The New Jersey Board of Public Utilities (BPU) has initiated a multi-phase incentive program, the Garden State Energy Storage Program (GSESP), to deploy 2,000 megawatts (MW) of electricity storage statewide by 2030. This move, outlined in a June 18, 2025 order, represents the first major step in fulfilling the mandates of the 2018 New Jersey Clean Energy Act, aiming to significantly enhance grid reliability and integrate renewable energy sources.

Phase 1 of the GSESP, scheduled for implementation in 2025 and 2026, will focus on transmission-scale battery storage, specifically targeting Storage as a Transmission Asset (SATA) applications. These systems are vital for integrating intermittent renewable energy into the existing grid and for deferring or avoiding new traditional transmission infrastructure. The BPU has divided Phase 1 into two tranches, with Tranche 1 soliciting bids for 350-750 MW by October 31, 2025. The pre-qualification process commenced on June 25, 2025, with a final bid submission deadline of August 20, 2025. Tranche 1 is open to standalone grid-supply energy storage systems and storage additions to existing solar or solar-plus-storage resources, provided they are interconnected behind the meter.

Strict qualification criteria for Tranche 1 prioritize projects that are ready to initiate construction, emphasizing an accelerated timeframe. Projects must demonstrate an approved interconnection agreement with PJM or equivalent, with the BPU noting hundreds of MWs of “shovel-ready” transmission-scale capacity already having PJM approval. Incentives for selected projects will be paid out at a fixed annual rate per megawatt per year for a 15-year period. Selection will primarily be based on the lowest required incentive, determined by dividing the requested annual incentives by the project’s expected average accredited capacity over the first five years of commercial operation, utilizing PJM’s Effective Load Carrying Capability (ELCC) projections.

Phase 2 of the GSESP is slated to launch in 2026, addressing distribution-scale battery projects. While specific details are pending, this phase is anticipated to offer both fixed and performance incentives through administratively determined capacity blocks. A potential Phase 3, focusing on a transmission performance incentive, is currently deferred. The BPU has affirmed its intention to fund the GSESP through existing Clean Energy Program budgets and Regional Greenhouse Gas Initiative (RGGI) revenues, explicitly stating that the program will not result in an increase in Societal Benefit Charge rates for ratepayers.

Eligible applicants include government and private entities, though Electric Distribution Companies (EDCs) are precluded from applying. Projects cannot have commenced construction prior to application submission. The comprehensive application process includes a non-refundable fee of $200 per MW and requires detailed documentation on interconnection rights, site control, financial capability, safety standards, community benefits, and a planned commercial operation date no later than 30 months after the application period closes, with a guaranteed COD within 150 days thereafter. The BPU retains the right to reject bids deemed too expensive relative to their benefits, ensuring ratepayer value.