PSEG Long Island Heat Pump Rebates in 2026: What You Actually Qualify For

If you're replacing a heating system on Long Island this year, PSEG Long Island will pay between $4,000 and $7,500 toward a cold climate heat pump. That's real money, it's available now, and most homeowners we talk to either don't know it exists or assume they've missed it.

There's also something you need to know that a lot of contractor websites haven't caught up on: the federal tax credit for heat pumps expired on December 31, 2025. If a quote you're holding includes a 30% federal credit or a $2,000 write-off, that quote is out of date.

Here's exactly what's available in 2026, what disqualifies a job, and how to claim it.

What PSEG Long Island pays in 2026

PSEG Long Island administers heat pump rebates for the whole island through the New York State Clean Heat program. This is the program most people are searching for when they type "NYSERDA rebate" — on Long Island, NYSERDA doesn't pay it directly. PSEG Long Island does.

For a whole-house cold climate air source heat pump or air-to-water heat pump in a single-family home:

Three things worth flagging about this table.

"Whole-house" is not a suggestion. These are whole-home rebates. A single-zone ductless unit in a converted garage does not qualify at these amounts.

Disadvantaged Community status is worth $1,000 even at market rate. New York State designates certain census tracts as Disadvantaged Communities, and parts of Suffolk County fall inside them. Most homeowners have no idea whether their address qualifies. It's worth asking before you assume you're at the $4,000 tier — PSEG Long Island can confirm your address.

Income-qualified isn't as narrow as people think. The moderate-income tier runs to 80% of area median income, which on Long Island is a higher number than most families expect. If you haven't checked, check.

The four rules that disqualify most jobs

This is where rebates get lost. Every one of these is a hard requirement, and a contractor who doesn't know them will cost you the money.

1. The equipment has to be on the NEEP cold climate list

Your heat pump must appear on the Northeast Energy Efficiency Partnerships (NEEP) Cold Climate Air Source Heat Pump Specification Product Listing. Not "a good heat pump." Not "an efficient one." On the list.

Units that include a furnace component are excluded. Air-to-water heat pumps have their own list — the New York State AWHP Qualified Product List.

This single rule disqualifies a lot of equipment that a homeowner would reasonably assume counts. If your contractor can't tell you the exact model number and confirm it's listed, that's a problem.

2. The system has to cover 100–120% of your entire heating load

PSEG Long Island requires the heat pump to meet 100–120% of the whole dwelling's heating load — and it requires a Manual J load calculation to prove it.

Manual J is a room-by-room engineering calculation of how much heat your specific house loses. It accounts for insulation, window area and orientation, air sealing, ceiling heights, and local design temperature.

It is not a rule of thumb. If someone sizes your system off square footage or off the tonnage of your old unit, two things happen: you don't get the rebate, and you get a system that's wrong for the house.

We run Manual J on every heat pump we quote. It takes longer than guessing. That's the point.

3. You need dual-fuel controls, or the old system comes out

PSEG Long Island requires either integrated dual-fuel controls — a thermostat that intelligently switches between the heat pump and the backup system based on outdoor temperature — or the removal of the existing fossil fuel heating system.

You can't leave an oil boiler sitting there on its own thermostat as a backup and still collect the whole-home rebate. It's one or the other.

For most Long Island homes converting off oil, dual fuel is the more sensible route in year one. You keep the boiler as backup for the coldest nights, the controls manage the handoff automatically, and you still qualify.

4. It has to be installed by a participating contractor

The rebate is filed by the contractor, not by you. If your installer isn't on PSEG Long Island's participating contractor list, the rebate does not exist for that job — regardless of what equipment goes in.

Ask before you sign. It's a one-sentence question and it's worth $4,000 to $7,500.

The federal tax credit is gone. Here's what that means for your quote.

Under the One Big Beautiful Bill Act, two federal residential energy credits were terminated early:

       • Section 25C, the Energy Efficient Home Improvement Credit — the 30% / up-to-$2,000 heat pump credit — terminated for property placed in service after December 31, 2025.
•Section 25D, the Residential Clean Energy Credit, which covered geothermal — terminated for expenditures made after December 31, 2025.

Both were originally scheduled to run to 2032 and 2034 respectively under the Inflation Reduction Act. They were cut short.

Practically, for a 2026 installation: there is no federal tax credit on a residential heat pump or a residential geothermal system. If you had a system placed in service on or before December 31, 2025, you can still claim 25C on your return using IRS Form 5695 — but a system going in this year doesn't qualify.

This matters when you're comparing quotes. A proposal built around "$4,000 PSEG plus $2,000 federal" is short by $2,000, and it's short because the contractor hasn't updated their numbers. We'd rather tell you the real figure now than have you find out at tax time.

The state money is unaffected. PSEG Long Island's rebates are funded through New York State, not the federal government, and they're still there.

If money is tight, look at EmPower+ before anything else

NYSERDA's EmPower+ program is separate from the PSEG rebate, and for income-eligible households it's considerably larger.

It covers owners and renters of one- to four-family homes, on their primary residence, and starts with a no-cost comprehensive home energy assessment.

For downstate households — which includes Long Island:

•              Low income: no-cost energy efficiency improvements, capped at $14,000 per  project

•              Moderate income: 50% of the cost of improvements, capped at $7,000 per project

EmPower+ now serves income-eligible Long Island customers who would previously have qualified through the KEDLI Heat program, which ended.

If you think you might be income-eligible, start with the EmPower+ assessment rather than calling for a heat pump quote. The assessment is free, it tells you what the house actually needs, and insulation and air sealing done first will make the heat pump smaller and cheaper.

How to claim it, start to finish

Step 1 — Check whether you're income-eligible. Under 80% of area median income opens a bigger rebate and possibly EmPower+. Ten minutes of checking can be worth thousands.

Step 2 — Get a Manual J load calculation. Not an estimate. Not a square-footage rule. The actual calculation, on your actual house. This determines both the system size and your eligibility.

Step 3 — Confirm the equipment is on the NEEP list. Get the model number in writing and confirm it appears on the cold climate listing.

Step 4 — Decide dual fuel or full changeout. Keeping the boiler with integrated controls, or removing it. Both qualify. Which one is right depends on your house, your budget and how you feel about oil.

Step 5 — Confirm your contractor is a PSEG Long Island participating contractor. They file the paperwork. If they're not enrolled, there's no rebate.

Step 6 — Install, and let the contractor file. The rebate is processed through the contractor and the New York State Clean Heat Calculator.

Is a heat pump actually right for a Long Island house?

Rebates are a reason to look. They aren't a reason to buy.

Cold climate heat pumps work in our climate — that's what the NEEP listing certifies, and the equipment on that list is designed to hold capacity well below freezing. Long Island winters are not the problem for this technology that they were fifteen years ago.

Where it gets more nuanced is the house itself. A drafty, under-insulated house with an oversized old boiler is a bad candidate until the envelope is addressed. A house with existing ductwork in reasonable condition is an easier and cheaper conversion than one that needs a full ductless install in every room.

And the operating cost comparison against oil depends on your rate, your usage and how well the system is sized. That last one is why Manual J keeps coming up.

If you want an honest read on whether it makes sense for your house — including if the answer is "not yet" — that's the conversation we'd rather have.

Talk to us before you sign anything

We'll run the Manual J, confirm the equipment against the NEEP listing, tell you which rebate tier you're actually in, and give you a number that reflects 2026 rules rather than last year's.

If the answer is that a heat pump isn't right for your house yet, we'll tell you that too.

Call (631) 414-7141 or request service online.