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New Jersey's 2,000 MW energy storage mandate is the most ambitious on the East Coast. Phase 1 deployed 355 MW of utility-scale storage. Phase 2 will extend incentives to residential and commercial behind-the-meter batteries — and you can prepare now.
The Garden State Energy Storage Program (GSESP) was created by A5267/S4289, signed into law by Governor Murphy in August 2025. The law mandates New Jersey deploy 2,000 megawatts (MW)of energy storage by 2030 — making it one of the most aggressive storage targets in the nation, behind only California and New York.
The legislation directs the NJ Board of Public Utilities (BPU) to design and implement incentive programs across three market segments: utility-scale (front-of-meter) projects, commercial and industrial behind-the-meter systems, and — critically for homeowners — residential behind-the-meter battery storage.
The 2,000 MW target represents roughly 8,000 MWh of storage capacity, enough to power more than 500,000 NJ homes during a 4-hour peak demand event. For context, NJ's peak electricity demand hit 19,800 MW during the July 2025 heat wave. The GSESP target would provide over 10% of peak demand capacity from storage alone.
Previous NJ energy storage initiatives (like the original 2018 Energy Master Plan targets) focused exclusively on utility-scale projects. GSESP is the first NJ program that explicitly mandates residential incentives. This means NJ homeowners will receive direct financial support for installing home batteries — similar to what Massachusetts (ConnectedSolutions) and California (SGIP) already offer.
GSESP Phase 1 (Tranche 1) closed in March 2025, with the BPU announcing awards in June 2025. Three projects were selected, totaling 355 MW of front-of-meter and commercial storage capacity. These utility-scale projects lay the foundation for New Jersey's storage grid, but they don't directly benefit individual homeowners — that's what Phase 2 is for.
Developer: Convergent Energy + Power
Capacity: 200 MW / 800 MWh
Location: West Deptford, Gloucester County
Status: Approved June 2025
Developer: East Point Energy
Capacity: 150 MW / 600 MWh
Location: Sayreville, Middlesex County
Status: Approved June 2025
Developer: NAESC
Capacity: 5 MW / 20 MWh
Location: Multiple Farm Sites, South Jersey
Status: Approved June 2025
Tranche 2 targets an additional 645 MW of energy storage to close the gap between Phase 1's 355 MW and the program's intermediate milestone of 1,000 MW. This round includes utility-scale and larger commercial projects, with the BPU indicating a preference for geographically diverse projects that address grid congestion points identified by PJM Interconnection.
Phase 2 is the portion of GSESP that directly impacts homeowners. While final program rules have not been published, the enabling legislation (A5267/S4289) and BPU staff working papers outline a two-component incentive structure: an upfront capacity payment to reduce installation costs, and ongoing performance payments for grid dispatch during peak demand events.
This dual-incentive model mirrors what has proven successful in other states. Massachusetts ConnectedSolutions pays $225/kWh upfront plus $0.95-$1.40/kWh per dispatch event. California SGIP provides $150-$200/kWh upfront for residential systems. New Jersey's BPU has publicly stated it is studying these programs as templates.
The timing is critical. With the federal Section 25D residential battery tax credit expiredas of December 31, 2025, New Jersey homeowners currently have no federal incentive for residential battery installation. GSESP Phase 2 will partially fill this gap, but the program is expected to be capacity-limited — meaning early participants will benefit most.
One-time payment per kWh of installed capacity to reduce the cost of battery installation. Expected to offset 20-40% of installed cost based on similar programs in MA (ConnectedSolutions) and CA (SGIP).
Ongoing payments for allowing grid dispatch during peak demand events, typically summer afternoons (2-7 PM) and winter mornings (6-9 AM). Payment per kWh discharged to the grid.
Enhanced payment rates during grid emergencies declared by PJM Interconnection. NJ experienced 14 critical peak days in 2025.
Additional incentive for qualifying low-to-moderate income households. Expected to align with NJ Comfort Partners income thresholds (up to 400% of federal poverty level).
The incentive estimates above are based on BPU working papers and comparable programs in other states. Final Phase 2 program rules, incentive amounts, and eligibility requirements have not been published. NuWatt will update this page as official details are released.
While the GSESP Phase 2 upfront incentive won't fully replace the 30% federal credit, the combination of upfront payment plus annual performance earnings means NJ homeowners can recover more over the battery's lifetime than the old tax credit alone provided. A 13.5 kWh system earning $3,000 upfront + $800/year in dispatch payments would recover $11,000 over 10 years — compared to a one-time $4,500 federal credit.
Don't wait for Phase 2 to launch. Battery prices are at historic lows, and installing now means you'll earn TOU savings immediately while positioning yourself for future GSESP incentive payments the moment the program opens enrollment.
Battery prices are at historic lows due to global lithium oversupply. A Tesla Powerwall 3 costs $12,000-$15,000 installed. When GSESP Phase 2 launches, you will already be eligible for performance payments. Do not wait for the incentive to install.
PSE&G, JCP&L, and ACE all have existing demand response programs. Enrollment demonstrates grid-interactive capability and may provide a fast-track to GSESP Phase 2. PSE&G Smart Grid programs pay $0.50-$1.00/kWh during dispatch events.
Not all batteries support grid dispatch. Tesla Powerwall 3, Enphase IQ 5P, Franklin aPower2, and SonnenCore+ all support bidirectional grid interaction required for VPP programs.
GSESP will likely pay per kWh of available capacity. A 13.5 kWh Tesla Powerwall 3 earns more than a 5 kWh Enphase IQ 5P. Consider installing 2 batteries (27 kWh) to maximize both backup capability and future incentive payments.
The federal 25D residential battery credit expired Dec 31, 2025. But NJ Whole Home rebate ($7,500 for qualifying electrification work) and PSE&G 0% financing are still available. These programs may not last once GSESP Phase 2 launches.
You don't have to wait for GSESP Phase 2. These programs are live today and can significantly reduce the cost of battery storage — or even eliminate it entirely when stacked together.
Covers battery installation as part of whole-home electrification projects. Must include at least two qualifying upgrades (e.g., solar + battery, or battery + heat pump).
Learn MoreInterest-free financing for energy efficiency and clean energy improvements including battery storage. 5-year repayment through utility bill.
Learn MoreBatteries charge from solar during midday, discharge during peak TOU hours (2-7 PM summer, 5-9 PM winter). Saves 30-50% on peak rate charges.
Learn MoreBattery storage (when installed with solar) is exempt from NJ property tax assessment. A $15,000 battery adds $0 to your property tax bill.
Learn MoreThe Garden State Energy Storage Program (GSESP) is New Jersey's state-mandated energy storage initiative created by A5267/S4289, signed into law August 2025. It sets a target of 2,000 MW of energy storage by 2030 and directs the NJ Board of Public Utilities (BPU) to create incentive programs for utility-scale, commercial, and residential battery storage projects.
GSESP Phase 2 residential and commercial behind-the-meter incentive details are expected to be released in late 2026, after the Tranche 2 utility-scale awards are announced in October 2026. The BPU has not published a specific launch date for Phase 2, but industry sources expect program rules to be finalized by Q4 2026 with incentive payments beginning in early 2027.
Specific Phase 2 incentive amounts have not been published yet. Based on comparable programs in other states (Massachusetts ConnectedSolutions, California SGIP, New York VDER), we expect an upfront capacity incentive of $150-$300 per kWh plus ongoing performance payments of $0.75-$1.50 per kWh dispatched during grid peak events. A 13.5 kWh battery could receive $2,000-$4,000 upfront plus $500-$1,200 annually.
No. Battery prices are at historic lows due to global lithium oversupply, and the federal 25D residential battery tax credit has expired. Install now to lock in low prices, start earning TOU savings immediately ($400-$800/year), and be ready to enroll in GSESP Phase 2 as soon as it launches. Programs like these typically reward early adopters and may be first-come, first-served.
No. The federal Section 25D residential clean energy tax credit, which included a 30% credit for battery storage, expired on December 31, 2025. There is no federal tax credit for residential batteries in 2026. The GSESP Phase 2 incentive will partially fill this gap for NJ homeowners. Commercial batteries can still qualify for the Section 48 Investment Tax Credit.
Phase 1 (Tranche 1) awarded 355 MW of utility-scale and commercial storage in June 2025. The three projects are: Woods Landing Energy Storage (200 MW) in West Deptford, Two Rivers Energy Center (150 MW) in Sayreville, and NJ Agricultural Energy Storage Cooperative (5 MW) across multiple farm sites. Phase 1 focused exclusively on front-of-meter projects.
Tranche 2 is a 645 MW solicitation for additional energy storage projects to close the gap toward the 2,000 MW by 2030 target. Pre-qualification submissions are due June 10, 2026, full bids due August 7, 2026, and the BPU award decision is expected October 28, 2026. Tranche 2 includes utility-scale and commercial-scale projects.
To participate in GSESP Phase 2 and utility VPP programs, your battery must support bidirectional grid interaction and remote dispatch. Qualifying models include Tesla Powerwall 3, Enphase IQ 5P, Franklin aPower2, and SonnenCore+. Older models like Tesla Powerwall 2 may need firmware updates. Your installer must configure the battery for grid-interactive mode.
Battery prices are at historic lows. Install now, start earning TOU savings immediately, and be first in line when GSESP Phase 2 residential incentives launch. NuWatt handles the full installation and will enroll you in GSESP as soon as it opens.