NJ COOL PROGRAM

The NJEDA Board has approved a Phase 2 of the NJ Cool Pilot Program. The Program is not yet accepting applications, please check back for updates on the application opening date.

Phase 2 of the NJ Cool Pilot Program is a $25 million program launched by the New Jersey Economic Development Authority (NJEDA) to provide grants to commercial, industrial, and institutional building owners and tenants undertaking retrofit construction projects that reduce operating greenhouse gas emissions from existing buildings in State-designated Overburdened Community and Adjacent Community census blocks. Eligible project locations must fall within the blue or yellow shaded areas mapped on the Overburdened Communities | NJ Environmental Justice Mapping, Assessment and Protection Tool (EJMAP)

The NJEDA will provide grants ranging from $50,000 to $1 million to reimburse eligible buildings for construction costs from projects that upgrade building heating and cooling systems to less polluting alternatives and install on-site renewable energy generation or energy storage systems. This pilot is funded by the Regional Greenhouse Gas Initiative (RGGI) proceeds allocated to NJEDA and will accelerate the adoption of more environmentally friendly building systems, technologies, and construction practices within New Jersey

ELIGIBILITY
GRANT AWARD
ELIGIBLE USE OF GRANT FUNDING
APPLICATION PROCESS
FEES

ELIGIBILITY REQUIREMENTS

Applicant

• Applicants must be Commercial, Industrial, or Institutional building owners OR equivalent tenants seeking to complete retrofit construction projects in existing eligible building spaces.
• Institutional buildings include owners OR tenants that serve a non-profit or public purpose such as a library, hospital, public school, institution of higher education, municipal utility, public recreation or cultural facility, or government entity.
• The term “government entity” includes local and municipal government entities, but for the purposes of this pilot, State government entities are not eligible.
• Commercial buildings include private commercial use building owners OR tenants whose primary use of the building is commercial operations that meet the definition of Property Class 4A.
• Industrial buildings include private manufacturing building owners OR tenants whose primary use of the building is manufacturing or industrial operations that meet the definition of Property Class 4B.
• Tenants must demonstrate owner approval and a valid lease for one year beyond the length of the proposed project’s construction timeline and provide a landlord certification approving the project.
• Commercial and Industrial applicants must have less than $5 million in revenue as demonstrated on most recent annual tax documentation.

A maximum of $3 million in total grants will be made available per Employer Identification Number (EIN).

Building

Buildings must meet the follow requirements

Project must be located within New Jersey State Designated Overburdened Communities (OBCs) or a formally designated Adjacent Communities at time of application as defined by the New Jersey Environmental Justice Law, per NJDEP EJMAP tool.

AND Meet one of the following property classes as defined by NJAC 18:12-22

• Class 4A: Commercial Property
• Class 4B: Industrial Property
• Class 15A: Public School Property
• Class 15B: Other School Property
• Class 15C: Public Property
• Class 15D: Church and Charitable Property
• Class 15F: Other Tax-Exempt Property

Project
Projects must include one (1) scope selection from each of the following two (2) categories:

1. Renewable Energy Generation or Energy Storage
• On-site renewable energy generation (solar, geothermal, etc.) 
• On-site energy storage (battery, thermal, etc.) 
AND

2. Clean Heating and Cooling
• Electrification/Fuel Switching of Space Heating Systems
• Refrigeration Modernization of Space Cooling Systems

Project must demonstrate total eligible costs of at least $100,000.

GRANT AWARD

Award size

The minimum grant award size is $50,000. The maximum grant award size is $1,000,000 per project. A maximum of $3 million in total grants will be made available per Employer Identification Number (EIN).

• Grant awards will cover 50% of eligible project costs.
• An additional 10% bonus, and a maximum reimbursement rate of 60% of total eligible project costs is available for projects completing full building electrification, defined as switching 100% of a building’s combustion-based space heating loads to non-combustion-based heat systems, rather than the minimum 75% requirement.

The Program will not provide reimbursement for costs already incurred prior to application approval.

Disbursement Schedule

NJEDA will disburse funds via two payments to the Applicant for reimbursement of eligible project costs at a 50% rate. Up to one-half of the maximum eligible grant award will be available for reimbursement as an optional progress payment after grant agreement is fully executed and before construction is completed. The balance of the grant award will be available for disbursement at project completion when all eligible project work is completed and accepted by the applicant. Final reimbursement will be based on submitted proof of actual project expenses (receipts, contractor invoices, etc.), signed progress/completion documents, and project photos.

Eligible project costs

• Construction labor and/or equipment provided by Public Works Registered Contractor that are directly related to emissions reductions/energy efficiency improvements or enabling work necessary for proposed emissions reducing/energy efficient building systems to be operational (i.e., upgrading electric panels, structural improvements for rooftop solar or HVAC systems)
• Equipment and/or materials procured directly by the applicant that are directly related to emissions reductions/energy efficiency or enabling work necessary for proposed emissions reducing/energy efficient building systems to be operational

Ineligible project costs

• Soft costs: including but not limited to energy audits, professional design services, permitting fees, inspection fees
• Equipment and labor costs to install new combustion-based heating systems (e.g., boilers, furnaces), regardless of efficiency
• Interior finish improvements and upgrades not related to operating energy/emissions reductions (ex: flooring, artwork)
• Other building system upgrades that are not related to energy/emissions reductions (ex: fire sprinklers, security cameras), even if required for overall building code compliance
• Furniture: non-permanent items (ex: desks, chairs, cabinets)
• Prior energy efficiency/emissions reductions improvements begun or completed before time of application approval
• New construction, including enlargements or additions to existing buildings that increase overall building square footage
• Facility or site acquisition
• Fines incurred because of code or zoning violations during construction project(s) associated with this grant
• Costs not included in the approved project scope.

Additionally:

Except for projects participating in the NJEDA’s Retrofit program, and NJ Clean Energy New Construction Program (Gut Rehab) or Large Energy Users Program, the grant award is stackable with other incentives from utilities and/or federal, state, and local government agencies. NJEDA will conduct a review in coordination with other State agencies to ensure there is no duplication of benefits.

ELIGIBLE USE OF GRANT FUNDING

Eligible project costs

Ineligible project costs

APPLICATION PROCESS

Applications will be evaluated on a first-completed application, first served rolling basis.

Step 1 – Application Requirements: Applicant submits application to NJEDA, which shall include, among other items:

Building address and property information (size, property class, etc.)

Proof of compliance with eligible building property classes including but not limited to property tax documentation, municipal/county records, or similar documentation

Proof of ownership/proof of owner permission:

If Applicant leases space, a copy of their lease and a certification from the landlord that they have reviewed and approved the proposed facility improvement(s).

If Applicant owns space, a deed, property tax statement, or current mortgage statement from the lender.

• Description of the proposed project
• Photos of the existing building space and heating or cooling equipment
• Cost estimate budget spreadsheet using NJEDA template, which is supported by:
• Quote(s) from contractor(s) that are registered with New Jersey Department of Labor Public Work as a Publics Works Registered Contractor with costs consistent with New Jersey State prevailing wage rates
• Vendor quotes or similar retailer price information for any relevant items to be purchased directly by the Applicant
• Estimated project schedule
• Requested grant award amount
• Expected utility/state energy efficiency incentive payments (if applicable)
• Energy utility bill(s) or annual summary of energy use, and/or energy consumption (e.g. oil, propane) data for prior 12 months of operation
• Green building certification being pursued (if applicable)
• Energy Emissions Summary Form, using NJEDA template, which is supported by calculations.

Step 2 – Application Review: NJEDA reviews the submitted application materials and performs a completeness review of each submitted application. If the submitted application is incomplete, staff shall send written notice providing applicants fifteen (15) business days to provide the missing documents or information in their application. If at the end of the 15-day period, the Applicant has not responded, their application will be deemed incomplete and will be administratively withdrawn by NJEDA staff. If an Applicant responds within the 15-day period but provides insufficient information, the application may be declined and given a right to appeal.

Step 3 – Application Approval: If eligible and applicable, NJEDA will provide an approval letter to the applicant with the maximum potential grant award available for the project. The Applicant will have two (2) months from notice of application approval to provide proof of funding for total estimated project costs plus an additional 15% of overall project costs as contingency to allow for potential cost overruns that may arise during construction before entering into a grant agreement. Proof of funding can include bank account statements, financing agreement, or similar indication of available working capital for the project costs. Additional financing provided by NJEDA may be used to cover project costs not eligible under the program. Additional financing provided by NJEDA may also be used to cover project costs paid up front by the Applicant prior to submitting for NJ Cool grant reimbursement.

If not already provided, the applicant must provide a current tax clearance certificate at the time of grant agreement.

Step 4 – Construction Initiation: Project construction activity must commence on site within six (6) months of grant agreement execution, or the applicant must demonstrate that permit applications (if required) are pending with relevant building authorities, with the possibility for six-month extension(s) at the discretion of the Authority.

Step 5 – Construction Completion: Applicants will have two (2) years from project construction commencement to achieve project completion, with the possibility for six-month extension(s) at the discretion of the Authority.

FEES

NJEDA will charge a non-refundable $500 application fee per project application.

ELIGIBILITY REQUIREMENTS

Applicant

Applicants must meet the following eligibility requirements:

Commercial, industrial, or institutional building owner OR a commercial, industrial, or institutional tenant with landlord/building owner approval to complete the proposed project
Have a valid New Jersey tax clearance certificate no older than 180 days at time of application approval
Be in good standing with the New Jersey Department of Labor and Workforce Development and New Jersey Department of Environmental Protection
Demonstrate proof of funding/financing for the estimated project costs plus 15% project contingency following grant award approval and before finalizing grant agreement
Participants in the NJ Clean Energy New Construction Program (Gut Rehab) or Large Energy Users Program are not eligible to participate in the NJ Cool Program Pilot
Please note, religious affiliated entities are subject to additional review from the Attorney General’s Office.

Building

Buildings must meet the following eligibility requirements:

Existing building located in:
- New Jersey Environmental Justice Law designated Overburdened Community (OBC) census block or formally designated Adjacent Community census block. See: Overburdened Communities | NJ Environmental Justice Mapping, Assessment and Protection Tool (EJMAP)
- The municipality of Newark, Edison, or Atlantic City
Meet building occupancy class Mercantile Group M, Assembly Group A-2, Business Group B per Chapter 3 of the New Jersey Building Code. OR Meet one of the following property classes as defined by NJAC 18:12-22:
Class 4A: Commercial Property
Class 4B: Industrial Property
Class 15A: Public School Property
Class 15B: Other School Property
Class 15C: Public Property
Class 15D: Church and Charitable Property*
Class 15E: Cemeteries and Graveyards
Class 15F: Other Tax Exempt Property

*Please note, religious affiliated entities are subject to additional review from the Attorney General’s Office.

Project

Projects must meet the following eligibility requirements:

All work must be conducted in accordance with NJ prevailing wage and affirmative action requirements
Total eligible project costs must be greater than or equal to $100,000 (there is no upper limit to project costs)
Not consist of new construction or enlargements (adding square footage to the building)
Project scope must include:

A. Switching (75% or more) of building space heating loads from existing fossil fuel-based combustion systems to non-combustion-based heating systems with low to zero direct operating emissions. (see Key Definitions section below)

and/or

B. Replacing (75% or more) of the building’s existing high global warming potential (GWP) refrigerants with lower GWP alternatives. (see Key Definitions section below)

Plus, optionally

C. Supporting work that further reduces operating emissions and/or improves energy efficiency of the building, including but not limited to:

Installing on-site renewable energy generation and/or storage systems
Replacing gas powered appliances (ex: hot water heaters, clothes dryers, kitchen equipment) with electric alternatives
Installing building management systems or energy load controls
Conducting weatherization or building envelope (ex: façade, doors, windows, insulation) upgrades
Installing heat recovery equipment
Replacing lighting with more efficient equipment and/or controls

Note, if the Applicant is a tenant, the minimum 75% switching requirement for heating load or existing refrigerants will only apply to the portions of the building within the tenant’s lease or the building systems affecting the tenant’s space within the overall building.

Please be advised: New Jersey State law prohibits most cannabis license and certification holders from receiving or continuing to receive an economic incentive from the NJEDA. If the applicant, or any person who controls the applicant or owns or controls more than one percent of the stock of the applicant, has applied for or received a license or a certification from the New Jersey Cannabis Regulatory Commission (NJ-CRC), the applicant is ineligible for this program and should not proceed with an application. If an application is received from an applicant that meets this criteria, the application will be declined and the application fee will not be refunded.

GRANT AWARD

Maximum grant award will be calculated based on 50% of total eligible project costs. Grant awards will be a minimum of $50,000 with a capped maximum award amount of $1,000,000 per project. Grant awards will be calculated based on eligible project costs net of any expected incentive payments from NJ BPU/Clean Energy Programs or New Jersey utility programs.

Eligible Project Costs:

Materials, labor, and/or equipment provided by Publics Work contractor that are directly related to emissions reductions/energy efficiency improvements or enabling work necessary for proposed emissions reducing/energy efficient building systems to be operational (i.e., upgrading electric panels, structural improvements for rooftop solar or HVAC systems)
Equipment and/or materials procured directly by the Applicant that are directly related to emissions reductions/energy efficiency or enabling work necessary for proposed emissions reducing/energy efficient building systems to be operational

Ineligible Project Costs:

Soft costs: including but not limited to energy audits, design professional services, 3rd party construction management costs, permitting fees, commissioning costs, inspection fees
Interior finish improvements and upgrades not related to operating energy/emissions reductions (ex: flooring, artwork)
Other building system upgrades not related to operating energy/emissions reductions (ex: fire sprinklers, security cameras), even if required for overall building code compliance
Furniture: non-permanent items (ex: desks, chairs, cabinets)
Prior energy efficiency/emissions reductions improvements began or completed before time of application approval
New construction, including enlargements or additions to existing buildings that increase overall building square footage
Facility or site acquisition
Fines incurred because of code or zoning violations during construction project(s) associated with this grant
New fossil fuel-based systems, including but not limited to, new fossil fuel-based heating systems or new back-up power generation equipment.

CONTRACTORS

What requirements are contractor(s) subject to on this project?

Contractors must be registered as a New Jersey Department of Labor and Workforce Development (DOL) Public Works Contractor. More about Registered Public Works Contractors can be found here
Contractors must agree to pay prevailing wage, which is set by county and by construction trade
Contractors with 4 or more total employees must abide by affirmative action requirements
See additional information at https://www.njeda.gov/affirmativeaction/
To help connect potential applicants with NJDOL Registered Public Works Contractors, the NJEDA will develop and maintain a public list of NJDOL Registered Public Works Contractors that have expressed interest in the program. This list will be made available as an optional resource to potential applicants. If you are a Registered Public Works Contractor and would like to be on this list, please click her e.

EMISSIONS CALCULATIONS

Applicant must submit as part their application the annual and total projected operating greenhouse gas and co-pollutant emissions avoided as a result of the project. These calculations must be prepared by a qualified professional (see list below). See program Emissions SOP for guidance on how these calculations should be prepared and the Summary Form for a reporting template that must be uploaded with submitted applications alongside supporting documentation. Please note, these estimates are for program reporting and tracking purposes. This reporting is required by the Regional Greenhouse Gas Initiative (RGGI), the source of funding for the NJ Cool Program. The magnitude of the projected emissions avoidance does not affect program eligibility or potential award size. See optional emissions calculator tool available to assist with your efforts. LINK TO EXCEL CALULATOR

Qualified professionals include but are not limited to:

Licensed engineer (NJ state professional engineer or other state’s equivalent)
Licensed architect (NJ state registered architect or other state’s equivalent)
Certified Energy Auditor (CEA certification from the Association of Energy Engineers)
Certified Energy Manager (CEM certification from the Association of Energy Engineers)
Energy Management Professional (EMP certification from the Energy Management Association)
Building Energy Assessment Professional (BEAP certification from ASHRAE)

APPLICATION PROCESS

Applications will be reviewed on a rolling basis. Applications will go through the following review process:

Step 1: Applicants submit application and supporting documents, requesting a grant award amount based on estimated eligible construction costs.

Step 2: NJEDA reviews application materials and if acceptable provides approval of a maximum grant award amount. Please note, religious affiliated entities are subject to additional review from the Attorney General’s Office.

Step 3: Applicant has 2 months from application approval to provide proof of funding for total estimated project costs plus an additional 15% contingency.

Step 4: NJEDA reviews proof of funding documentation. If acceptable, applicant will enter into grant agreement with NJEDA. Additionally, the applicant will be required to demonstrate adequate insurance coverage.

Step 5: Applicant has 6 months from completion of grant agreement to begin construction activities on the building site.

Step 6: Applicant has 2 years from start of construction to complete construction and submit proof of expenses for reimbursement. Applicant can submit proof of expenses for reimbursement in two occurrences: When 50% of estimated eligible project costs are incurred by the applicant and when project construction is fully complete. In order to be eligible for reimbursement, the Applicant’s project must be in compliance with NJ Prevailing Wage and Affirmative Action requirements.

FEES

Application fee: non-refundable $1,000 fee for applying to the program.

Completed Projects

Edison 27 Investors LLC 2147 Route 27 Edison

Samarpan at Edison LLC 490 Route 1 Edison

A complete list of approved NJ Cool projects can be found on the New Jersey RGGI Climate Investments Dashboard.

1. PROJECT MUST INCLUDE AT LEAST ONE OF THE FOLLOWING:

A. HEATING FUEL SWITCHING

Switching (75% or more) of building space heating loads from existing fossil fuel-based combustion systems to non-combustion-based heating systems.

B. REPLACING REFRIGERANTS

Replacing (75% or more) of existing high global warming potential (GWP) refrigerants (700+ GWP) with lower GWP alternatives.

2. OPTIONAL WORK ALSO ELIGIBLE FOR FUNDING

C. SUPPORTING WORK

Supporting work that further reduces operating emissions and/or improves energy efficiency of the building, including but not limited to:

Energy Load Controls

Solar Panels

Kitchen Electrification

Envelope Improvements

Battery Storage

Lighting Upgrades

Equipment Electrification

Energy Recovery Strategies

Building Control Systems

Fossil fuel-based combustion heating systems: Heating systems that burn fossil fuels (i.e.: natural gas, propane, heating oil) to warm interior building spaces through distribution of hot air, water, steam, or another medium.

Non-combustion-based heating systems with low to zero direct operating emissions: Heating systems that don’t burn any material to warm interior spaces. Examples include but are not limited to air source heat pumps, ground source heat pumps, water source heat pumps, or variable refrigerant flow (VRF) systems.

Refrigerants: Halogenated gases (i.e.: hydrofluorocarbons (HFCs), or HFC blends) used for cooling (refrigeration and air conditioning) within buildings.

High Global Warming Potential (GWP) Refrigerants: For the NJ Cool Program, high GWP refrigerants eligible for replacement grants are defined as refrigerants with a Global Warming Potential greater than or equal to 700 (100-year GWP value).

Lower GWP Alternative Refrigerants: New refrigerants being installed under the NJ Cool Program must have a lower GWP than the existing high GWP refrigerant being replaced and must be permissible for installation per latest relevant federal, state, and local regulations. The following links provide additional information regarding refrigerants and relevant regulations:

The American Innovation and Manufacturing (AIM) Act: https://www.epa.gov/climate-hfcs-reduction
US EPA Transition Guidance Released October 2023: https://www.epa.gov/system/files/documents/2023-10/technology-transitions-final-rule-fact-sheet-2023.pdf
New Jersey Department of Environmental Protection: https://dep.nj.gov/ghg/ghgmr-rule/refrigeration/

NJ COOL PRGRAM PHASE 2 BOARD MEMO

QUESTIONS

If you want to be included in future outreach or have questions about the NJ Cool Pilot Program, contact NJEDA at njcool@njeda.gov.