New Construction FAQs
1. What is the New Construction Program?
The New Construction Program (NCP) offers incentives for energy efficient new buildings and qualifying gut rehabilitation projects in New Jersey. Eligible projects include commercial and industrial buildings, single-family homes, and multifamily buildings.
Four pathways offer different approaches to meeting program requirements:
High Performance PathwayStreamline PathwayBundled PathwayAlternative Performance Pathway
2. Which pathway should I use for my project?
Residential projects use the High Performance Pathway through an approved building certification.
Non-residential projects may use the Bundled, Streamlined, or High Performance pathway, depending on their building type and design.
Qualifying energy-intensive facilities may also use the Alternative Performance Pathway.
Contact the Outreach Team early to discuss your project and available options.
3. When should I apply?
Apply before or early in the design stage so energy efficiency improvements can be incorporated into the project. A project that has begun construction may still qualify if the proposed energy efficiency components or equipment have not been installed before application submission. Measures installed while the project is under review are installed at the applicant’s risk, and equipment that does not qualify will not earn incentives.
4. Can I receive incentives for a completed project?
No. NCP does not offer retroactive incentives for completed projects.
Submit an application through a Partner before the proposed energy efficiency components or equipment are installed.
5. Can I receive both NCP and utility incentives for the same equipment?
No. An energy efficiency measure included in an NCP application cannot also receive an incentive from another NJCEP or New Jersey utility-sponsored energy efficiency program. If a gut rehabilitation project qualifies for more than one program, choose one program for the applicable scope of work.
1. What is the Partner Network, and what do they do?
An approved Partner is an energy professional who works under contract with you to guide your project through the program.
Depending on the pathway, a Partner:
- Evaluates efficiency opportunities
- Prepares energy models or certification documentation
- Submits the application and documents installed measures
- Provides the information needed for incentive approval
For example, a Partner may compare HVAC and envelope options to help your design team meet the selected pathway’s energy performance requirements.
Use the Partner Network directory for find a firm approved for your project’s pathway.
2. Why do I need a Program Partner?
An approved Partner must submit projects for the High Performance, Streamlined, and Alternative Performance Pathways. These pathways require technical analysis or certification documentation, and the Partner helps demonstrate that the project meets program requirements.
Bundled Pathway projects are not required to use a Partner, but they can use one.
Visit our Partner Network for more details.
3. Does the Bundled Pathway require a Partner?
No. You may apply directly, choose an approved Partner, or designate a third-party representative.
If someone who is not an approved Partner will represent you, submit the Authorized Representative Form available on the program website here. All Bundled eligibility, documentation, and verification requirements still apply.
4. Can my contractor, engineer, or energy consultant submit my application?
For Streamlined, High Performance, and Alternative Performance projects, the firm must be approved as an NCP Partner for the selected pathway and complete the required orientation and training before submitting projects. Approval in another NJCEP program does not transfer to NCP.
For Bundled projects, an approved Partner is optional, and an authorized third party may represent you.
If you would like more information about becoming an approved Partner, visit the Partner Network website for required qualification and application information.
5. How do I choose a Partner, and what will their services cost?
Use the Partner Network directory to find a firm approved for your project’s pathway.
Ask the Partner about:
- Relevant project experience
- The services included
- Documentation responsibilities
- Fees
You negotiate the service contract and fees directly with the Partner. Program incentives are paid to the participant unless the participant authorizes payment to someone else.
6. How can my company become a Program Partner?
Visit the Partner Network webpage for required qualifications and application information. Firms may be approved for one or more pathways. Approved firms must complete program orientation and required training before submitting projects. There is no fee to become a Partner.
Questions about applying can be sent to NCP-Partners@trccompanies.com.
1. What types of projects qualify?
NCP supports new construction and qualifying gut rehabilitation projects that meet the selected pathway’s requirements. New construction is a ground-up building with plans prepared and certified by a licensed architect or engineer. The project must also meet utility service, construction timing, scope of work, and other program requirements.
The legacy Pay for Performance demand and 50,000 sq. ft. thresholds are not NCP eligibility criteria.
2. What qualifies as gut rehabilitation?
The guide identifies three types:
1. A change of use and reconstruction that makes recent utility data obsolete; reconstruction of a vacant structure or portion of a building where recent utility data is unavailable
2. Work requiring the building or affected portion to be out of service for at least 30 consecutive days
3. The last category typically includes heating and cooling replacement, electrical replacement, significant envelope work, and occupant relocation.
Contact the Program Team at njcep_ncp@trccompanies.com if you are unsure whether your scope qualifies.
3. Does my building need to pay the Societal Benefits Charge?
Generally, the building must eventually receive electric and/or gas delivery or supply service from a participating New Jersey investor-owned utility and pay the monthly Societal Benefits Charge (SBC).
Participating utilities are
- Atlantic City Electric
- Elizabethtown Gas
- Jersey Central Power & Light
- New Jersey Natural Gas
- PSE&G
- Rockland Electric Company
- South Jersey Gas
Buildings served by a municipal or cooperative electric utility that does not collect SBC may be eligible through the SEP Non-IOU Program.
Contact the Program Team at njcep_ncp@trccompanies.com for guidance.
4. Can one application cover several buildings?
Each NCP application generally covers one building. A single-family application covers one home. A townhome application may include multiple units under one roof, for campuses, garden-style communities, or other projects with multiple buildings.
Contact the Program Team at njcep_ncp@trccompanies.com before applying and plan for separate building applications.
5. Does accepting NCP incentives require payment of prevailing wage?
Certain construction projects receiving BPU financial assistance are subject to prevailing wage requirements.
The guide states that, where applicable, the requirement covers the entire construction project described in the construction contract, including incentivized and non-incentivized work. Customers self-certify compliance by applying to the Program and receiving incentives.
Contact the New Jersey Department of Labor and Workforce Development for guidance on applicability, contract thresholds, wage rates, and compliance.
6. Are any residential projects exempt from the BPU prevailing wage requirement?
The guide identifies an exclusion from the definition of BPU financial assistance for incentives for new construction or weatherization of a single-family home, townhome, or row home, or an apartment building, condominium building, or multifamily home of four stories or less.
This exclusion does not depend on who receives the incentive.
Ask the New Jersey Department of Labor and Workforce Development how this provision and any other applicable wage requirements apply to your project.
1. To whom are the incentives paid?
Incentives are paid to the participant (customer) but can be assigned to the Partner.
2. Can the incentive payments be assigned to Partners?
Yes, but only if the participant indicates this on the Incentive Request forms.
3. Under certain programs, the Partner must be paid and documentation must be provided prior to the participant receiving an incentive payment.
The Partner must ensure the contract structure with the participant covers this item.
4. Are the incentives adjustable or fixed per project?
There will be three incentives. Incentive #1 is based on the size of the facility and Incentives #2 and #3 are based on the level of savings in kWh and/or therms.
5. What if actual post-retrofit savings are higher than estimated?
Incentive payment #2 represents 50% of the total performance incentive, based on estimated savings predicted by the simulation results. Savings in excess of (or less than) the estimate will result in a re-calculation of the total performance incentive. This will be “trued-up” with Incentive Payment #3.
6. The payment per kWh and therm saved is for what period?
Incentive payments #2 and #3 are based on annual electric kWh and natural gas savings, as applicable (not to exceed 50% of total project cost). Incentive #2 is based on estimated annual savings and incentive #3 is based on realized savings in the post-retrofit period.
7. What incentives can be expected for a multi-building (campus type) situation where there are only two meters?
The entire campus must be treated as one project, unless sub-metering has been established. The 15% savings will be achieved on a campus-wide level and one set of incentives will be paid out. Incentive Caps apply.
8. How much of a reduction in kWh (or therms) is required to receive an incentive?
A minimum of 15% source energy reduction is required for existing buildings, which can be achieved through a combination of electric, gas and other fuel source reductions, but incentives will only be paid for electric and natural gas savings. For new construction, a minimum 5% energy cost or source energy savings for commercial and industrial buildings and 15% for multifamily buildings compared to ASHRAE 90.1-2013 is required.
9. What are the 15% savings based on?
For existing buildings, the 15% savings represents source energy savings (estimated Btu site energy savings converted to Btu source energy) and can include electric, natural gas and other fuels (i.e. fuel oil, steam, chilled water, etc.). For new construction, the percent savings represents energy cost or source energy savings compared to ASHRAE 90.1-2013 compliant design.
10. Can fuel oil reduction be included as savings?
Fuel oil (and other fuels) may be included in the savings to meet the 15% source reduction requirement, however no incentives are provided for these fuel types under this program unless there is a fuel conversion to natural gas.
13. Do interruptible gas clients qualify for incentives for therms saved?
Yes, as long as the interruptible gas client has an active account for gas service and pays the Societal Benefits Charge they are eligible for incentives from the program.
14. What qualifies for the Greenhouse Gas (GHG) reduction bonus, and how will it be calculated?
The GHG reduction bonus will follow the incentive table on page 38 of the FY25 Compliance Filing, as found in the TRI-2 Compliance filing. The calculation will be done with a tool required for use and available to Partners. Projects must meet a minimum GHG reduction to become eligible.
15. Does the affordable housing enhanced incentive apply to the whole building or the housing units?
It applies to the whole building.
16. Will the incentives be equivalent to the current programs?
It isn’t easy to compare the programs because they use different calculation methods. Since incentives are calculated based on building square footage, similar standards can result in different incentive amounts in other buildings. The NCP provides higher incentives for more comprehensive energy efficiency. Builders can qualify for more valuable incentives by meeting higher energy efficiency standards.
17. When will incentives be paid?
Incentives will be paid after construction and/or installation is complete, the Partner submits the As-Built documentation, and the Program Team has approved the final inspection and reviewed any applicable NJCEP quality controls that have been successfully completed.
1. What if the 15% source savings cannot be met after the audit is performed?
The program will not provide Incentive #1 if the savings cannot be met or the installation of measures does not move forward. The partner must inform the participant and should make certain that their contract covers this situation. Identified measures may be eligible for NJ SmartStart Buildings incentives.
2. What is the reason behind the 15% savings not being allowed from a single energy conservation measure?
Pay for Performance is designed to be comprehensive in nature, thus savings are anticipated to be provided by multiple energy conservation measures. If savings are anticipated to be derived from a single measure (such as lighting), the participant should be referred to the prescriptive or custom tracks offered as part of the NJ SmartStart Buildings Program.
3. Can solar PV panels and other renewable projects contribute to the 15% savings?
No. Renewable measures that generate power cannot be included in the 15% savings. Solar water heaters and thermal storage are OK.
4. Once I complete my energy reduction plan am I required to continue with the rest of the program?
You are not required to continue with the program, but you will not receive Incentive #1. Incentive #1 is distributed contingent on the installation of the energy efficient measures outlined in your energy reduction plan.
5. Is it a requirement that all energy conservation measures evaluated must be implemented?
The decision on implementation of energy conservation measures (ECMs) is to be determined by the participant with input from the partner. It is not a requirement that all ECMs be implemented as long as the ones selected yield the minimum 15% savings. The ERP requires a list of recommended ECMs (with associated savings), and listing of non-recommended ECMs with an explanation as to why these are not included. Any change in the list of ECMs to be installed after ERP approval requires approval from the program manager.
6. Can energy savings from operation & maintenance items be included (e.g. if economizers are not working)?
Retro-commissioning itself is not considered an energy efficiency measure, although improvements identified through the retro-commissioning process may qualify as measures.
7. What about electric demand reduction measures (e.g. thermal storage)?
Pay for Performance is designed for, and provides incentives for, energy reduction measures. Electric demand reduction measures may benefit the participant and can be included in the ERP, however no incentive is specifically associated with demand savings.
8. Is the use of Portfolio Manager required?
Yes. The data entered into Portfolio Manager provides pre- and post-benchmarking for the project, including the actual source energy reduction.
9. What effect would a change in operating hours have on the project?
If a substantial change in operating hours occurs during the construction and/or post-retrofit period, this change would be accounted for by documenting the changes and adjusting the hours of operation in the baseline model through a baseline adjustment. In some cases, a change to the baseline simulation model may also be required. Contact program manager.
10. Since the program is designed around utility billing history, how will the Partner get this when in many cases this goes to corporate management offices?
Participant and Partners will need to make arrangements to obtain the utility history.
11. Will utility release forms be available?
Yes, utility release forms can be obtained by contacting the Program Manager.
12. Is it a requirement to meter each piece of equipment?
Any existing equipment or recommended measure that cannot be incorporated into the simulated building model will require pre and post metering. Have your partner refer to the program guidelines.
13. Can ASHRAE 90.1-2007 be used as the baseline for new construction projects?
No. ASHRAE 90.1-2013 was adopted in New Jersey in September 2015. All projects participating in the new construction component of Pay for Performance are required to use the 2013 version of the code when calculating energy savings. For existing building, recommended measures must be at least as efficient as required by code or the program guidelines, whichever is more stringent. For new construction, recommended measures must be better than required by code.
14. What can be included in total project cost?
Partner fees, equipment and installation costs, design fees, construction management, measurement and verification / commissioning fees are included.
15. What if another energy conservation measure is found during the construction phase?
This would be considered a scope change and may require re-submittal of the ERP. The performance incentives would be recalculated to include the additional estimated energy savings. Contact program manager.
16. Can the participant choose a different partner after the energy reduction plan has been submitted and approved?
The participant can choose to change partners. Partners should make certain that their contract covers this situation so they are paid for their services. Should the participant choose not continue in the Pay for Performance Program, the funds associated with Incentive #1 must be returned by the participant.
1. Some participants such as school districts may not be able to commit to the Pay for Performance process, due to New Jersey laws that require such entities to go out to bid.
Pay for Performance must comply with any state and local procurement laws, but will work with partners and participants in these particular situations on how best to proceed. Keep in mind that partner services are considered “professional services” and may be subject to alternative procurement requirements. If the physical installation of recommended energy efficiency measures is bid to a different company from the partner company, make sure that the partner remains involved to ensure installation is done per the energy reduction plan and to develop the post-construction benchmarking report.
2. What types of bid and/or construction documents are required?
The partner role is to perform services as necessary to ensure that the measures are bid, designed, and installed as presented and modeled in the ERP. Submission of these documents is not required.
3. If a participant requires a multiple bid process and must select the low bidder, which is not the partner, is the applicant still entitled to Incentives #2 and #3?
The participant can only receive Incentives #2 and #3 if an approved partner remains with the project in some capacity. Partners should be aware of the procurement requirements of the participant to guard against this.
1. What happens if the building becomes vacant, or if there is a shift in operation due to economic issues, after the baseline is developed?
This must be accounted for through a baseline adjustment.
2. What happens if the 15% source energy reduction target is not met after the post-construction benchmarking?
If the minimum 15% savings is not met using 12 months of post-construction billing history, an additional 12 months (in two 6 month increments) will be allowed to accomplish this goal. If savings are below the 15% minimum but at or above 5% the project will still be eligible for an incentive, although at a reduced rate. So long as the savings are at or above 5%, the minimum incentive paid is $10,000 or committed value, whichever is less, assuming all required data and documentation is submitted. If savings are less than the 5% there would be no Incentive #3 paid. Incentives #1 and #2 are not required to be returned to the Program. The scaling down of incentives does not apply to high energy-intensity users, which are required to demonstrate at least 4% energy savings.
3. Certain programs allow payment in shorter time period if performance criteria are met (i.e. 6 months worth of billing history), will New Jersey’s Clean Energy Program consider this?
No. Incentive #3 will be calculated based on 12 months of post-construction utility bills.
1. Can tax incentives associated with EPACT be applied to a Pay for Performance project?
Yes. Information on EPACT tax incentives are available here.
2. Do the simulation guidelines require modeling of the actual utility rate tariff?
Yes.
3. Can you provide tariff inputs for simulation?
Due to the number of approved simulation programs and wide variation in regulated tariffs and 3rd party energy provider contracts, the program manager cannot provide tariff inputs.
4. What is the purpose of calibrating the baseline model?
Calibration of the baseline model with actual utility bills is required to ensure that the model accurately represents energy use at the facility. This will result in higher accuracy of estimated savings.
5. Suppose weather conditions are an anomaly in the post-retrofit year?
Portfolio Manager and program tools normalizes for weather.
6. Is there a method for ranking the energy conservation measures?
It is up to the partner and participant to determine the ranking of the measures. Reference program guidelines for additional information.
7. What is the basis of the site to source conversion?
Site to source conversions are based on EPA’s Portfolio Manager software.
8. The simulation software reports energy use in terms of site energy, will we need to convert it to source energy units?
The conversion is done automatically in Portfolio Manager and in the ERP tables provided.
9. Are Incentives #2 and #3 based on site or source energy?
Incentives for the existing buildings component are calculated based on site energy, in standard units (kWh or therms). New construction is calculated based on square footage.
10. If a building is being brought up to code (e.g. more ventilation, etc.), will there be any allowance for this in the modeling?
The model must incorporate recommended measures as they will actually affect the building. Energy increases may count against the 15% savings, although allowances for baseline adjustments are possible. Refer to the partner and program guidelines.
1. What if achieving 15% savings in my building is impossible?
There is an exception to the 15% energy reduction requirement for the Existing Buildings component of Pay for Performance. A custom savings threshold may be offered to customers whose annual energy consumption is heavily weighted to manufacturing and process loads. This approach will be reviewed on a case-by-case basis and must be pre-approved by program representatives. In order to be considered for a custom savings threshold (i.e., other than a 15% reduction in total building source energy consumption), the project must involve:
- A manufacturing facility, including such industries as plastics and packaging, chemicals, petrochemicals, metals, paper and pulp, transportation, biotechnology, pharmaceutical, food and beverage, mining and mineral processing, general manufacturing, equipment manufacturers, datacenters, and hospitals.
- Manufacturing and/or process-related loads, including data center consumption, consume 50% or more of total facility energy consumption. For hospitals, 50% of more of the gross floor area must be used for general medical and surgical services and 50% or more of the licensed beds must provide acute care services.
Energy target for projects meeting the above criteria will be 4% of total building source energy consumption.
Industrial/Manufacturing buildings may participate in Pay for Performance. The entire building must be considered, including all process equipment, and minimum savings must be achieved through multiple measures. If the project scope is limited to one specific improvement (e.g. conveyor belt controls), and/or the minimum energy savings is not feasible, the project should apply for incentives under the Prescriptive and Custom Measures component of NJ SmartStart Buildings.
Water/Waste-Water Treatment sites, landfill sites, and similar open-plan facilities may participate in Pay for Performance. The entire site must be treated as one project, all buildings and process equipment must be considered, and minimum savings must be achieved through multiple measures. Incentive #1 will be based on total site square footage, which will include the total square feet of all buildings and process equipment bound by property lines. Aerial photos or site-plans demonstrating the total square footage must be submitted with the Application. If the project scope is limited to one specific improvement (e.g. VFDs on pumps), and/or the minimum energy savings is not feasible, the project should apply for incentives under the Prescriptive and Custom Measures component of NJ SmartStart Buildings.
Datacenters may participate in Pay for Performance. The entire building, datacenter included, must be treated as one project, and minimum savings must be achieved through multiple measures. The project should apply for incentives under the Prescriptive and Custom Measures component of NJ SmartStart Buildings if:
- The project scope is limited to one specific improvement (e.g. HVAC controls), and/or the minimum energy savings is not feasible, or
- The datacenter is a stand-alone facility (i.e. is not part of a larger office building, or other complex, or
- The datacenter is part of a larger building, but improvements are limited to the datacenter.
1. Should I enroll my multifamily building in the Home Performance Program or Pay for Performance Program?
Download the multifamily flow chart to determine whether your multifamily building fits into the Residential program or the Commercial programs. If you believe your project has fallen into the wrong category please contact program representatives at 866-NJSMART.
2. What if my multifamily building consists of multiple garden-style buildings?
Garden style apartment complexes usually consist of multiple low-rise apartments, cooperatives, condominiums and/or townhouses surrounded by landscaped grounds.
These types of complexes will be treated as one project under Pay for Performance. In other words, if there are 10 garden-style buildings that are part of one multifamily community, all 10 will be aggregated into one Pay for Performance application. Exceptions to this rule may be considered by the Program Manager on a case-by-case basis where financial constraints prevent the entire complex from participating at once, or where parts of the complex are determined to be better suited for Home Performance with ENERGY STAR. The 100kW participation threshold will be met through this aggregation (including common area and in-unit billing). The 15% savings requirement (as well as all other program requirements) will be achieved in aggregate, as well.
1. Will Pay for Performance have a portal?
A partner portal is available for approved partners. Request portal information from the Program Manager at P4P@njcleanenergy.com.
2. What is the estimated timeframe for receiving incentive money?
Between 45 and 60 days from incentive authorization.
3. Can an ENERGY STAR rating be achieved through Pay for Performance?
Yes, the measures installed under Pay for Performance could result in the building being eligible for the ENERGY STAR Label if the facility scores a 75 or higher. Please refer to the ENERGY STAR rules and requirements.
4. Can the partner seek work through the program or must they wait to be contacted by a potential participant?
Partners are encouraged to seek participants and bring them into the program.
5. When should I apply for SmartStart rather than Pay for Performance (P4P)?
If you have the option of pursuing either P4P or SmartStart, consider TWO things:
- Scope of Work – SmartStart has a very specific equipment list for which it provides incentives, although the Custom Measure path is fairly open to a wide range of technologies. Through the SmartStart program a project can consist of as little as one measure or several measures. The P4P Program is open to a wide range of energy efficiency upgrades, but scopes of work must be comprehensive involving multiple measures that meet minimum performance requirements.
- Budget - P4P is time intensive, which translates to a bigger investment. There really needs to be considerable savings involved to make P4P worthwhile - especially for smaller facilities.
Here are some cases where SmartStart would be a better option:
- The project consists of minimal upgrades, or a single upgrade OR
- You have a “tight” budget OR
- You have a “short” deadline.
Here are some cases where Pay for Performance would be better:
- The scope of work involves comprehensive lighting, HVAC, and envelope improvements OR
- You have complex technologies in the building OR
- You have time and budget to commit to investigating all potential energy opportunities in the facility.
When in doubt, a Pay for Performance partner may perform a no-cost energy assessment and evaluate the results. If the results are not meeting your needs, then SmartStart may be a better route. Keep in mind that many Pay for Performance partners are also knowledgeable in SmartStart.
1. What is the Bundled Pathway?
The Bundled Pathway offers a prescriptive approach requiring two or more eligible measures to participate and is available only to non-residential buildings. It uses a points system for each measure being installed, and incentives are awarded to projects that achieve the required minimum points. The Bundled Pathway does not offer the GHG reduction bonus or enhanced incentives.
2. What does a typical Bundled Pathway project look like?
The Bundled Pathway requires the implementation of a bundle of relatively typical above-code energy conservation measures (ECMs). Eligible ECMs under this pathway consist primarily of electric efficiency equipment and efficient building envelope and insulation measures.
3. What is the Streamlined Pathway?
The Streamlined Pathway calculates savings using an online modeling tool called Sketchbox. To learn more about Sketchbox, visit https://slipstreaminc.org/sketchbox. This pathway is only available for select non-residential buildings and provides the opportunity to earn an extra GHG reduction bonus and enhanced incentives.
4. What does a typical Streamlined Pathway project look like?
The Streamlined Pathway encourages deeper energy savings than the Bundled Pathway but requires less time and expense than the High Performance Pathway. While it requires some modeling of ECMs, it is performed in a web-based interface that requires minimal inputs and generates quick and accurate projected savings.
5. What is the High Performance Pathway?
The High Performance Pathway encourages the deepest energy savings and the most significant incentives. Projects following this pathway must either:
- Develop whole-building energy modeling to demonstrate above-code savings (“ASHRAE Modeling Approach”), OR
- Certify the project following an approved national proxy certification listed below:
- LEED V4.1 (Non-residential)
- PHIUS Core, Zero, or Core REVIVE 2021
- PHI V10 Classic, Plus, or Premium
This pathway resembles the current/legacy Pay for Performance and Residential New Construction Programs. The High Performance Pathway will also offer an extra GHG reduction bonus and other enhanced Incentives.
This is the only pathway available to residential projects (single-family, townhomes, multi-family).