, oil or coal for start-up or continuous operations also are not eligible. CHP systems must achieve an average annual fuel efficiency of at least 60%, based on total energy input and total utilized energy output. Mechanical energy may be included in the efficiency evaluation. In addition, systems should have the ability to island (disconnect) from the utility in the event of substantial grid congestion or failure. Systems installed must be covered by a five-year warranty or a five-year service contract. See the program web site for additional details. Contact your gas utility for more information and additional program requirements:

  • Elizabethtown Gas - (800) 221-0364
  • PSE&G - (973) 430-7886
  • NJ Natural Gas - (732) 919-8133
  • South Jersey Gas - (609) 561-9000 ext. 4271

Program Overview

Implementing Sector: State
Category: Financial Incentive
State: New Jersey
Incentive Type: Rebate Program
Web Site:
Start Date:
Eligible Renewable/Other Technologies:
  • Combined Heat & Power
  • Heat recovery
  • Other EE
Incentive Amount: Varies by system type
Maximum Incentive: $4.00/watt (for funding round that expired 6/30/2006)
Eligible System Size: None (incentives paid up to 1 MW)

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.