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Energy-Efficiency Funds and Demand Response Programs, New Jersey

Updated August 2007

What public-purpose-funded energy efficiency programs are available in my state?

New Jersey's 1999 electricity restructuring law paved the way for funding of energy efficiency by implementing a non-bypassable surcharge on retail sales of both electricity and natural gas. Roughly $125 million is available across all program types (including low-income and residential). A single, consistent set of programs is administered by each utility under the rubric of the New Jersey Clean Energy Program.

Federal customers can take advantage of the SmartStart Buildings Program, which provides financial, technical, and design assistance for energy-efficient retrofit, renovation, and new construction projects. Rebates are available for a wide range of equipment, including lighting and lighting controls, motors, variable frequency drives, gas cooling, electric chillers, several types of unitary HVAC equipment, gas-fired space and water heating, and various custom measures. Rebate size in most cases depends on the equipment capacity and efficiency, though some rebates (e.g., $250 for qualifying dual enthalpy economizer controls) are fixed. Financial incentives are also available to cover some or all of the design and engineering costs related to analysis of efficient alternatives, ranging from specific assistance such as chiller plant or compressed air system optimization to whole building simulation.

What utility energy efficiency programs are available to me?

For information on energy efficiency programs offered by utilities, please see the section above.

What load management/demand response options are available to me?

The PJM Interconnection (PJM), a regional transmission organization (RTO), offers two demand response programs that may be attractive to federal facilities:

  • The Emergency Load Response Program provides participants with a payment representing the marginal cost of power at the nearest hub on the PJM system (the locational marginal price, or "LMP") or $0.50/kWh, whichever is greater, for providing load reductions when notified by PJM of a system emergency. Compliance with any load reduction request is voluntary; no penalties are assessed if a participant decides not to provide a load reduction. Retail electricity customers may participate through any PJM Member (for example, their electricity provider) or directly, by registering as a Special Member with PJM.
  • The Economic Load Response Program allows electricity users to provide load reductions in exchange for a payment based on hourly wholesale electricity prices. As with the PJM emergency program, participation is fully voluntary. Program participants have the choice of two options: the Day-Ahead or Real-Time Option. In the Day-Ahead Option, participants submit load reduction bids (of at least 100 kW) into the day-ahead energy market. Participants whose bids are accepted are paid for their load reductions based upon the day-ahead, hourly electricity market prices. In the Real-Time Option, participants can decide at any time to provide load curtailments (with one hour notice to PJM), and receive payment based on the real-time electricity price. Retail electricity customers can participate in the program through any existing PJM Member, such as their utility, a third-party electricity supplier, or a specialty "curtailment service provider" (CSP). Regardless of which type of firm it is, the CSP will generally offer to split the revenues with the customer at a pre-determined percentage.

In both the emergency and economic programs, participants can provide load reductions either through curtailing electricity use or operating on-site generation.

What distributed energy resource options are available to me?

The Database of State Incentives for Renewable Energy provides information on programs that offer incentives for renewable distributed generation. The following programs may be of interest to federal customers:

  • As part of the New Jersey Clean Energy Program (see above), all electric and gas utilities in New Jersey participate in the state's Customer On-Site Renewable Energy (CORE) program. This program provides rebates to customers for installing clean distributed generation, including photovoltaic, small wind turbine, fuel cell, or sustainable biomass. Systems must be designed to serve no more than their own on-site facilities. The rebate rate varies depending upon the size of the system, but ranges as high as 60% of the installed cost of some systems.
  • For solar PV projects, federal customers can also take advantage of New Jersey's solar renewable energy certificate trading program. Because the state has an aggressive renewables portfolio standard (RPS), including a large solar requirement, the New Jersey Board of Public Utilities created a trading market whereby owners of solar PV installations can sell certificates (SRECs) representing the clean energy benefits of their solar systems to the New Jersey utilities that are required to meet the RPS requirements. SRECs have been trading near $0.20/kWh since the market began in 2004, and are expected to continue to approximate that price. Federal facilities can sell SRECs from their New Jersey solar installations and buy back an equivalent amount of generic, national RECs at a fraction of a cent per kWh, thereby augmenting the financing of their solar installation but still maintaining their contribution towards EPACT's renewable energy goals. SRECs in the NJ market are traded on an electronic bulletin board in chunks of 1 MWh (1,000 kWh).
  • Federal customers can take advantage of New Jersey's Clean Energy Financing program, which provides 20% grant funding and long-term financing of photovoltaic, solar thermal, biomass (inc. landfill gas), anaerobic digestion, fuel cell, wind, and tidal and wave energy systems of one MW or greater. N.B.: The grant portion of the program is currently (mid-2007) under review and not accepting applications.

Are there energy efficiency programs sponsored by state government?

No state government programs are currently available to federal customers. For information on potential future opportunities, contact the New Jersey Board of Public Utilities.

What additional opportunities are available to me?

Federal customers also have energy efficiency opportunities available with utilities that have area-wide contracts with GSA (e.g., Atlantic City Electric, First Energy/JCP&L, New Jersey Natural Gas, PSE&G, and South Jersey Gas) and, by extension, all other federal agencies. Federal facilities should contact their account executive to determine the level of participation by their local utility.