New Jersey's storage incentive program: status and how it works

New Jersey's storage incentive program has a name problem and a status problem, and the two get tangled together in almost everything written about it.

The name problem is simple: the New Jersey Storage Incentive Program, NJ SIP, was renamed. The NJBPU's own announcement describes the Garden State Energy Storage Program as an effort "formerly known as the New Jersey Storage Incentive Program (NJ SIP)." Same program, current name GSESP.

The status problem is the one that matters. New Jersey has an active, well-funded, publicly announced storage incentive program, and a homeowner cannot apply to any part of it today. Every claim on this page is sourced from the Board's own filings and pages, read August 6, 2026. Program status is the load-bearing fact here and it moves; verify on your own date before it affects a purchase.

What the program is

The Board launched GSESP on June 18, 2025, describing it as "a multi-phase program designed to deploy 2,000 megawatts (MW) of energy storage by 2030, a mandate established by the Clean Energy Act of 2018." (Source: NJBPU, N.J. Takes Charge: Launches Landmark Energy Storage Program, dated June 18, 2025, read August 6, 2026.)

The split between phases is the whole story:

• Phase 1, Transmission-Scale Energy Storage, which the Board describes as strategically procuring "at least 1,000 MW of larger projects directly connected to the main power grid through competitive bidding." Utility-scale. Not a homeowner program.
• Phase 2, Distributed Energy Storage, which the same release says "is expected to launch in 2026" and will "focus on incentives for smaller energy storage systems connected to local distribution grids, including both 'in front of the meter' (grid-connected) and 'behind the meter' (residential or commercial) systems." It adds: "These incentives will be both fixed and performance based."

The residential battery money is entirely in Phase 2. Everything that has actually happened so far is Phase 1.

Where Phase 1 stands

On March 4, 2026, the Board awarded the first tranche. Its announcement the next day states it approved "incentives for three large battery storage projects under the first solicitation of the Garden State Energy Storage Program (GSESP), totaling 355 megawatts (MW) of capacity, slightly above the 350 MW minimum required by state law." The winners named are Woods Landing Storage LLC at 200 MW in Sayreville, Two Rivers Energy Storage LLC at 150 MW in Ridgefield, and North America Energy Storage Corp. at 5 MW in Bordentown.

The same action launched the second solicitation: "The Board also launched Phase 1, Tranche 2 of the GSESP, opening a second competitive solicitation for 645 MW of additional storage capacity. Once Tranche 2 is complete, New Jersey will reach the full 1,000 MW transmission-scale storage target required by law." Tranche 2 is described as open to stand-alone storage and to solar-plus-storage projects that do not qualify under the Board's Successor Solar Incentive program. (Source: NJBPU, NJBPU Takes Major Action to Advance Governor Sherrill's Goals for Affordable, Clean Energy, dated March 5, 2026, read August 6, 2026.)

Current status of that solicitation, per the state's clean energy program site: Phase 1 Tranche 1 is closed, and "Phase 1, Tranche 2 is open as of May 20, 2026." (Source: New Jersey's Clean Energy Program, Energy Storage, read August 6, 2026.) The Board has since extended the deadline: a public notice states that "the Final Application deadline for Tranche 2 of Phase 1 of the Garden State Energy Storage Program ('GSESP') has been extended to 11:59 p.m. ET on October 5, 2026," dated July 30, 2026. (Source: NJBPU public notice, GSESP Tranche 2 Extension, read August 6, 2026.)

None of that is available to a house. The Board's own program FAQ answers the behind-the-meter question directly: "No, a behind-the-meter project would not be eligible for Tranche 1, which is specifically intended for front-of-the-meter systems." (Source: New Jersey's Clean Energy Program, Garden State Energy Storage Program FAQs, read August 6, 2026.)

How Phase 2 is structured, as published

This is where a residential incentive would live, and the Board has published a structure without publishing numbers.

Two components. The Board's April 2026 notice describes Phase 2 as "designed to consist of two incentive components: a fixed incentive provided via capacity blocks released on a periodic basis, and a performance incentive paid to projects in proportion to the value they provide," with that value described as the value of reducing on-site load or injecting power into the distribution system during designated performance hours, over a period of 10 years. (Source: NJBPU, Request for Information on advancing a VPP program and GSESP Phase 2 Distributed Storage, Docket Nos. QO26030099 and others, read August 6, 2026.)

Capacity blocks, not an open budget. The program FAQ adds how the fixed side would be rationed: "Staff also anticipates that the Board will set the size of fixed incentives and the amount of project capacity to award on an annual basis, offering fixed incentive through administratively determined capacity blocks." If you have followed New York's or Connecticut's storage programs, this is the familiar block structure: a block opens at a rate, fills, and the next block opens at a lower rate.

Where a house falls in the size classes. The FAQ states that the small, medium and large definitions "refer to distributed energy storage systems and are only relevant to the Distributed Phase 2 program segment," with "large" meaning greater than 500 kW, "medium" meaning 100 kW to 500 kW, and "small" meaning less than 100 kW. A residential battery is comfortably in the small class.

No published rate, and the Board says so. The same FAQ: "The final design for Phase 2, which will launch the distributed storage segment of the GSESP, has yet to be determined." It attributes the two-component design to a Staff straw proposal dated November 7, 2024 and adds: "That is the latest public information and is subject to change." Elsewhere it states that "Phase 2 of the GSESP is subject to revision in a future Board order."

We are not going to print a dollar figure for a New Jersey residential battery incentive, because the Board has not published one. Third-party pages that do are quoting a 2024 straw proposal as if it were a program.

Why Phase 2 has not opened yet

The Board has been explicit about both the pressure to move and the fact that it has not moved.

Governor Mikie Sherrill issued Executive Order 2 on January 20, 2026, which the Board's notice describes as "declaring a statewide energy emergency and affirming the urgent need to strengthen grid reliability and resiliency in light of rapidly rising electricity demand and mounting affordability challenges in New Jersey." The same notice states that EO2 "directs the Board to launch 'Phase 2 of [the GSESP]' within 90 days of EO2," accelerating distribution-scale storage incentives.

Ninety days from January 20, 2026 falls in late April 2026. In April, rather than opening Phase 2, the Board issued a Request for Information seeking further input on Phase 2 design alongside a virtual power plant program, with responses due at 5 p.m. on May 20, 2026. Its stated reason for coupling them is that the two programs should be coordinated, since distributed battery storage systems are foundational assets for future VPPs.

The most recent official language we found is from a June 30, 2026 board order on clean energy program budgets for fiscal year 2027: "Phase 2 of the GSESP will focus on incenting distributed storage. In response to Governor Sherrill's EO2, Staff anticipate moving quickly to launch Phase 2 which will be key to building out a strong distributed storage program. The Board intends to provide compensation to storage owners predominantly for the value storage provides to the grid, potentially through a VPP construct or other market or rate design mechanisms. GSESP Phase 2 is planned to be funded through sources other than the FY27 NJCEP budget." (Source: NJBPU Board Order, NJCEP Compliance Filings and Budgets FY27, dated June 30, 2026, read August 6, 2026.)

Two things in that paragraph are worth a homeowner's attention. "Anticipate moving quickly" is not a date. And the funding sentence is a live design question: Phase 1 was funded primarily through the New Jersey Clean Energy Program budget, and the Board is stating that Phase 2 will not be.

What this means if you are buying a battery in New Jersey now

There is no state incentive to wait for a form on. Not a rebate, not a per-kWh payment, not an application portal. If an installer tells you the state program will cover part of your cost, ask them to name the docket and the open application window. There is not one for residential today.

There is no federal purchase credit either. The homeowner credit under Section 25D ended December 31, 2025, so a 2026 cash purchase earns nothing federal. The 30 percent survives only via Section 48E through a lease or power purchase agreement, claimed by the third-party owner. Full picture in our tax credit guide.

Waiting has a real cost and a real argument. The argument for waiting is that a block-structured program usually pays its highest rate in the first block, and equipment purchased before a program opens is frequently ineligible. The Board's FAQ shows that concern is not hypothetical: on a related question about microgrid storage, Staff wrote that only new storage additions would be eligible while "any storage added to the microgrid system prior to the opening of Phase 2 would be ineligible for incentives." That is one answer about one project type, not a blanket rule, but it is exactly the risk to raise with the Board or your installer before you buy.

The argument against waiting is that nothing has a date. Phase 2 has slipped past the timeline an executive order set for it, its funding source is unresolved, and its rate is undetermined. If your reason for a battery is outage backup, that reason does not improve by waiting.

Our New Jersey report carries whatever program data our incentive dataset holds, and the state-by-state incentive guide puts New Jersey next to states with programs that are actually open. If the honest answer for your household is that the numbers do not work without an incentive that does not exist yet, our guide on when a home battery is not worth it is the more useful read.