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Pay for Performance FAQs

1.  What is New Jersey’s Pay for Performance (P4P) program?

Pay for Performance is part of New Jersey’s Clean Energy Program through which eligible existing and new commercial, industrial, institutional and multifamily buildings can take advantage of performance-based incentives to construct an energy reduction plan with the help of a program partner like Associated Renewable to achieve at least 15% energy cost reduction from implemented measures. As a program partner, Associated Renewable will help you develop an energy-saving plan for each project with a whole-building technical component of a traditional energy audit, a plan for funding the energy-efficient measures and a construction schedule for installation of proposed measures.

 

2.  Are existing buildings and new construction both eligible for program incentives under NJ P4P?

Yes, existing buildings with peak electric demand of at least 100 kW in any of the preceding 12 months as well as new construction exceeding 50,000 square feet of planned conditioned space are eligible to receive Pay for Performance program incentives.

 

3.  What incentives are offered under the NJ P4P (Pay for Performance) program?

Incentive #1 is based on the size of the facility (peak demand of at least 100 kW for existing buildings) and incentives #2 and #3 are based on the level of savings in kWh and/or in therms.

Incentive # 1: For existing buildings it ranges from $5,000 to $50,000 (based on $0.10 per sq. foot). For new construction the maximum incentive is $25,000 for this level.

 

Incentive #2: For existing buildings, incentive is based on projected energy savings and capped at 25% of total project cost. For new construction, the incentive is $0.50 per gross heated sq ft.

 

Incentive #3: For existing construction, incentives are limited to $1 million per gas and electric account per building; maximum of $2 million per project. For new construction, the incentive amount (performance-based) ranges from $0.75 to $1.00 per gross heated sq ft.

(Total value of Incentive #2 and Incentive #3 may not exceed 50% of the total project costs)

 

4.  Who are the incentives paid to?

The participant (customer) receives the incentives. Incentive payments are not assigned to partners, who are only paid by the participants.

 

5.  What are the requirements for existing buildings to participate in NJ P4P?

Existing commercial, industrial, and multifamily buildings with a peak demand in excess of 100 kW in any of the preceding twelve months are eligible to participate.

 

6.  What are the requirements for new construction to participate in NJ P4P?

New commercial, industrial, and multifamily buildings with 50,000 square feet or more of planned space, as well as buildings undergoing substantial renovation are eligible to participate.

 

7.  How much energy reduction is required to receive an incentive?

For existing buildings, 15% source energy savings (electric, natural gas and other fuels* i.e. fuel oils, steam, chilled water etc.) are required to be eligible for incentives. For new construction, 15% energy cost savings are required that can be compared to ASHRAE 90.1-2007 compliant design and be outlined in the design development documents.

*These fuels may count towards the energy savings eligibility requirement but will not receive P4P incentives (See item 9)

 

8.  The incentives per kWh and therms are applicable to which phase of the program?

Incentives #2 and #3 are based on annual electric kWh and natural gas savings, as applicable (not to exceed 50% of the total project cost).

 

9.  Can fuel oil reduction be counted towards energy savings required?

Yes, fuel oil reductions can be counted towards the minimum required source energy savings of 15%, however, no incentives are provided for these fuel types (only electric and natural gas savings are eligible for incentives).

 

10.  Can 15% energy savings come from a single energy conservation measure?

No, 15% energy savings have to be achieved through multiple energy-efficient sources under the Pay for Performance program, which has been formulated as a comprehensive energy reduction initiative. Therefore, savings cannot be derived from a single measure (e.g. lighting retrofits). For single measure energy saving incentives, entities are encouraged to apply for New Jersey’s SmartStart Buildings Program.

 

11.  What if the 15% energy savings cannot be achieved after the energy audit is performed?

After the audit is performed in which measures identified elicit at least 15% source energy savings, incentive #1 can only be awarded if the actual savings from installation are realized. If the savings cannot be met or the implementation does not move forward, incentive #1 will not be provided. The program partner should inform the participant of this criteria and the contract between them should cover this contingency. In that case, identified measures can then apply for NJ SmartStart Buildings incentives.

 

12.  What happens if the 15% source energy reduction is not met after post-construction benchmarking (Existing Buildings only)?

If the building cannot meet the 15% energy reduction target using 12 months of post-construction billing history, an additional 6 months will be allowed to accomplish this target. If the goal is not met even after this 18 month period, Incentive #3 will not be paid. Incentives #1 and #2 will not be affected by this situation.

 

13.  What if post-retrofit savings are actually higher than estimated?

Incentive #2 represents half of the total performance-based incentive, based on the estimated savings proposed by the simulation results. If actual savings are in excess of (or less than) the estimated savings, the total performance incentives will be recalculated in conjunction with Incentive #3.

 

14.  Can gas consumption (therms) be combined with the kW to reach the minimum 100 kW peak demand eligibility requirement?

No, only the electric demand can be used to determine eligibility for the program’s incentives.

 

15.  Is it required that all evaluated energy conservation measures must be implemented?

It is not required that all energy conservation measures (ECMs) be implemented if a minimum 15% of the energy savings are achieved through a combination of selected measures. However, the energy reduction plan (ERP) should document all proposed measures and also highlight the ones that are not implemented with the respective reasons for elimination cited.  Changes in the list of ECMs to be implemented after ERP approval need to be approved further by the program manager.

 

16.  Do I need a program partner to develop an energy reduction plan?

Yes, the New Jersey P4P program requires that participants engage an approved program partner to construct an energy reduction plan (ERP), plan for funding and conduct installation of selected energy conservation measures. The partner will walk you through the entire application process and submit an ERP, a complete benchmarking report and the partner-participant contract.

 

17.  What are the major steps involved in applying for the NJ P4P program?

These are the major steps to become a participant in New Jersey’s Pay for Performance program:

1. Select an approved program partner from the list available on NJCleanEnergy.com/P4P

2. Submit the completed application, participation agreement and required documentation with your partner’s assistance

3. Receive approval notice from the program representatives

4. Develop a benchmarking plan for your building with your partner and create an energy reduction plan (ERP) to achieve no less than 15% energy savings

5. Submit your ERP, benchmarking report and partner-participant contract to be reviewed by program representatives

6. With the help of your partner implement energy saving measures and monitor construction to achieve expected performance goals

 

18.  Are there any types of entities that are exempt from the requirements of P4P?

Buildings that fall into one of the following five customer classes are not required to meet the 100 kW or 50,000 square foot eligibility requirement in order to participate in the program: hospital, public colleges and universities, 501(c)(3) non-profits, affordable multifamily housing, and local governmental entities (including K-12 schools).

 

19.  What are the benefits of engaging in the P4P program?

Save 15% or more on the energy consumption in your buildings

Construct your building to achieve energy costs 15% below the current energy code

Take advantage of program funds to upgrade your facility’s infrastructure and achieve whole-building energy-efficiency

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Tuesday, February 14, 2017 - 13:01

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