RETROFIT NJ Program – Coming Soon
The Reducing Emissions through Retrofits, Optimization, Fuel-switching, and Innovative Technologies (RETROFIT NJ) Grant Program is a $75 million pilot program launched by the New Jersey Economic Development Authority (NJEDA) to provide financial assistance to multi-pronged, large-scale retrofit projects that enable holistic energy improvements at buildings, campuses, and multi-building facilities.
The NJEDA will provide grant awards ranging from $2.5 to $12.5 million to reimburse applicants for eligible hard and soft construction costs, including design, equipment, construction, and commissioning from projects that significantly reduce carbon emissions, serve as replicable models, accelerate New Jersey’s clean energy transition, and stimulate economic growth in the clean energy industry
This pilot is funded by the Regional Greenhouse Gas Initiative (RGGI) proceeds allocated to the NJEDA and will accelerate the adoption of more environmentally friendly building systems, technologies, and construction practices within New Jersey.
Applicants
Applicants must meet the following eligibility requirements:
- Applicants must be Commercial, Industrial, or Institutional building owners OR equivalent tenants seeking to complete retrofit construction projects in existing eligible building spaces. Tenants must demonstrate owner approval and a valid lease for one year beyond the length of the proposed project’s construction timeline.
- Institutional buildings are defined as those buildings 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 applicant must also be in substantial good standing with the New Jersey Department of Labor and Workforce Development and NJ Department of Environmental Protection to participate in the program.
- The applicant must provide a current tax clearance certificate at the time of grant agreement execution to demonstrate the applicant is properly registered to do business in New Jersey and in substantial good standing with the NJ Division of Taxation.
Building
Buildings must meet the following eligibility requirements:
- Existing building located in the state of New Jersey. Meet one of the following property classes as defined by NJAC 18:12-22:
- Class 4A: Commercial Property
- Class 4B: Industrial Property
- Class 4C: Apartments (for purposes of this Program, applicants that are Class 4C must be multi-family that are owned by a commercial business or institutional entity)
- 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
- Funds can be used to support multiple building projects within one application if buildings are adjacent or in a campus style arrangement. Campus-wide and multi-building facilities are defined as a group of two or more buildings owned and/or leased by either a single entity or a consortium of two or more building owners/leaseholders (“Consortium”). If the latter, a lead entity must submit the grant program application on behalf of the Consortium, or the Consortium can utilize an existing or create a newly formed business or institutional entity with its own specific EIN that represents the interests of the Consortium for the purposes of the proposed grant project.
Project
- Projects must either involve Thermal Energy Networks OR include work from at least three of the following scope categories:
- On-site renewable energy generation (solar, etc.)
- On-site energy storage (battery, thermal, etc.)
- Electrification/Fuel Switching of Heating Systems
- Refrigerant Replacement for Cooling Systems
- Energy Efficiency Improvements (BMS, envelope, heat recovery, lighting upgrades, green roofs/cool roofs, electrifying appliances, etc.)
- Projects must have a minimum total eligible overall cost of $5,000,000.
- Projects must be located within New Jersey.
- Applicants must provide, at time of application, a verified projection from a qualified third-party professional for reducing/avoiding at least one metric ton of carbon dioxide equivalent (CO2e) for every $250 in requested NJEDA grant award amount over the project’s useful life (e.g. a $5 million grant award would need to show that the proposed project can reduce at least 20,000 metric tons of CO2e over the project’s useful life). Qualified third-party 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 the American Society of Heating, Refrigeration, and Air-Conditioning Engineers)
- The applicant and any collaborators performing capital work will be subject to labor compliance, including New Jersey affirmative action, prevailing wage requirements, and the requirement to complete New Jersey Contractor Registration.
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.
Award Size:
- For all projects, the minimum grant award size is $2,500,000. For projects involving Thermal Energy Networks (TENs), the maximum grant award size is $12,500,000 per project/Employer Identification Number (EIN). For all other projects, the maximum grant award size is $10,000,000 per project/EIN.
Funding Set-Aside:
- After the Program application is open to the public, 50% of the grant’s funding pool ($37,500,000) will be set-aside exclusively for applications submitted for projects in Overburdened Communities and/or for Institutional applicants for one calendar year. Upon expiration of this set-aside, any unallocated set-aside funding will be open to all eligible applicants on a first-come, first-served basis.
Total Disbursement:
- NJEDA will provide a maximum disbursement of 50% of total eligible project costs for for-profit commercial projects, and a maximum disbursement of 60% of total eligible project costs for Institutional and non-profit projects, up to the maximum allowable grant award amount of $12,500,000 for TENs and $10,000,000 for all other projects.
Disbursement Bonuses:
- The maximum disbursement amount will be increased by an additional 5% if the applicant’s proposed project/building is located within an Overburdened Community (OBC) or adjacent census block. Please use the EJMAP tool to determine whether the building(s) proposed for your project are located within an Overburdened Community (OBC). Properties in these areas will appear within the turquoise-highlighted zones on the map. If your project has multiple impacted buildings, all buildings must be in an OBC to qualify for this bonus.
Disbursement Schedule:
- Maximum eligible grant award size will be determined at time of application approval. NJEDA will disburse funds on a reimbursement basis for projects via payments to the grant recipient in tranches as outlined below:
- Disbursement 1: Up to 20% of the grant award will be reimbursed for engineering and design costs incurred during either an 18-month pre-application lookback period and/or after application submission
- Disbursement 2: 25% of the grant award will be reimbursed upon completion of at least one-third of construction for the project, as determined by construction cost and schedule data, including expenses incurred to-date vs. total project cost, and amount of work completed vs. remaining based on construction project schedule
- Disbursement 3: 25% of the grant award will be reimbursed upon completion of at least two-thirds of construction for the project.
- Disbursement 4: 30% of the grant award will be reimbursed after the project has fully completed construction and all permits have been successfully closed and final inspections passed. Disbursement of the final payment may require additional verifications and documentation, including but not limited to lien releases (if applicable), post-construction site visit, and contractor payment sign-offs.
In the event the proposed project costs for Disbursement 1 are below 20% of the total eligible project cost, Disbursements 2 through 4 will be increased proportionally by the NJEDA within the grant agreement for the awarded project.
Disbursement Conditions:
- No disbursements for the grant award will be made until the applicant provides firm proof of funding demonstrating ability to cover the balance of projects costs not covered by the grant award IN ADDITION TO a 10% project contingency to cover any potential project cost overruns.
- Project construction will be monitored by NJEDA via pre- and post-construction site visits. NJEDA may also conduct site visits during construction at its discretion.
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
- Soft costs including construction management, commissioning, engineering, building certification, and design costs relevant to scope categories listed above (no more than 20% of total project costs can be allocated for this purpose)
- Electric vehicle charging infrastructure can optionally be included in project scopes but electric vehicle charging infrastructure projects on their own would not be eligible.
Ineligible Project Costs:
- Permitting and inspection fees
- Taxes
- Property or facility acquisition costs
- Interior finish improvements and upgrades not related to operating energy/emissions reductions (e.g. flooring, artwork)
- Other building system upgrades not related to operating energy/emissions reductions (e.g. fire sprinklers, security cameras), even if required for overall building code compliance
- Furniture: non-permanent items (e.g. desks, chairs, cabinets)
- Prior construction work related to energy efficiency/emissions reductions improvements that began or completed before the time of application to the program
- New construction and gut rehab/redevelopment projects including enlargements or additions to existing buildings that increase overall building square footage
- Demolitions
- Fines incurred because of code or zoning violations during construction project associated with this grant
- Installation of new combustion-based systems (e.g., boilers, furnaces), regardless of efficiency
Additionally:
- Projects involving new construction and substantial rehabilitation/redevelopment are excluded from Program funding. However, if the new construction or substantial rehabilitation/redevelopment project is a portion of a larger retrofit project that includes a connected building(s) otherwise qualified for the Program, then expenses associated with the energy system for the new construction or substantial rehab/redevelopment are eligible. Substantial rehabilitation shall have the same meaning as “reconstruction” in N.J.A.C. 5:23-6.3.
- A lookback period of up to 18 months prior to the date of application submission shall apply to design, engineering, planning, and/or audit activities initiated or completed in furtherance of the project. Such costs may be included in the total eligible project cost. Construction or building maintenance costs incurred prior to application submission are ineligible for the lookback period. Reimbursement for expenses incurred during the lookback period shall not exceed twenty percent (20%) of the total eligible project cost.
- Except for the NJEDA’s NJ Cool program, the grant award is stackable with any 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.
Applications will be reviewed on a rolling basis. Applications will go through the following review process:
Step 1: Application Requirements: Applicant submits application to NJEDA, which shall include, among other items:
- Building address and property information (size, type, occupancy, etc.)
- Proof of building ownership/proof of building owner permission to undertake project
- If Applicant leases space, a copy of their lease extending one year past the construction timeline and a signed acknowledgement 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.
- A description of the proposed project
- Project design drawings
- Photos of the existing building space
- Cost estimate budget spreadsheet using NJEDA template, which is supported by:
- Quote(s) from contractor(s) that are registered with NJDOL as a Public Works Registered Contractor with costs consistent with New Jersey State prevailing wage rates
- Vendor quotes or similar retailer price information for any relevant items/equipment to be purchased directly by the applicant
- A soft commitment for matching funding (e.g., promissory note, letter of commitment from a financial institution, etc.) OR proof of funding in-place (e.g. bank statements, executed financing agreement, or similar indication of availability of working capital for proposed project) to demonstrate Applicant’s ability to cover the balance of project costs not covered by this grant IN ADDITION TO a 10% contingency to cover any potential project cost overruns.
- Estimated project schedule
- Requested grant award amount
- Expected utility/state energy efficiency incentive payments (if applicable)
- Recent utility bill(s) (water and energy), as well as building occupancy and energy consumption (e.g. oil, propane) data for prior 12 months of operation
- Projected operating greenhouse gas emissions savings to be realized as a result of the project (calculated by a 3rd party qualified professional) with supporting information and additional documentation as required (HVAC equipment information, etc.).
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. Staff shall also complete an initial project financial viability review based on the soft commitment for matching funding or proof of funding in-place submitted as part of the application materials to demonstrate the Applicant’s ability to cover balance of project costs not covered by the grant in addition to a 10% project contingency for any potential project cost overruns.
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 and enter into a grant agreement. If not already provided the applicant must provide a current tax clearance certificate at the time of grant agreement. NJEDA grant awards will not be adjusted following notice of application approval and the applicant will be responsible for any additional or unexpected project costs, even if relevant to the eligible project scope.
Step 4 – Proof of Funding: If only a soft commitment for matching funding is provided at time of application, the Applicant will have twelve (12) months from execution of grant agreement with NJEDA to submit proof of funding for the balance of project costs. Proof of funding can include bank account statements, financing agreement, or similar indication of available working capital for the project costs. NJEDA will review and provide approval for proof of funding via its underwriting process. Additional financing provided by NJEDA may also be used to cover project costs not met by the grant award, including through the NJ Clean Energy Loans program and the New Jersey Green Bank, a subsidiary of the NJEDA, which may be able to offer loan financing to complement the grant award. However, the applicant cannot use both NJ Cool program funding and RETROFIT NJ funding for the same project.
Step 5 – Construction Initiation: Project construction activity must commence on-site within twelve (12) months of grant agreement execution, or the applicant must demonstrate that permit applications (if required) are pending with relevant building authorities.
Step 6 – Construction Completion: Applicants will have three (3) years from project construction commencement to achieve project completion. NJEDA may provide an extension for this timeline at its discretion based on extenuating circumstances that disrupt the project construction timeline.
Application fee: non-refundable $1,000 fee for applying to the program.
PROGRAM GUIDE
QUESTIONS
If you want to be included in future outreach or have questions about the RETROFIT Program, contact NJEDA at retrofit@njeda.gov.