This action encourages the municipality to promote New Jersey’s Clean Energy Program (NJCEP) Direct Install (DI) incentive program. DI incentives cover up to 70% of the cost of building energy efficiency upgrades for small businesses. Effective July 1, 2019, entities owned or operated by municipalities, K-12 public schools, and customers located in Urban Enterprise Zones or Opportunity Zones may be eligible for up to 80% of the cost of the installed measures. The benefit to the municipality of promoting energy efficiency for local businesses is strengthening the local economy by helping to reduce operating expenses for small businesses and reducing the community carbon footprint at no cost to local taxpayers. To earn points, a municipality must actively promote the Direct Install program to local businesses in partnership with NJCEP. Municipalities are encouraged to reach out to the local electric and gas utility providers for additional support and partnership opportunities. 

To accomplish this action, the municipality must implement an outreach and education effort detailing the advantages of the Direct Install Program for local businesses, which ideally should result in a 2.5% participation rate based on the total number of commercial and industrial properties in town, as per the New Jersey Department of Community Affairs tax data. Click here to look up the target goal for our community. 

Sustainable Jersey held a webinar on Funding and Incentives from New Jersey’s Clean Energy Program in November 2019, which covers the basics of this action and further details about NJCEP incentive programs for businesses, including Direct Install. To view the webinar video recording, click here, and view the webinar presentation slidedeck, click here. 

Why is it important? 

According to the US Department of Energy, commercial energy use accounted for 26.2% of all energy consumed in New Jersey in 2017. In the commercial sector, much of the energy consumed is used for lighting, heating, and cooling. These three areas of commercial energy use are the prime targets for efficiency improvements in the Direct Install program. By addressing these physical capacity upgrade needs, the Direct Install program helps to reduce community energy usage and the local carbon footprint, leading to a more sustainable future for the community as a whole. 

In addition to the positive environmental effects of reduced commercial energy consumption, the Direct Install program also strengthens the local business community by giving it a competitive cost advantage in both the short term and the long term. Energy efficiency upgrades can help make the business more comfortable (reduces cold or stuffy areas) and more pleasant for customers and employees alike. Reducing energy use reduces operating expenses, which in turn, helps the bottom line for your local businesses. By strengthening the local economy, the program stabilizes and potentially expands municipal tax revenues, while diversifying the municipal tax structure and thus reducing dependence on residential tax revenues. Job creation is also an important benefit since local small businesses are the largest employers in the nation.

New Jersey’s Clean Energy Program (NJCEP)’s Direct Install incentives help small businesses by covering up to 70% of the cost of making their buildings more energy-efficient. Effective July 1, 2019, entities owned or operated by municipalities, K-12 public schools, and customers located in Urban Enterprise Zones or Opportunity Zones may be eligible for up to 80% of the cost of the installed measures. The program usually pays for itself and becomes a net revenue generator in 1-3 years, with savings lasting for many years. Despite the lucrative benefits, the Direct Install program is not well known, and the vast majority of eligible New Jersey businesses have not taken advantage of it.