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New Jersey has a 2,000 MW storage mandate and an open solicitation worth 645MW — and a warehouse battery cannot bid into any of it. Here is which phase your project is actually in, and what the Board has and has not decided.
Not yet. The Garden State Energy Storage Program runs in phases, and the only phase now taking applications — Phase 1, Tranche 2, 645 MW with bids due October 5, 2026 — is restricted to front-of-the-meter, transmission-scale projects of roughly 5 MW AC and up. Behind-the-meter commercial storage belongs to Phase 2, the distributed segment, which the Board expects to launch in 2026 with incentive values it has not yet published.
GSESP is one program with two open questions and one closed one. Phase 1 is closed to you: it procures transmission-scale storage through competitive bidding, paid in dollars per MW per year over 15years, and the program FAQ states plainly that a behind-the-meter project is not eligible. Phase 2 is your phase, and it is real — the Board has committed to a distributed fixed incentive and a distributed performance incentive, with a provisional target of 500 to 800 MW over 2026-2030. What Phase 2 does not have is a price.
That is not a reason to stall. The federal Section 48E credit on storage, 100% first-year bonus depreciation and demand-charge reduction are all available now and none of them wait on the Board. The one decision GSESP genuinely affects is when you energize.
Three New Jersey programs get conflated in commercial storage conversations. They pay for different assets, and only one of them is open to a behind-the-meter battery.
| Program | What it pays for | Typical host | Status |
|---|---|---|---|
| GSESP Phase 1 (Transmission Fixed Incentive) | Front-of-the-meter storage interconnected at transmission scale | Independent power producers and developers, roughly 5 MW AC and up | Tranche 2 open, bids due October 5, 2026 |
| GSESP Phase 2 (Distributed Fixed + Performance Incentives) | Distribution-connected storage, including behind-the-meter commercial batteries | Warehouses, manufacturers, campuses, municipal buildings, schools | Expected to launch in 2026 — incentive values not yet published |
| SuSI / Administratively Determined Incentive (ADI) | The solar generation itself, per MWh produced, for 15 years | Net-metered non-residential solar up to 5 MW | Open and paying — unaffected by GSESP |
Residential and very small commercial
Most single-site commercial installations
Industrial, campus and multi-building loads
Size classes are defined in the program FAQ. They are the frame the Board will price against; the prices themselves are not set.
Because Phase 1 was deliberately narrowed. Board Staff had considered including front-of-the-meter distribution connections and then recommended against it, limiting Phase 1 incentives to transmission-scale systems to align with the pending legislation that became Assembly Bill A5267. The result is a procurement built for independent power producers, not for load-serving businesses.
A behind-the-meter battery is not eligible for GSESP Phase 1. Phase 1 is a competitive procurement for front-of-the-meter, transmission-scale systems, and the program FAQ says so directly: a behind-the-meter project would not be eligible for Tranche 1, which is specifically intended for front-of-the-meter systems.
The Board approved 355 MW on March 5, 2026, against an Order target of 350-750 MW. Three projects were selected:
The Board projects ratepayer savings of $169M over the life of the program, funded from existing Societal Benefits Charge (SBC) funds — no new rate increase.
645 MW, opened under Executive Order 2, signed January 20, 2026. Eligible: Transmission-scale standalone storage, and solar-plus-storage projects that do not qualify for storage incentives under the Successor Solar Incentive (SuSI) Program.
Effective size floor under A5267, per the program FAQ.
Award period, paid at a constant annual rate in dollars per MW per year.
Non-refundable application fee. It was changed from refundable to non-refundable before the program launched.
This is the question every New Jersey business asks, and the honest answer is that the Board has not said. What follows separates what has actually been decided from what is still open, so you can tell which parts of a vendor proposal are load-bearing.
An administratively determined fixed incentive, offered through capacity blocks whose size the Board expects to set on an annual basis.
A payment tied to what the battery delivers when the utility calls it. The June 2025 Order directs the electric distribution companies to develop design proposals; it does not fix the final design.
The Board has not published Phase 2 incentive amounts. The June 18, 2025 Order states that incentive levels for the distributed segment "will be set to reflect market conditions at the time those phases of the program are released", and the program FAQ still describes the Phase 2 design as yet to be determined. Any per-kWh or per-kW figure circulating for a New Jersey commercial battery today is an estimate someone built from other states, not a New Jersey number.
Phase 2 eligibility, as recommended in the June 18, 2025 Order, reaches distributed standalone storage and storage paired with a distributed Class I renewable resource, provided the energy storage system is installed after the effective date of Phase 2. A battery energized before that date should not be assumed to qualify retroactively.
If your facility sits in an overburdened community, an adder is anticipated. The Order defines the category as any census block group, as determined in accordance with the most recent United States Census, in which: (1) at least 35 percent of the households qualify as low-income households; (2) at least 40 percent of the residents identify as minority or as members of a State-recognized tribal community; or (3) at least 40 percent of the households have limited English proficiency.
The Order defines overburdened communities and anticipates an adder for them, but states that further revision to the OBC adder will be made during the development of the Phase 2 distributed incentive segments. The adder value is not published.
A potential Phase 3 — a Transmission Performance Incentive — is deferred. It is not open, and no timetable has been set.
Three value streams are live right now, and none of them depend on the Board finishing Phase 2. Two are federal and calculable to the dollar; the third depends on your own tariff and has to be modelled.
Energy storage technology is not subject to the December 31, 2027 placed-in-service deadline or the July 4, 2026 begin-construction trigger — both apply to applicable wind and solar facilities only, and Section 48E(e)(4)(C) expressly excepts energy storage technology (IRS Notice 2025-42, section 2.02). A standalone commercial battery remains eligible for the statutory 6% Section 48E credit, increased to 30% when the applicable wage and apprenticeship requirements are met, under the standard clean-electricity phase-out that starts at the later of 2032 or when U.S. greenhouse gas emissions from electricity are 25% of 2022 emissions or lower.
Energy storage technology is its own qualifying category under Section 48E(c)(2). There is no requirement that a commercial battery be paired with solar or charged from a renewable source to claim the credit.
One caveat travels with this: the OBBBA prohibited-foreign-entity and material-assistance rules do apply to storage for construction beginning after December 31, 2025 (IRS Notice 2026-15). Component sourcing has to be documented at procurement, not at filing.
Expressed per unit of cost on purpose: the only honest cost input is your own quote. Scale it to yours. Figures use a 21% federal rate and ignore state tax.
| Installed battery cost | $100,000 |
| Section 48E credit at 30% | $30,000 |
| Depreciable basis after the 50% basis reduction | $85,000 |
| First-year deduction at 100% bonus | $85,000 |
| Tax value of that deduction at 21% | $17,850 |
| Federal recovery, first year | $47,850 (48%) |
Bonus depreciation is 100% and permanent under the restored Section 168(k) — not the superseded phasedown that still appears in older commercial guides. The five-year MACRS schedule then applies to whatever basis remains, which at full bonus is nothing.
For most New Jersey commercial accounts, the demand charge is the largest single line a battery can attack. It is billed on your highest metered demand in the period, so shaving a handful of hours a month can move a bill that thousands of kilowatt-hours of energy savings would not.
What we will not do is print a dollar-per-kW figure for PSE&G, JCP&L or Atlantic City Electric. Commercial demand rates vary by service classification, voltage level, season and rider, and a number copied from a general tariff summary is wrong more often than it is right. Read yours off your own bill — it is a separate line, quoted in dollars per kW — and model it.
Model it in the commercial storage calculatorThe solar half has a published price where the storage half does not. New Jersey's Administratively Determined Incentive pays per MWh generated for 15 years, set by market segment and project size:
| Segment | Size | Rate | Public entity |
|---|---|---|---|
| Rooftop, carport, canopy & floating solar | Under 1 MW | $110/MWh | $130/MWh |
| Rooftop, carport, canopy & floating solar | 1 MW to 5 MW | $100/MWh | $120/MWh |
| Ground mount | Under 1 MW | $90/MWh | $110/MWh |
| Ground mount | 1 MW to 5 MW | $85/MWh | $105/MWh |
Rooftop, carport, canopy and floating solar are a single market segment, so a canopy and a roof array of the same size earn the same rate. The public-entity column adds the +$20/MWh adder available to projects benefiting municipalities, school districts and government bodies. Full detail on the New Jersey commercial solar guide.
Everything below is worth doing whether or not the Phase 2 numbers turn out to be generous. None of it commits you to an install date.
A commercial battery is sized against your billed peak, not your annual kWh. Your utility can release interval data for the account. Without it, any sizing proposal you receive is a guess, and a battery sized off a guess is the single most common way commercial storage economics go wrong.
Demand-charge reduction is a saving on your own bill and is available today. A GSESP Phase 2 incentive would be a payment from the program and does not exist yet. Any proposal that blends them into one number is hiding which half is real.
Distribution-connected storage still goes through the utility interconnection process, and that queue is the long pole on most commercial projects. Starting it does not commit you to installing.
The performance half of Phase 2 pays for what the battery delivers when it is called. A system that cannot accept an external dispatch signal cannot earn a performance incentive under any design the Board has described.
The June 2025 Order conditions distributed eligibility on the system being installed after the effective date of Phase 2. If the incentive is decisive for your project, the install date is a program-eligibility decision, not just a construction-schedule one.
Phase 2 documentation requirements are not published. What is published is the safety and code evidence the Board required on the transmission side, and it is a reasonable read on the bar a distributed program is likely to set:
Not for a behind-the-meter battery. The solicitation that is open — Phase 1, Tranche 2, bids due October 5, 2026 — procures 645 MW of transmission-scale, front-of-the-meter storage. A behind-the-meter battery is not eligible for GSESP Phase 1. Phase 1 is a competitive procurement for front-of-the-meter, transmission-scale systems, and the program FAQ says so directly: a behind-the-meter project would not be eligible for Tranche 1, which is specifically intended for front-of-the-meter systems. Commercial behind-the-meter storage is the subject of Phase 2, the distributed segment, which the Board expects to launch in 2026.
The residential side of the same distributed segment.
How storage economics work across every state we serve.
Model demand-charge savings against your own tariff.
Why the 2027 solar deadline does not reach a commercial battery.
ADI rates by segment, MACRS, and the public-entity adder.
What the utilities call, and what dispatch obligations look like.
We model demand-charge reduction against your tariff, keep the federal and program value streams separate, and tell you plainly which parts of the incentive picture are not yet decided.