Garden State Energy Storage Program (GSEP)

Phase 1, Tranche 2

• The Garden State Energy Storage Program is a New Jersey state initiative created under the Clean Energy Act of 2018, which requires New Jersey to deploy 2,000 MW of energy storage by 2030.

• Phase 1 focuses on large-scale, transmission-connected battery storage projects and uses a competitive bidding process.

• Tranche 1 wrapped up in early 2026 with awards to three projects totaling 355 MW.

• Tranche 2 was launched on March 4, 2026, to procure the remaining 645 MW needed to hit the 1,000 MW Phase 1 target.

• It was also directly triggered by Governor Sherrill's Executive Order No. 2, which declared a utility affordability emergency and directed the BPU to open Tranche 2 within 45 days of January 20, 2026. 

• The program is funded through the BPU's existing Clean Energy Program budget and Orsted Settlement funds - no new charges will be added to ratepayer electric bills.

• In fact, BPU analysis found that in most scenarios the capacity savings generated by Tranche 2 projects will exceed the cost of the incentives, making the program a net financial benefit to ratepayers. 

Who Can Apply?

• Private and government entities only - electric distribution companies are not eligible 

• Project must be at least 5 MW_AC of installed capacity 

• The project must be physically in New Jersey and connected to the PJM transmission network 

• Standalone storage projects and storage paired with solar or other Class I renewable energy resources are eligible 

• Storage paired with solar cannot be received or plan to receive incentives from the Successor Solar Incentive (SuSI) Program for the same storage capacity 

• All commercially available battery technologies are eligible 

• Equipment must be new as projects that have already started construction are not eligible 

Incentive Structure

• Winners receive a fixed annual incentive payment per MW of effective nameplate capacity, paid out over 15 years

• Bids are submitted in $ per MW of effective nameplate capacity and projects are ranked in ascending order of their relative costs

• Annual payments are tied to dispatch availability - projects must be available for dispatch at least 7,900 hours per year to receive their full payment and are also adjusted downward if the project loses storage capacity due to battery degradation over time

Application Process

• There are two stages to the application process:  

  • Stage 1 - Pre-Qualification  

    • Submit a Pre-Qualification Request showing the project meets basic eligibility and maturity requirements 

    • BPU Staff reviews the submission and notifies applicants of any deficiencies 

    • Applicants are given the opportunity to correct deficiencies before the final deadline 

  • Stage 2 - Final Application and Bid  

    • Submit a complete Final Application along with your incentive bid price 

    • Must be submitted by August 7, 2026

Documents Required

• Proof of site control (lease agreement or property title) 

• Detailed permitting plan, including an execution plan for any permits not yet secured at the time of submission

• Financial documentation showing the ability to fund construction 

• Evidence of PJM interconnection progress along with path towards interconnection prior to the cliff date

• Safety and code compliance assurances, including NFPA 855 compliance and UL 9540 certification 

• Year-by-year DC and AC degradation projection for the project's operational lifespan 

• Non-refundable application fee of $200 per MW of nameplate capacity 

Application Process

• Additional considerations:  

  • Projects on brownfield sites or serving overburdened communities should include relevant supporting documentation, as these factors can positively influence the Board's award decisions 

• Resources:  

  • All forms and instructions are posted at cleanenergy.nj.gov/programs/energy-storage/garden-state-energy-storage-program-phase-1-tranche-2 

  • Questions can be submitted to energy.storage@bpu.nj.gov 

  • Answers are posted publicly on a rolling basis for all applicants and the public to view 

Dates to Remember

• Applicants can submit materials up until August 7, but only those who pre-qualify by June 10 are guaranteed a deficiency review and chance to correct issues before the final deadline.

• After August 7, no changes are accepted. All bids remain valid for nine months from that date.

What's Next?

After an Award 

• Winners have 30 days from receiving their award letter to:  

  • Register with the BPU 

  • Submit a milestone report with estimated dates for:  

    • Financial closing 

    • Start of construction 

    • Planned Commercial Operation Date (COD) 

    • Guaranteed Commercial Operation Date (COD) 

• Construction cannot begin until the BPU issues a conditional approval following a complete registration review  

Delay Penalties:  

• Projects that miss their planned COD are penalized $1,000 per MW per day of delay 

• The Division Director can grant extensions of up to 180 days for good-faith delays 

• Extensions beyond 180 days are only granted in the case of a documented force majeure event 

Risk of Losing the Award:  

• Projects that miss their guaranteed COD by 36 months risk having their incentive award revoked entirely 

• The Board may waive this penalty if the applicant demonstrates good cause in writing