Pay for Performance Program
Administered by New Jersey Board of Public Utilities, Office of Clean Energy
This New Jersey incentive program helps commercial and industrial buildings reduce energy costs through comprehensive upgrades to lighting, HVAC, controls, and other systems. You must work with an approved Program Partner and have electric or gas service from a participating utility; buildings generally need at least 200 kW peak demand (or 100 kW for multifamily), and you'll receive three payments as you complete an energy plan, install measures, and submit a final benchmarking report. Note: the program closes to new applications on October 31, 2025.
This program offers your commercial and industrial clients variable incentives ($/kWh, $/therm, or $/sq ft) based on projected energy savings rather than fixed rebate amounts, requiring you to be on the approved Program Partner list and guiding clients through an energy reduction plan, installation, and post-construction benchmarking to unlock three milestone-based payments. Hospitals, nonprofits, public universities, and local government entities have relaxed size requirements, expanding your potential customer base.
The Pay for Performance program, administered by the NJ Board of Public Utilities and funded by the Societal Benefits Charge (SBC), calculates variable performance incentives tied to verified energy savings for comprehensive whole-building retrofits across utility service territories (PSEG, NJNG, Jersey Central, Atlantic City Electric, Rockland, and Elizabethtown Gas). The program closes October 31, 2025, with a successor New Construction Program launching May 1, 2025; it targets non-residential buildings meeting minimum demand thresholds (200 kW existing, 100 kW multifamily, 50,000 sq ft new construction with 15% reduction targets), with exemptions for institutional entities, and operates through three-stage milestone payments contingent on plan approval, measure installation, and performance verification.
Program details
- Program ID
- 3330
- Last updated
- 7/25/2025
Eligibility
- Sectors
- commercial industrial local government nonprofit schools state government federal government institutional
- Technologies
- lighting chillers furnaces boilers air conditioners energy mgmt. systems/building controls motors comprehensive measures/whole building
Program summary
This program will close to new applications on October 31, 2025. Its successor, the New Construction Program, opened on May 1, 2025.
The New Jersey Clean Energy Program (NJCEP) offers the Pay for Performance incentive program for comprehensive energy efficiency for whole-building improvements. The incentives are categorized into Existing Buildings and New construction. The program is available to all commercial and industrial buildings. The program is administered by the NJ Board of Public Utilities.
Eligibility
The program is funded by the State Societal Benefits Charge (SBC), hence it is only available to non-residential retail electric and/or gas service customers of the following New Jersey utilities that collect the SBC: Atlantic City Electric, Jersey Central Power & Light, Rockland Electric Company, New Jersey Natural Gas, Elizabethtown Gas, PSE&G, and South Jersey Gas. Customers that purchase only natural gas from a participating utility are only eligible to receive incentives for natural gas measures.
In order to qualify for the Existing Buildings program, commercial and industrial buildings must have a peak demand of kilowatt (kW) of at least 200 kW in any of the most recent last months, multifamily buildings can have a peak demand of 100 kW.
New commercial, industrial and multifamily buildings must have 50,000 sq ft or more of gross heated/conditioned space and must have targeted 15% energy reduction in order to qualify for the New Commercial Buildings program. Market Manger has the discretion of approving the projects that are less than 10% below the requirement.
Hospitals, public college and universities, non-profits, affordable multifamily housing, and local governmental entities are exempt the 100 kW and 50,000 sq ft requirement.
Program Description
The program requires participants to use an approved Program Partner (see website for a list of approved partners) in order to receive incentives. The Program Partners are qualified energy efficiency technicians who work directly with the program participant to recommend and install energy efficient measures in the buildings.
Rather than offering specific rebate levels for specific equipment types, the Pay for Performance program calculates the performance incentive (Payments II and III below) as a variable $/kWh, $/therm, or $/sq. ft. incentive based on projected energy savings. Three separate payments exist based on the achievement of program milestones (described below). Incentive amounts are arrived at differently for existing buildings and new construction projects
The incentives are offed in three phases upon completion of each of the program milestones, i) approval of an Energy Reduction Plan, ii) installation of all recommended measures per plan, and iii) completion of post-construction benchmarking report.
Contact & resources
- Contact email
- P4P@NJCleanEnergy.com
- Additional resources
Please verify current program details with the administering agency before making any financial decisions.
