Energy Savings Improvement Program (ESIP)
New Jersey’s ESIP is a form of energy performance contracting that allows government entities to make energy-related improvements to their facilities using the value of energy savings that result from the improvements.
Status
Applications are open
Schedule
Open year-round
Program Contacts
ESIP Coordinator:
Relevant Audiences
On this page
About the Program
NJ’s ESIP is a form of energy performance contracting that allows government entities to make energy-related improvements to their facilities using the value of energy savings that result from the improvements. The ESIP law was enacted in 2009 and updated in 2012. It provides all types of government entities – from school boards to municipalities to state governments – with a flexible tool to lessen their environmental impact, save money, and reduce their energy usage for minimal costs.
ESIP can help accomplish any retrofit strategy (major HVAC, minor HVAC, onsite generation, facility improvements, etc.) but can also leverage multiple strategies. ESIP can be used as a way to find energy savings; upgrade equipment; and improve indoor air quality. As government entities struggle to offset these costs, a performance contract can be a solution to afford the upgrades. ESIP is based on financing today’s improvements off of tomorrow’s savings for little to no cost.
Cooperative Purchasing Agreement Guidance Update
On March 24, 2025, the NJ BPU issued a guidance update regarding cooperative purchasing agreements.
Direct Install Open Network Guidance Update
On October 9, 2025, the NJ BPU released guidance regarding ESIP and the direct install open network.
Program Process
- Intake Form and Preliminary Audit - First, complete an ESIP Intake Form. Then apply for a free Local Government Energy Audit (LGEA) or hire a state approved auditing firm to perform a facilities audit and determine baseline energy usage, potential energy savings, and suggested Energy Conservation Measures (ECMs).
- Reach out to the BPU’s ESIP Coordinator - Contact NJBPU’s ESIP Coordinator at (609)913-6295 to discuss different models for implementing ECMs:
- DIY – Using an Architect or Engineer of Record to manage projects; public entity must apply for incentives and secure financing; cannot guarantee savings.
- ESCO – Turnkey approach; ESCO runs entire project, requires RFP; option to purchase a savings guarantee.
- HYBRID – ESCO works as a subcontractor to the public entity.
- Determine Financing - Select Lease / Purchase Agreement or Refunding Bond Option (market driven). Explore each option. If possible, use the services of a Financial Advisor.
- Perform an Investment Grade Energy Audit (IGEA) - IGEA is the technical and economic foundation for ESIP projects and provides a comprehensive and deep dive audit to develop your Energy Savings Plan.
- Energy Savings Plan (ESP) Development & Third Party Audit - The ESP is the cornerstone of an ESIP project and should contain:
- Description and cost of all ECMs;
- Incentives available;
- Financial snapshot of repayment term;
- Measurement and Verification Plan (M & V); and
- Details of performance guarantee.
- Third Party Audit of ESP- Hire an independent auditor to certify that the plan savings were calculated properly pursuant to NJBPU protocols and program guidelines; only required out of pocket expense.
- NJBPU Review and Approval- The ESIP Coordinator has 14 business days to review and approve the plan; construction commences upon approval.
- Enjoy your Upgrades!
Preliminary Energy Audit
The first step to commencing an ESIP project is to perform a preliminary energy audit. This assessment of your facilities allows the auditor to recommend energy conservation measures (ECMs). ECMs have different costs, savings and lifespans, and depending on the budget, the entity can consider any or all of the measures for implementation. Certain ECMs are also eligible for rebates or incentives through New Jersey’s Clean Energy Program (NJCEP) or Board-approved utility energy efficiency programs.
Entities can choose either of the following options:
- NJCEP offers a free Local Government Energy Audit (LGEA) that meets the ESIP criteria.
- Hire/perform their own ASHRAE Level II audit (Energy Survey and Analysis) and a Level III audit for lighting (Detailed Analysis of Capital Intensive Modifications).
Whichever audit the entity chooses, the assessment will be utilized in determining the project’s scope, in both the RFP and in the Energy Savings Plan (ESP), which are both submitted to the NJBPU for approval.
The preliminary audit helps identify energy conservation measures and building upgrades, which can lay out the groundwork for the type of ESIP for your project. Contact NJBPU’s ESIP Coordinator to schedule a meeting. The ESIP Coordinator will be involved in the process from the RFP to ESP approval and is always available to answer questions about the process.
RFP Templates
If your public entity is using a retrofit strategy that involves an ESCO (ESCO or Hybrid models), an RFP is required. Please submit the draft RFP (redlined version) to ESIP@bpu.nj.gov for approval. No RFP may be advertised unless it has formal NJ BPU approval.
Contracting units are also reminded of their obligations to meet State Comptroller requirements for public contracts. In accordance with N.J.S.A 52:15C-10, contracting units must notify OSC as early as practicable, but no later than 30 days before advertisement, of any negotiation or solicitation of a contract that may exceed $12.5 million. Contracting units must also provide post-award notification for any contract for an amount exceeding $2.5 million. Notification must be given within 20 days of the award. This information can be found in the Local Finance Notice 2011-17, dated June 16, 2011.
Below are the current RFP templates:
Non-Education ESIP RFP Template Education ESIP RFP TemplateCase Studies
Interested in ESIP? Review the case studies below to see how ESIP helped other local entities.
Vineland Board of EducationMonroe TownshipWest-Windsor Plainsboro Board of EducationApproved Energy Savings Plans
The ESP is the cornerstone of the ESIP program. It lays out what measures will be implemented to save energy, the expected payback period, and how it fits into the overall plan to reduce consumption. The ESP gives a snapshot of the project financial structure. Furthermore, the ESP must be approved by the Board of Public Utilities and remain cash flow positive throughout the term of the project. These plans have a lifespan of 15 to 20 years depending on the ECMs being installed. To submit your ESIP Energy Savings Plan, please contact the ESIP Coordinator using the contacts listed above to request a link to the Dropbox for your entity. No ESP may be acted upon without prior approval by the Board.
All approved plans must be posted to BPU’s Public Docket System. The public entity must post the approved plan on their website, as well. These plans are organized by year and corresponding docket:
2025 Approved ESPs: Docket # EO25010004
2024 Approved ESPs: Docket # EO24010005
2023 Approved ESPs: Docket # EO23010004
2019-2022 Approved ESPs: Docket # EO22100664