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Upgrading Gas-Fired HVAC Equipment in New Jersey


 We previously discussed the incentives available in New Jersey for electrical HVAC
upgrades in commercial and industrial buildings. These are available through the NJ
Clean Energy Program, specifically through a subprogram called Smart Start
Buildings. However, many gas-fired equipment upgrades are also covered
by rebates, where the common denominator is reducing energy costs and carbon
 This article will focus on the benefits available for gas-fired equipment. Combustion
is often used for space heating and domestic hot water, since electric heating is very
expensive unless you use high-efficiency heat pumps.
 Smart Start targets both new constructions and existing buildings, and you can get
the rebates by specifying qualified equipment in either case. Calculation worksheets
are provided for each type of upgrade in the NJCEP website.
Gas Cooling
 Although natural gas is normally used as a heat source, there are two
types of systems that can deliver cooling with a heat input: absorption
chillers and regenerative desiccant units. These are very cost-effective
when you have plenty of waste heat from another process, since you can
reduce the load on electrical cooling systems. Of course, absorption
chillers can also be fired directly with gas.
 The incentive rate for absorption chillers is specified in USD/ton, and it
ranges from $185/ton to $450/ton depending on chiller capacity. Both
direct-fired and indirect-fired chillers are eligible for the incentive, the only
difference is that worksheet measure codes change for each case. In
addition, the following requirements apply:
 The chiller must have a full-load coefficient of performance above 1.1,
calculated according to the AHRI Standard 550/590/2003
 If capacity exceeds 400 tons, only two-stage chillers qualify.
Gas Heating
 The Smart Start Buildings program provides incentives for the following
upgrades targeting gas-fired space heating equipment: high efficiency gas
boilers, high efficiency gas furnaces, low intensity infrared heaters and
economizing controls
 The incentive for high-efficiency gas boilers is calculated in USD per
MBH of capacity, and the rate is determined based on the following
 Boiler capacity: divided into ranges, with a difference incentive rate for
each range. Boilers above 4,000 MBH are not covered and must be
submitted for approval as custom energy efficiency measures.
 Type: non-condensing or condensing.
 Heat transport medium: hot water, natural draft steam, and other steam
 There is a minimum efficiency level, which changes depending on the
combination of the three factors above (capacity, type, heat transport
Gas Heating
 High-efficiency gas furnaces get a single incentive of $400 per unit. It
applies regardless of type as long as the following conditions are met:
 Equipment that is listed as an ENERGY STAR Certified furnace.
 A minimum Annual Fuel Utilization Efficiency (AFUE) of 95%.
 Low intensity infrared heaters get an incentive of $500/unit for capacity
up to 100 MBH, and $300/unit for units exceeding 100 MBH. The benefit
only applies if the heater is used indoors, and only for boilers listed by UL
or another Nationally Recognized Testing Laboratory (NRTL) approved by
 In the case of boiler economizer controls, the incentive is per system
and calculated based on boiler capacity, ranging from $1200 to $2700.
Like in the case of infrared heaters, only controls listed by UL or an OSHA-
approved laboratory are eligible. The benefit applies for both new and
existing boilers, but only if they are not currently equipped with an
economizer control.
Gas Water Heating
 The Smart Start Buildings program provides incentives for both tank-style
and tankless water heaters, but this benefit is exclusive for the
replacement of existing units. The incentive rate is specified in USD/MBH,
and it is determined based on capacity (MBH) and efficiency.
 Storage water heaters get an incentive of $1.75/MBH if they meet the
minimum efficiency requirement, but there is a higher efficiency tier where
the incentive rate increases to $3.50/MBH. The efficiency levels required
for each tier change depending on equipment capacity (MBH)
 Tankless water heaters get an incentive of $300/unit. However, efficiency
requirements change for units below 200 MBH and for larger units.
 Space heating and domestic hot water represent a significant portion of
energy expenses in north eastern states like New Jersey. The carbon
footprint of these building systems is also high, since they typically rely on
oil or gas combustion. The NJ Clean Energy Program provides incentives
for high-efficiency gas equipment, since gas is the less polluting of the two
most common fuels.
 If you are considering an upgrade for gas-fired equipment in a commercial
or industrial building, get in touch with a qualified design firm. This way,
you ensure that Smart Start incentive requirements are met.