CHP Performance Program

September 19, 2022


The New York State Energy Research and Development Authority (NYSERDA) offers performance based incentive for Combined Heat and Power (CHP) systems for summer on-peak demand reduction and electricity generation. Total budget of $36,000,000 is available for the program and is awarded on a first, come -first, serve basis, or until the funds are exhausted. Total maximum incentive is capped at lessor or $2,000,000 per project or, 50% of the total project cost. Sites may qualify for additional bonus incentives up to $600,0000. The program is accepting application until December 30, 2016, or until the funds are exhausted. Please see the Program Opportunity Notice 2701 (PON 2701), listed on the program web site for detailed information about the program.


CHP system must have a total installed capacity greater than 1.3 MW. The program is open to customers of investor owned utilities that pay the Systems Benefit Charge (SBC) on their electric or gas bill. 

Fuel cells and other CHP systems currently contracted for installation under another NYSERDA program, or project eligible to submit to the customer-sited tier of Renewable Portfolio Standard are ineligible for this program. List of qualified systems are listed in NYSERDA’s CHP Manual available on the program website.

Program Description

Incentives are based on the summer-peak demand reduction (kW), energy generation (kWh), and fuel conversion efficiency (FCE).  Energy generation incentive in kWh is provided for projected annual hour production based on engineering analysis. Summer peak demand reduction incentive in kW is the projected average summer capability period peak demand reduction based on engineering analysis. Summer capability period are between hours of 12pm to 6pm, Mondays to Friday, from May 1 through October 31, excluding legal holidays. CHP systems must have a minimum of 60% of annual fuel conversion efficiency (FCE). Incentive amounts are provided in the table below


Annual Energy Generation

Summer Peak Demand Reduction







Downstate rates apply for customers in Bronx, Kings, Nassau, New York, Queens, Richmond, Suffolk, and Westchester counties. Base incentives are capped at less of $2 million per CHP project, or 50% of to the total project costs. Additional bonus incentive up to 30% is available for projects that- serve critical infrastructure (10%), for being within a targeted zone (10%), and for projects that demonstrate superior performance based on FCE (10%). Bonus incentive is capped at $600,000. Including bonus incentives, a project can qualify for a maximum funding of $2,600,000 per project, or 50% of the total project cost. 

Incentive amounts will be provided to the project based on the predetermined payment schedule. Generally, 40% of the amount will be available after project installation, and the rest will provided after 2 years of measurement and verification period (30% after each year).

Interested participants can also contact Department of Energy’s Northeast CHP Technical Assistance Partnership program for free technical support. 

Program Overview

Implementing Sector: State
Category: Financial Incentive
State: New York
Incentive Type: Performance-Based Incentive
Web Site:
Administrator: New York State Energy Research and Development Authority (NYSERDA)
Start Date: 05/02/2013
Eligible Renewable/Other Technologies:
  • Combined Heat & Power
Incentive Amount: Upstate: $0.10/kWh + $600/kW
Downstate: $0.10/kWh + $750/kW
10% bonus incentive for serving Critical Infrastructure
10% bonus incentive for projects within Targeted Zone
10% bonus for projects that demonstrate superior performance based on FCE.
Maximum Incentive: Base incentive capped at lesser of, $2,000,000 per project or, 50% of total project cost
Additional bonus incentive capped at $600,000
Eligible System Size: System must be greater than 1.3 MW
Equipment Requirements: Must be commercially available gas fired reciprocating engine or turbine-based technologies
Must have a minimum of 60% annual Fuel Conversion Efficiency (FCE)
Must have a NOx emission rate less than 1.6 lbs/MWhr
Must have ability to operate during a grid outage
If in a flood zone, the critical components must be located above flood level.


This program has 1 incentives
Technologies: Combined Heat & Power
Sectors: Commercial, Industrial, Investor-Owned Utility
Parameters: The incentive has a minimum of $2.00, The incentive has a minimum of 50.00 % of cost, The incentive is 750.00 $/kW, The incentive is 0.00 $/kWh


Name: Jim Hastings
Address: 17 Columbia Circle
Albany NY 12203-6399
Phone: (518) 862-1090

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.