State and Local Policy Database

New Jersey

State Scorecard Rank


New Jersey

25.0Scored out of 50Updated 12/2020
State Government
Score: 3 out of 6
State Government Summary List All

The state offers grants and loans for energy efficiency investments, as well as PACE financing. The state government leads by example by requiring the benchmarking of energy use in public buildings and encouraging the use of energy savings performance contracts. Research focused on energy-efficient vehicles and building components is conducted at several institutions.

Financial Incentives List All

Currently, there are no solely state-administered financial incentive programs. Further financial incentive information can be found in the Database of State Incentives for Renewables and Efficiency (DSIRE New Jersey). The state does enable Property Assessed Clean Energy Financing (PACE) but does not yet have any active programs. For additional information on PACE, visit PACENation.

Last Updated: August 2022

Equity Metrics and Workforce DevelopmentList All

The Clean Energy Act calls for the Board to adopt programs that “ensure universal access to energy efficiency measures, and serve the needs of low-income communities,” and the Energy Master Plan establishes that the State’s priorities in developing its statewide EE structure are affordability, equity, environmental justice, economic development, decarbonization, and public health. On June 10, 2020 the Board of Public Utilities adopted the framework for the next generation of EE programs, which seeks to reduce the inequity currently experienced by groups and individuals across New Jersey who disproportionately lack access to energy-efficient housing, appliances, and technologies. There are several approaches that the framework provides for addressing energy equity. The Board will create an Office of Clean Energy Equity, and will establish an Equity Working Group under the Energy Efficiency Advisory Council, which will comprise stakeholders from representative organizations across the state familiar with the intersection of energy, equity, and health issues, as well as representatives from each of the other working groups. This working group will be responsible for developing recommendations for integrating equity metrics and approaches in EE and PDR programs for utility-run, State-run, and co-managed programs. The EWG will collaborate with the Supplier Diversity Development Council on recommendations for increasing economic development opportunities for minority-, women-, and veteran-owned businesses, including through, but not limited to, procurement policies for contractors and subcontractors. Other approaches are the expansion of eligibility criteria for LMI programs by geography, streamlining eligibility criteria among state programs, Additionally, the utility targets and incentive/penalty structure considers performance in the category of low-moderate income programs as part of its evaluation criteria.

Workforce Development

In June 2020, the NJBPU established a Workforce Development Working Group (WFD WG) to inform energy efficiency program design and evaluation. The WFD WG comprises Staff, Rate Counsel, the utilities, energy efficiency suppliers, job training institutions and organizations, equity stakeholders, and other agencies and organizations. This working group is developing recommendations for establishing coordinated and collaborative workforce development and job training pathways and pipelines statewide, with a focus on providing economic opportunities for underrepresented and socially or economically disadvantaged individuals. Underrepresented and socially or economically disadvantaged individuals may include women, people of color, veterans, disabled, and formerly incarcerated individuals, as well as those who are unemployed, underemployed, or low- and moderate-income. Programs may include contractor and subcontractor coaching and mentoring of underrepresented, disadvantaged, and small business enterprises. The WFD WG is collaborating with the New Jersey Department of Labor and Workforce Development, other state agencies, the utilities, and other entities, as applicable, on the development of statewide workforce development pathways, training, coaching/mentoring, and other initiatives, including for underrepresented and disadvantaged individuals, communities, and business enterprises.

Last Updated: September 2020

Carbon Pricing PoliciesList All

New Jersey is a member of the Regional Greenhouse Gas Initiative (RGGI), a cap-and-trade program for reducing GHG emissions in North America that began its compliance period in 2009. Capping CO2 emissions from the power sector, the program aims to reduce emissions by 45% below 2005 levels by 2020 and additionally by 30% by 2030. The first quarterly RGGI CO2 auction took place on March 11, 2020, allocating $20.7 million to New Jersey for investment in clean energy and greenhouse gas reduction strategies in the State. Three agencies, New Jersey Department of Environmental Protection, New Jersey Board of Public Utilities, and New Jersey Economic Development Authority, released the RGGI Strategic Funding Plan identifying how the RGGI auction proceeds will be distributed for the 3-year funding period (years 2020 through 2022).

New Jersey is also a participant in the Transportation and Climate Initiative’s effort to develop a cap-and-invest program for transportation emissions. In December 2019 the group released a draft MOU for stakeholder input, along with preliminary estimates of the environmental, health, and economic benefits that could be achieved by a regional program. The final MOU is expected in 2020.

Per state legislation N.J.S.A 26:2C-37, New Jersey does have a statewide emissions reduction goal in place, specifically to reduce emissions 80% by 2050 (baseline year 2006).

Last Updated: September 2022

Building Energy Disclosure List All

The Clean Energy Act of 2018 (P.L.2018 c. 17 “Clean Energy Act”) provides that within five years the NJBPU require benchmarking by owners and operators of commercial buildings over 25,000 sq. ft. using the USEPA Portfolio Manager tool.

Last Reviewed: July 2019

Public Building Requirements List All

In January 2008, New Jersey enacted legislation mandating the use of high performance green building standards in new state construction. The standard requires that new buildings larger than 15,000 square feet constructed for the sole use of State entities achieve US Green Building Council LEED* Silver certification, a two-globe rating on the Green Building Initiative Green Globe rating system, or a comparable numeric rating from another accredited sustainable building certification program. In addition, the Energy Master Plan's Goal 3.3.4 states that all State-funded buildings and projects should be built to the highest attainable, above-code building performance standard.

The New Jersey Energy Master Plan's Goal 3.3.5 calls for state buildings to improve energy efficiency and retrofit to high performance standards where applicable; the EMP also calls for all state buildings to undergo an ASHRAE Level 3 energy audit and establish plans to implement energy efficiency projects. New Jersey's Clean Energy Program (NJCEP) now offers free benchmarking for specific commercial and industrial sectors, including hospitals and healthcare, municipalities, industries, hospitality, multifamily, higher education, K-12 public schools, retail, and others. Beginning in FY20, the cap on energy audits on hospitals increased from $100,000 to $300,000, which was designed to increase program participation and energy savings among potential participants that tend to have large, complex facilities. Since 2008, NJCEP has performed 4,549 audits and benchmarks across all sectors.

New Jersey leads by example with an initiative to increase the energy efficiency of state owned or operated facilities and buildings. Energy Savings Improvement Program (ESIP) funds will be used for energy efficiency and energy conservation improvements, renewable energy, upgrades, and the expansion of other green-oriented programs, particularly demand response and combined heat and power. The FY23 proposed budget includes total funding for State Facilities of $56,670,192 to go to various energy efficiency programs.

Through the NJBPU, the State Facilities Initiative identifies and implements energy efficiency projects in State-owned facilities with the objective of producing energy and cost savings. The Energy Capital Committee (ECC), consisting of members from Treasury and the NJBPU Division of State Energy Services, coordinates and recommends approval of these projects based on evaluation of capital costs and anticipated energy savings.

The list of planned projects includes those identified through energy audits completed, in progress or proposed for various State facilities, as well as projects requested by State agencies on an annual basis and in support of policy goals identified in the Energy Master Plan. Over $65 million has been committed since 2017. Additionally, state agencies are encouraged to utilize NJCEP’s Local Government Energy Audit program, which provides 100% of the costs of audits to local and state facilities.

The NJBPU established the Division of State Energy Services in order to advance energy efficiency and renewable energy in state facilities. This office has access to the suite of energy efficiency and renewable energy incentives in NJCEP. Through this program, the State offers free energy audits and benchmarking for public facilities, including state, county, and local government facilities. Benchmarking reports for these facilities are posted online. The Division of State Energy Services, as part of the ECC, has access to a $100 million line of credit for state energy efficiency and renewable energy projects and strongly encourages and promotes the use of these programs that result in energy efficient improvements. While the original $100 million backing has been almost exhausted through projects and commitments, a new line of credit will be sought to continue these efforts. New Jersey Treasury uses a statewide system called Energy Solve to track energy bills and usage and identify outlying state facilities that need energy efficiency upgrades. The Division of State Energy Services has started to develop a plan forward to tackle these largest energy users.

The New Jersey Department of Community Affairs and the Rutgers Center for Green Building have developed a green building manual for owners and builders interested in designing, constructing, and operating their buildings above code. In addition, Rutgers has developed a Municipal Guidance for Promoting Energy Efficiency in the Private Sector, which describes policies and local planning/zoning tools available for local governments. Municipalities and schools can use this manual to achieve certification under the Sustainable Jersey program.

Last Updated: August 2022

Fleets List All

All state government fleets and certain businesses are subject to regulation under the 1992 Energy Policy Act (EPAct). Under the DOE website EPAct Transportation Regulatory Activities, State vehicles are required to operate with increased energy efficiency standards. State vehicles are to utilize fuel types most appropriate for the vehicle by promoting alternative fuels such as compressed natural gas, propane, biodiesel, and ethanol to reduce the use of petroleum based fuels. State conduct under the following fleets will follow this regulation:

  • State of New Jersey
  • Rutgers, The State University of New Jersey
  • Port Authority of New York and New Jersey
  • Electric and gas utilities, and propane providers

The above regulations require fleet operators of light duty AFVs to maintain a pre-determined percentage of vehicles annually. Development of AFV infrastructure will serve as an improved compliance measure. Increasing fleet efficiency will reduce our carbon footprint in the State of New Jersey.

In the winter of 2019, NJ Department of Treasury issued a significant bid solicitation for passenger battery electric and hybrid vehicles, which will enable state government agencies to purchase vehicles for the first time. The Energy Master Plan sets forth a goal of seeking to transition its light-duty fleet to electrification as vehicles reach the end of their useful life, beginning in July 2020, if not sooner.

Through funding from NJBPU, non-profit Sustainable Jersey is also working with their Electric Vehicle Working Group to review their guidance for municipalities that participate in their programs (450 “Participating” municipalities and 203 “Certified” municipalities partner with Sustainable Jersey to advance various initiatives including energy efficiency).

The Sustainable Jersey Purchase Alternative Fuel Vehicle Action (aka guidance) is now updated to reflect technology changes and options for fleet procurement. They are also in contact with Sawatch, Electrification Coalition, and Nissan regarding potential outreach projects to promote municipal fleet adoption of electric vehicles.

In January 2020, Governor Phil Murphy signed legislation that requires the following for the State fleet: At least 25% of State-owned non-emergency light duty vehicles shall be plug-in electric by December 31, 2025; thereafter, 100% of these vehicles shall be plug-in electric by the end of 2035. By the end of 2024, at least 10% of new bus purchases made by NJ Transit will be zero emission busses, which will increase to 50% by the end of 2026 and 100% by the end of 2032. The Board of Public Utilities and Department of Environmental Protection are currently working to establish additional goals for medium-duty and heavy-dulty on-road diesel vehicals and associated charging infrastructure. The legislation also directs the DEP to report on the state of the plug-in electrical vehical market, the State's progress toward achieving the goals, identify barriers to achievement of the goals, and make recommendations for legislative or regulatory action to address barriers in New Jersey every five years.

Last Updated: August 2022

Energy Savings Performance Contracting List All

New Jersey’s ESPC policies stem from a 2009 law which allows New Jersey government entities to enter into energy savings performance contracts through the New Jersey Energy Savings Improvement Program (ESIP). The program complements the New Jersey Clean Energy Program and provides some model ESIP documents.

The ESIP allows public facilities to enter into long-term energy savings agreements without utilizing their capital budgets. There are currently sixteen Treasury-approved Energy Services Contractors in the state who can publicly bid for these energy efficiency construction projects.  New Jersey has 127 approved ESIP projects as of August 2020, with $1.06 billion in total contracts worth $1.30 billion in annual savings.

The NJ Board of Public Utilities’ Division of State Energy Services manages the performance contracting process for all local public facilities. The State of New Jersey’s Department of Property Management and Construction within the Department of Treasury manages performance contracting for state facilities.

ESPC has assisted both school districts and municipalities in making comprehensive energy efficiency upgrades to facilities without impacting taxpayers.

Last Updated: October 2020

Research & Development List All

The Rutgers Center for Green Building (RCGB) is contracted by New Jersey’s Office of Clean Energy to serve as an independent evaluator and provide regular analyses of NJCEP energy efficiency programs as well as develop research and recommendations related to new programs. RCGB promotes green building through research, advocacy and education. The Center conducts applied research utilizing planned and existing green building projects, works with industry and government to promote these concepts, and develops undergraduate, graduate and professional education programs. It seeks to establish itself as the pre-eminent interdisciplinary center for green building excellence in the Northeast, while serving as a single accessible locus for fostering collaboration among green building practitioners and policy-makers.

The proposed FY2020 budget also includes $4,000,000 for Research and Development Energy Tech hub which will include energy efficiency measures, $4,000,000 to support innovation in clean energy including energy efficiency and $8,152,103 for incentives for Smart technology devices that allow ratepayers to reduce their own energy consumption (i.e. smart thermostats). In June 2019, the BPU will initiate a proceeding to establish a process and mechanism for achieving the state’s goals of energy storage, allowing for more efficient use of energy and addressing peak demand issues.

Working with other partner agencies and stakeholders, the Clean Energy Program will also provide critical curriculum funding in the amount of $3,000,000 to support the development of curricula around energy savings for elementary, middle school and high school students.

Last Reviewed: July 2019

Score: 6.5 out of 9
Buildings Summary List All

One and two-family detached dwellings are to comply with Chapter 11 of the 2015 International Residential Code (IRC), as adopted at N.J.A.C. 5:23-3.21; all other residential buildings three or fewer stories are to comply with residential portion of the 2015 International Energy Conservation Code (IECC), as adopted at N.J.A.C. 5:23-3.18.  The residential provisions are identical and included in the IRC for ease and usability of the code dedicated to one- and two-family detached dwellings.  All other buildings (i.e. commercial) are to comply with ASHRAE Standard 90.1-2013, as adopted at N.J.A.C. 5:23-3.18. 

NJBPU is currently developing a Cost-Effective Analysis for Amendments to NJ Energy Codes with the Rutgers Center for Green Building to investigate the required payback periods to enable NJDCA to pursue more agressive energy codes. The study will analyze a series of cost-effective amendments to the NJ energy subcode for new residential and commercial buildings and the Rehabilitation subcode for existing buildings. This analysis will be directed toward the cost-effective implementation of beneficial electrification measures in both new and existing buildings.

Last reviewed: August 2021

Residential Codes List All

Compliance with the energy provisions of the New Jersey Uniform Construction Code (UCC) for residential is mandatory statewide as of September 21, 2015, with a six-month grace period for the previously adopted codes to be used to not disrupt projects currently in design-stage. Residential construction must comply as mentioned above. The code includes a modification to Section N1102.4.1/R402.4.1 (Building thermal envelope) of the IRC and IECC which allows for either a visual inspection with checklist or [blower door] testing for compliance with the air barrier and insulation aspects of the building thermal envelope requirements. If testing is used, the 2015 criteria of 3 air changes per hour is the criteria to meet. 

For existing buildings, the Rehabilitation subcode (NJAC 5:23-6) applies certain energy conservation provisions of the new codes based on the scope of the project.

Last reviewed: August 2021

Commercial Code List All

Compliance with the energy provisions of the New Jersey Uniform Construction Code (UCC) for residential and commercial buildings by the aforementioned code is mandatory statewide as of September 21, 2015, with a six-month grace period for the previously adopted codes to be used to not disrupt projects currently in design-stage. The current commercial codes are based on ASHRAE 90.1-2013 and the Department of Community Affairs will be updating energy codes to ASHRAE 90-1-2016 in the summer of 2019.

On September 21, 2015, the Department adopted revisions to the 2015 editions of the International Building Code (IBC), International Residential Code (IRC), International Mechanical Code (IMC), International Fuel Gas Code (IFGC), and International Energy Conservation Code (IECC) as the building, one- and two-family dwelling, mechanical, fuel gas, and energy subcodes, respectively, of the UCC and the 2014 edition of the National Electrical Code (NEC).

In order to implement the most recent published technical standards, in keeping with its statutory charge (N.J.S.A. 52:27D-120), the Department proposes the 2018 editions of the IBC, IRC, IMC, IFGC, IECC, and NSPC, and the 2017 edition of the National Electrical Code (NEC) to update the above referenced subcodes of the UCC with amendments. These proposed amendments, expected to be adopted by August 2019, reflect the changes to the IBC/2018, IRC/2018, IMC/2018, IFGC/2018, IECC/2018, NSPC/2018, and NEC/2017 that modify the codes to align with New Jersey conditions and law.

For existing buildings, the Rehabilitation subcode (NJAC 5:23-6) applies certain energy conservation provisions of the new codes based on the scope of the project.

Last reviewed: August 2021

Compliance List All
  • Gap Analysis/Strategic Compliance Plan: NJ has an Evaluation Plan which was last made public in May 2017. The BPU’s Office of Clean Energy, in conjunction with the independent evaluator, Rutgers Center for Green Buildings, continually updates an Evaluation Plan in order to track previous evaluation activities, provide an indicator regarding planned, future evaluations and solicit input from stakeholders on what future evaluations are needed. In addition to highlighting current priorities, the Evaluation Plan is an important record of regular and cyclical evaluation work, such as cost-benefit analyses and baseline studies, which are used towards more effective policy making.
  • Baseline & Updated Compliance Studies: A baseline study of the multifamily sector in New Jersey was completed in April 2019, available here. A Code Compliance Study is currently underway to assess the code compliance of New Jersey's building stock across market segments. The study is being completed in collaboration with the Rutgers Center for Green Building.
  • Utility Involvement: The Clean Energy Act requires the NJ Board of Public Utilities to develop “quantitative performance indicators” (QPI) via public rulemaking that establishes targets and takes into account each utility’s “support (for) the development and implementation of building code changes…”  The Board established interim QPIs in May 2019 as well as establishing an Advisory Group which will meet to help inform future QPIs. Additionally, utilities may participate on the NJDCA mechanical/energy subcode committee and support the enactment of energy codes as a cost-effective means to reduce energy usage.  They can participate on the advisory board but participation is not mandated.    
  • Stakeholder Advisory Group: The Uniform Construction Code Act establishes a Uniform Construction Code Advisory Board. And under the Uniform Construction Code Advisory Board, there is a mechanical/energy subcode committee which includes code officials, engineers and other stakeholders. This board meets three to four times per year.  
  • Training/Outreach: The Department of Community Affairs offers spring and fall semesters of training each year.  Licensed code officials are required to complete continuing education to maintain their licensed. Visit the NJ Department of Community Affairs for more info regarding NJDCA Continuing Education Seminars.  There are 50+ different Code Official training courses offered, some of which are energy subcode specific.

Last reviewed: August 2021

CHP Summary List All

New Jersey includes CHP in its energy efficiency resource standard and offers several incentives and financing programs for CHP projects. Seventeen new CHP installations were completed in 2018.

Interconnection StandardsList All

Policy: New Jersey Administrative Code 14:4-9

Description: As required by the Board of Public Utilities, each electric utility in the state has approved interconnection standards applicable to CHP and other forms of generation. The interconnection standards have 3 levels: Level 1 for projects <= 10kW; Level 2 for projects <= 2 MW; and Level 3 for projects < 2MW. There are varying fees that scale up in accordance with system size, and varying degrees of review that must occur before a system can interconnect.

Last Updated: August 2019

Encouraging CHP as a ResourceList All

CHP in energy efficiency standards: New Jersey adopted an EERS in May 2018 with 2% electric and 0.75% gas savings goals. The policy specifically excludes natural gas used for CHP from gas savings goals. 

The state also adopted a budget of $29 million in FY 2018 for CHP incentives.

Last Updated: August 2019

Deployment IncentivesList All

Incentives, grants, or financing: New Jersey provides incentives for CHP deployment through several programs.

New Jersey’s Clean Energy Program (NJCEP) offers financial incentives for several types of CHP facilities, including non-renewable, renewable, fuel cell, and waste heat to power systems. The program provides an incentive ($/W) depending on system type and size for projects that meet a 60% HHV CHP efficiency standard. A bonus incentive of 25% of the total system incentive for a system incorporating blackstart technology at a critical facility is now available.

The state’s Cogeneration Tax Exemption provides a sales and use tax exemption on natural gas purchases for customers using gas to fuel on-site energy generation. Additionally, the Act amended the definition of “contiguous property” to include those buildings attached to or served by a district thermal energy system. This definition allows electricity generated by the system to be delivered to other facilities served by the same thermal district energy system, using existing infrastructure and at prevailing wheeling tariffs.

Last Updated: August 2019

Additional Supportive PoliciesList All

Some additional supportive policies exist to encourage CHP in New jersey. The state’s Superstorm Sandy Action Plan includes funding specifically for CHP and recommends that critical infrastructure use CHP in order to increase the system resiliency. New Jersey also changed the definition of contiguous property to help promote CHP system incorporation with district energy systems.

The state's CHP incentive program provides additional bonus incentives to CHP systems with blackstart capabilities at critical infrastrucutre, and supports renewable-fueled systems.

New Jersey has also streamlined its air permitting process by offering a general permit for some eligible CHP systems, allowing a range of facilities to more quickly and easily install CHP technology. The New Jersey Department of Environmental Protection (DEP) developed two GPs: one for internal combustion engines (General Permit CHP-022) and one for turbines (General Permit CHP-021). Each GP contains four different sets of fuel and emission limits, depending on the size of the equipment and how the source plans to operate the equipment.

Last Updated: August 2019

Score: 8.5 out of 20
Utilities Summary List All

Since 2003, the Office of Clean Energy within the Board of Public Utilities has administered the New Jersey Clean Energy Program, which has offered statewide customer energy efficiency programs. 

In May 2018, New Jersey adopted an EERS when the governor signed clean energy bill A3723, which requires that electric and gas utilities achieve a minimum of 2% electric and 0.75% annual gas savings of the average annual usage in the prior three years, within five years of implementation of their energy efficiency and peak demand reduction programs, and until such time as all cost-effective energy efficiency is achieved in each utility territory.

Following many months of work by stakholders, the commission, and staff, the Board of Public Utilities produced a June 2020 Order setting ambitious goals to ramp up annual electric savings to 2.15% and gas savings to 1.1%, exceeding goals first set out in the state's Clean Energy Act. The Order also transitions the utilities to a more central role in program delivery, establishes a performance-based recovery mechanism to encourage utilities to maximize customer savings, and strengthens stakeholder engagement processes with added focus on equity and workforce development.

The most recent budgets for energy efficiency programs and electricity and natural gas savings can be found in the State Spending and Savings Tables.

Customer Energy Efficiency Programs List All

Prior to 2007, utilities were required to administer and implement energy efficiency programs with oversight from the BPU. In 2002, the New Jersey BPU began a re-assessment of this administrative structure and in 2007 program administration was turned over to the Office of Clean Energy (OCE). OCE meets monthly with energy efficiency and renewable energy program managers, the New Jersey Clean Energy Program, and the state's utilities to plan and coordinate programs. The OCE also chairs monthly meetings with stakeholders to solicit input on programs and budgets.

Several utilities provide incentives that supplement New Jersey’s Clean Energy Program or administer energy efficiency programs that do not compete with those offered through NJCEP.  For example, several utilities offer incentives for highly efficient hot water heaters, boilers, and furnaces. While the NJCEP already offers incentives for these products, the aforementioned utilities offer additional incentives to further encourage their customers to purchase these efficient technologies. Some utilities also offer financing options to customers in their service territory who wish to participate in specified NJCEP residential and commercial programs. By offering on-bill repayment options and low-to-zero interest loans to participating customers, these utilities both lessen the cost burden for customers and attract additional participants that may have been otherwise unable to enroll in these programs.

Additionally, several companies offer residential behavioral analysis programs that utilize customer data to provide residents with breakdowns of their energy usage, comparisons to similar homes in the area, and recommendations to optimize their energy use and conserve energy (including enrolling in other energy efficiency programs). Utilities also offer programs focusing on low-to-moderate income customers, small businesses, and hospitals to ensure that all customer segments have the ability to participate in energy efficiency. 

Today, investor-owned utilities are still responsible for collecting the Societal Benefit Charge (SBC) for the programs and then transfer these funds to the state. However, state’s societal benefit charge has repeatedly been reallocated away from energy efficiency programming.

The most recent budgets for energy efficiency programs and electricity and natural gas savings can be found in the State Spending and Savings Tables.

Last reviewed: July 2019

Energy Efficiency as a Resource List All

New Jersey's restructuring statute requires the Board of Public Utilities to perform “comprehensive resource assessments” (CRAs) for energy efficiency and renewable energy resources every four years. These assessments account for system needs and costs. The CRA typically commences with a potential study. The results of the latest benchmarking study of the NJCEP can be found on the NJ Clean Energy Program web site.

Last reviewed: June 2020

Energy Efficiency Resource Standards List All

In May 2018, New Jersey adopted an EERS when the governor signed clean energy bill A3723, which requires that electric and gas utilities achieve a minimum of 2% electric and 0.75% annual gas savings of the average annual usage in the prior three years, within five years of implementation of their energy efficiency and peak demand reduction programs, and until such time as all cost-effective energy efficiency is achieved in each utility territory.

The Board of Public Utilities has adopted utility and state savings targets and quantitative performance indicators (QPIs) based on the 2019 NJ Market Potential Study in transitioning to this new EE framework, slated to begin by July 1, 2021. The utility savings goals, based on the study, are 2.15% for electric 1.10% for gas savings. The Board has established a triennial review process ahead of each utility filing cycle, which will review and establish for the next five program years: targets for utility and state annual energy use reductions, metrics, weighing structure of metrics, cost recovery mechanisms, performance incentive and penalty structure, cost to achieve ranges, and program administration and design. 

Last reviewed: June 2020

Utility Business Model List All

For the next generation of EE programs to be launched in July 2021, utilities will be able to earn incentives based on performance towards their utility-specific targets. The NJBPU as a state agency will not receive performance incentives for achieving energy savings targets. Performance incentives and penalties will take the form of a ROE adjustment applied to EE and PDR program investment. An incentive will be awarded if a utility achieves between 110% and 150% of its target. Achievement of between 90% and 110% of the target will represent compliance. A penalty will be assessed if performance of the target is between 50% and 90%, and a utility will be deemed non-compliant if achieving 50% or less of its target.

The New Jersey Board of Public Utilities (BPU) does not currently permit utilities to collect lost revenues related to reduced sales resulting from energy efficiency programs. Beginning with the transition to the new EE framework adopted by the BPU in June 2020, as per the Clean Energy Act of 2018 each utility shall file to recover on a full and current basis through a surcharge all reasonable and prudent costs incurred as a result of EE and PDR programs, including but not limited to recovery of and on capital investment, and the revenue impact of sales losses resulting from implementation of the programs. Program costs associated with O&M will be expensed and included in a utility's annual cost recovery petition, program investments will be amortized over a 10-year period, there will be no absolute cap on customer distribution rates or bills associated with EE and PDR investments, and carrying cost for program investments will use the capital structure established in each utility's most recent base rate case. Utilities may either use a lost revenue adjustment mechanism (LRAM), or utilize a Conservation Incentive Program, which is currently being designed to be applicable to both gas and electric public utilities. 

Last reviewed: June 2020

Evaluation, Measurement, & Verification List All
  • Primary cost-effectiveness test(s) used: total resource cost

  • Secondary cost-effectiveness test(s) used: utility cost test, participant cost test, societal cost test, and ratepayer impact measure

The NJBPU’s Clean Energy Program evaluation plan is developed and approved annually as part of the establishment of the NJBPU’s Clean Energy Program’s funding level and annual budget (see NJ evaluation plan 2017, on the NJCEP Home page under Public Reports).

The Protocols to Measure Resource Savings (and Generation) are updated annually. The latest EM&V Protocol was approved by the Board at its June 22, 2018, agenda meeting Docket No QO16060525. The protocols are available on the NJCEP Home page under Public Reports.

The NJBPU’s Clean Energy Program is evaluated through a third party contract with Rutgers University Center of Energy, Economic and Environmental Policy (CEEEP) in order to keep the evaluation independent from the direct oversight of the NJBPU and the Program.

According to the Database of State Efficiency Screening Practices (DSESP), New Jersey relies on the Total Resource Cost Test (TRC) and considers it to be its primary cost-effectiveness test. Nominally, New Jersey’s TRC accounts for non-energy benefits such as other energy fuel savings and water savings and quality benefits, but values do not appear to be included in practice. Low-income programs are not required to pass cost-effectiveness tests.

Further information on cost-effectiveness screening practices for New Jersey is available in the Database of State Efficiency Screening Practices (DSESP), a resource of the National Efficiency Screening Project (NESP).

Last reviewed: July 2019

Guidelines for Low-Income Energy Efficiency Programs List All

Requirements for State and Utility Support of Low-Income Energy Efficiency Programs

The State’s low-income energy efficiency program, New Jersey Comfort Partners, arose out of 1999 restructuring legislation that designated a systems benefit charge as the funding source for energy efficiency programs. A low-income program is required as set forth in EDECA 1999 at NJSA 48:3-61. The NJBPU has approved a low-income energy efficiency program since 2001. There appear to be no specific levels of required of spending, although each year the program budget does specify annual goals for number of customers served.

For FY20, the NJBPU has also proposed an increase in the income eligibility limits, from 225% of Federal Poverty Guidelines to 250% of Federal Poverty Guidelines in order to expand the program’s availability and increase access for residents of New Jersey. Annual goals for energy savings and the number of customers served are established in the program filings, during FY2018 the program served 3,894 households and saved 4,394,902 kWh and 248,973 Therms.

Cost-Effectiveness Rules for Low-Income Energy Efficiency Programs

The NJBPU does not require that the Comfort Partners Program meet any cost-effectiveness tests. Implementation of a low income energy efficiency program is required by NJSA 48:3-61 and does not require any cost effectiveness tests. The low income EE CPP based on the energy audit implements all measures at the full cost plus measures required to address health and safety that are within the budget and seasonal spending guidelines.  If this level is not sufficient to implement the measures, the program can request additional approved spending. This process is set in the utilities filing and approved priority list.

On August 2020, the NJBPU adopted the New Jersey Cost Test ("NJCT") as the primary cost-effectiveness test for State and utility administered energy efficiency programs. The initial NJCT includes a 10% low-income benefits adder to account for the additional non-energy benefits to low-income program participants, such as improved health and safety. The newly adopted statewide evaluation structure puts in place a triennial review process to continually evaluate and update the NJCT to ensure that it is properly capturing low-income non-energy benefits.

Coordination of Ratepayer-Funded Low-Income Programs with WAP Services

In addition to opportunities through Comfort Partners, New Jersey’s Department of Community Affairs (NJDCA) administers the federally-funded Weatherization Assistance Program (WAP). The Office of Low-Income Energy Conservation (OLIEC) within the New Jersey Department of Community Affairs (DCA) is responsible for administration of the state’s Weatherization Assistance Program (WAP).The DCA established WAP to aid low-income households, with an emphasis on those who are high-energy users, have a high energy burden, are elderly or disabled, in order to decrease fuel consumption and related energy costs. The program is intended to reduce both the national energy consumption and the impact of higher fuel costs on low-income families. Funds are provided to facilitate several energy conservation measures, including but not limited to building shell, air-sealing, hot water conservation measures, attic, sidewall, and foundation insulation and electric base load measures.   

In order to expand access for low-income residents to energy efficiency opportunities, in 2018 the NJBPU and NJDCA approved a Memorandum of Understanding (MOU), to jointly deliver Comfort Partners and WAP services, in particular situations. The similar mission statements and target populations of the programs make the combination of efforts and resources a good fit for both programs and the MOU allows the NJ to more efficiently and comprehensively serve New Jersey’s residents and provide critical upgrades to residents. Through this MOU, NJBPU and NJDCA are able to coordinate the delivery of Comfort Partners and WAP services, streamline and increase customer access and are ultimately able to address concerns and provide weatherization in homes where otherwise the barriers to efficiency and weatherization were too great for one program to handle alone.

Through the Board's comprehensive June 2020 EE order, Utilities will also be required to provide non-competing low and moderate income energy efficiency programs. Additionally, the Board required staff to work with other state agencies to develop an integrated energy efficiency and health and comfort program and work to identify pathways to a "whole house" program and provide funding in the 5th quarter FY20 budget extension to design and establish this program. 

Last reviewed: September 2020

Self Direct and Opt-Out Programs List All

There are no opt-out programs in New Jersey.

Societal Benefits Credit (SBC) program, with elements of a self-direct program, allows commercial and industrial (C&I) ratepayers to establish a credit against their SBC contributions. No company has implemented an SBC program to date. The credit would be equal to one-half of the costs incurred for the purchase and installation of Clean Energy Program-supported energy efficiency products and services in the preceding calendar year, and up to 50% of the SBC contributions for a given year, per utility account.

The Large Energy Users Program is designed to promote self-investment in energy efficiency and combined heat and power projects with incentives up to $4 million for eligible projects in the states' largest commercial and industrial facilities.

Last reviewed: June 2020

Data AccessList All

Guidelines for Third party access

No requirements are in place, but all usage data will be provided to third party supplier through an EDI system on request.

Requirements for Provision of Energy Use Data

There are no requirements in place, but utilities have been asked to provide this information voluntarily and have done so provided that confidentiality requirements are met.

Energy Use Data Availability

The state does not have an online standardized system through which access to individual and aggregated energy use data may be requested.

Last reviewed: July 2019

Score: 7 out of 13
Transportation Summary List All

The state integrates transportation and land-use planning and has a complete streets policy in place. New Jersey offers incentives for high efficiency vehicles and devotes a significant amount of funding to transportation initiatives.

Tailpipe Emission Standards List All

In January 2006, New Jersey adopted rules to implement the California Low Emission Vehicle (LEV) program beginning in 2009. These rules implement the Air Pollution Control Act provisions at N.J.S.A. 26:2C-8.15, which require the Department to promulgate rules to implement the California LEV program in New Jersey. The New Jersey program contains three components: vehicle emission standards, fleet wide emission requirements, and a Zero Emission Vehicle (ZEV) sales requirement. The rules will require automakers to reduce fleet-wide greenhouse gas emissions from the vehicles they sell in New Jersey 30% by 2016. The state has also adopted California's Zero-Emission Vehicle (ZEV) program, which requires increasing production of plug-in hybrid, battery electric, and fuel-cell vehicles from 2018 to 2025.

On April 3rd, 2018, Governor Murphy reaffirmed New Jersey’s support for federal fuel emissions standards and signed a multi-state agreement on clean vehicles. Furthermore, in December 2018, New Jersey committed to working with Northeast and Mid-Atlantic states to consider the development of a new regional low-carbon transportation policy proposal that will reduce greenhouse gas emissions from the transportation sector. The Transportation and Climate Initiative (TCI) recognizes that a regional low-carbon transportation policy will spur policies and programs to reduce carbon emissions, improve air quality, help communities become more resilient to extreme weather, spur economic growth, and address the disproportionate burdens of climate change on environmental justice communities. Most recently, on July 14, 2020, New Jersey joined 14 other states and the District of Columbia committed to work collaboratively to advance and accelerate the market for electric medium- and heavy-duty vehicles, including large pickup trucks and vans, delivery trucks, box trucks, school and transit buses, and long-haul delivery trucks (big-rigs). The goal is to ensure that 100 percent of all new medium- and heavy-duty vehicle sales be zero emission vehicles by 2050 with an interim target of 30 percent zero-emission vehicle sales by 2030.

Last Reviewed: November 2022

Transportation System Efficiency List All

Transportation and Land use Integration: The New Jersey State Development and Redevelopment Plan aims to implement statewide planning objectives that encourage development in recognized city, town and village centers and a balance of conservation in rural areas to enhance the quality of life for residents. The plan is a cross-institutional effort to promote smart growth across the state, estimated to save as much as $2.3 billion in capital costs in the process, if fully implemented.  Unfortunately, implementation of the state planning effort has languished in recent years. As of August 2009, a required update to the State Plan was long overdue, the State Planning Commission was suffering from a lack of appointments and staff levels at the Office of Smart Growth continued to shrink.

The New Jersey Department of Transportation (NJDOT) continues to run the New Jersey Future in Transportation (FIT) program in an effort to provide affordable and sustainable transportation solutions that break the sprawl cycle and integrate land use and transportation planning. The NJDOT also runs the Transit Village program which encourages transit-oriented development, and the Mobility and Community Form project, which helps communities plan future transportation and land use by preparing a Mobility and Community Form (MCF) Element that combines the circulation and land use elements of their master plans. NJDOT is currently completing signal optimization pilots to reduce congestion and emissions on various major highways throughout the State.

In January 2008, New Jersey passed the “Urban Transit Hub Tax Credit Act,” providing businesses that choose to locate in “urban transit hubs” – defined as the area in a one-half mile radius around rail stations -- with tax credits. This law was amended by the New Jersey Economic Stimulus Act of 2009, requiring businesses to invest at least $50,000,000 in a business or residential facility before it can earn tax credits that can be applied to corporate business taxes, insurance premiums tax or income tax.

On November 2, 2018, Governor Phil Murphy signed into law a bill requiring NJ TRANSIT to establish an office of real estate economic development and TOD. The purpose of the new office was to assess and develop recommendations for economic development and TOD opportunities for parcels of real property owned by NJ Transit. The hope is that the full inventory and emphasis on economic development within NJ Transit will generate more private-sector interest in developing agency-owned properties, ultimately creating a new revenue stream that could ease the burden on riders. Such development could, in turn, complement existing and contemplated TOD projects in both designated Transit Villages and in non-designated municipalities.

VMT Targets: No policy in place or proposed.

FAST Freight Plans and Goals: New Jersey has a state freight plan that identifies a multimodal freight network, but it does not include freight energy or greenhouse gas reduction goals. One interesting efficiency measure in the state’s freight plan is the goal to move road freight traffic away from peak travel hours to take advantage of off-peak period roadway capacity and subsequently reduce idling and congestion.

Last Reviewed: November 2022

Transit Funding List All

No policy in place or proposed.

Last Reviewed: November 2022

Incentives for High-Efficiency Vehicles List All

All zero emission vehicles (ZEV) in the state of New Jersey are exempt from state sales and use taxes. Several incentives for purchasing electric vehicles are in place: Consumers will receive up to $5,000 when they buy or lease an all-electric or plug-in hybrid vehicle with an MSRP below $55,000 in New Jersey. The point-of-sale rebate will equal $25.00 per mile of electric-only range, up to the $5,000 per vehicle maximum. The Post-Purchase Incentive was opened on May 27, 2020. In addition, a 10-year NJ BPU incentive program will provide up to $500 per person for the purchase and installation of home charging equipment.

Last Reviewed: November 2022

Equitable Access to TransportationList All

New Jersey does not have any state programs in place to incentivize the creation of low-income housing near transit facilities, but it does consider the proximity of transit facilities when distributing federal Low-Income Housing Tax Credits to qualifying property owners.

Last Reviewed: November 2022

Appliance Standards
Score: 0 out of 3
Appliance Standards Summary List All

Policy: N.J. Stat. § 48:3-99 et seq., New Jersey Energy Efficiency Product Standards

Description: In 2005 New Jersey Governor Richard J. Codey signed a bill introducing Energy Efficiency Product Standards that established minimum standards for eight products. All eight standards have been preempted by the 2005 federal Energy Policy Act, the latest as of January 1, 2010. Appliance standards in New Jersey are considered and adopted by the Board of Public Utilities in consultation with the Commissioner of Environmental Protection, as established by New Jersey Statute 48:3-99 and the Administrative Procedure Act (N.J.S.A. 52:14B-1 et seq.).

Last Reviewed: June 2019