Heat Pump Rebates on Long Island: The Complete 2026 Guide
Every heat pump rebate available to Long Island homeowners in 2026, from PSEG to NYSERDA. Real numbers, stacking strategies, and what changed this year.
The rebate landscape changed this year, and most people don't know it
If you've been thinking about switching to a heat pump, 2026 is still a strong year to do it on Long Island, but the incentive picture looks different than it did last year. The federal 25C tax credit that gave homeowners up to $2,000 back on heat pump installations expired at the end of 2025. That's gone. But PSEG Long Island and NYSERDA both expanded their programs for 2026, and when you stack everything together, a heat pump installation can still cost thousands less than the sticker price.
Here's every rebate and incentive available to Suffolk County homeowners right now, with real numbers and no fine print buried at the bottom.
PSEG Long Island heat pump rebates
This is the big one. PSEG Long Island rolled out updated rebate tiers effective January 1, 2026, and the numbers are the most aggressive we've seen.
For a typical Suffolk County home, the rebates range from about $4,000 for a smaller 1-ton system up to $10,500 for a 5-ton whole-home system in new construction. Most existing homes we work on fall somewhere in the $5,000 to $8,000 range depending on tonnage and whether you're replacing an oil system, gas system, or adding to an existing setup.
The rebate amount depends on a few things: the size of the system (measured in tons or BTU capacity), whether it's a new build or existing home, and what fuel source you're replacing. Homes converting from oil heat generally qualify for the higher end of the rebate scale, which makes sense considering how many oil-heated homes are still out here in Suffolk County.
To qualify, your system has to be installed by a participating contractor and meet PSEG's efficiency requirements. The purchase and installation both need to happen in 2026, and your rebate application has to be postmarked by December 31, 2026.
NYSERDA Clean Heat rebates
On top of the PSEG rebate, you can layer in a NYSERDA Clean Heat rebate. For 2026, these run $1,000 to $3,000 for whole-home air source heat pumps, depending on the equipment and your utility territory.
One thing that changed this year: NYSERDA's residential clean heat rebates are now limited to homes with one to four units. If you're in a single-family home in Patchogue, Medford, or Sayville, you're fine. But larger multi-family buildings have different rules now.
The NYSERDA rebate is applied at the point of sale by your contractor, meaning it's taken off the invoice rather than mailed to you later. Your contractor has to be a NYSERDA-participating installer to offer this. We're enrolled in the program, so this gets handled as part of the proposal.
Heat pump water heaters also qualify for a separate NYSERDA rebate in the $700 to $1,000 range, if you're replacing an electric or oil-fired water heater at the same time.
What happened to the federal tax credit
This is the question we're getting the most. The Section 25C Energy Efficient Home Improvement Credit, which offered up to $2,000 for qualifying heat pump installations, expired on December 31, 2025. If you installed a system last year, you can still claim it on your 2025 tax return. But for anything installed in 2026, that credit is no longer available.
The good news is that the expanded PSEG rebates more than offset the loss of the federal credit for most homeowners. A typical installation that would have gotten $2,000 from the feds is now getting $5,000 to $8,000 from PSEG alone. The math still works, and for a lot of people it works better than it did last year.
One exception: if you're looking at a ground-source (geothermal) heat pump, check with your tax advisor. The Section 25D residential clean energy credit may still apply to geothermal installations under different rules.
Rate Code 580: the rebate that keeps paying
This one flies under the radar but it's worth real money over time. When you install a heat pump as your primary heating source, you can enroll in PSEG Long Island's Rate Code 580 residential electric heating rate.
From October through May, Rate 580 gives you a 40% discount on energy delivery charges for all usage above 400 kWh per month. During the heating season, when your heat pump is running the most, that discount adds up fast. We've seen homeowners save $400 to $800 over a single heating season just from Rate 580 alone.
If you're switching from oil heat to a heat pump, the combination of eliminating oil deliveries and getting the Rate 580 discount can change your monthly budget pretty dramatically.
Income-qualified programs: Home Comfort Plus
If your household income is at or below 60% of the state median income for Suffolk or Nassau County, you may qualify for PSEG's Home Comfort Plus program. This program can cover the full installation cost with little to no out-of-pocket expense.
That's not a typo. For qualifying households, this program can mean a free or near-free heat pump installation. It's income-based, and the requirements are strict, but it's worth checking if you think you might be close. PSEG handles the income verification directly.
How to stack everything together
Here's what a realistic rebate stack looks like for a typical 3-ton heat pump installation in a Suffolk County home replacing an oil furnace:
PSEG Long Island rebate: $6,000 to $7,500. NYSERDA Clean Heat rebate: $1,000 to $2,000. Rate Code 580 annual savings: $400 to $800 per heating season. That's $7,000 to $9,500 in first-year value before you factor in the ongoing delivery charge savings.
On a system that might list at $18,000 to $22,000 installed, you're looking at an effective cost in the low teens or even under $10,000 after incentives. And you're eliminating oil deliveries, which at current prices run $3,000 to $5,000 a year for most homes we see.
The key is working with a contractor who handles both the PSEG and NYSERDA paperwork. If your contractor isn't enrolled in both programs, you could be leaving money on the table.
What to do next
Rebate programs have budgets, and PSEG's program runs on a first-come, first-served basis. We've seen years where the most popular rebate tiers get claimed faster than expected, especially heading into summer when everyone starts thinking about their heating and cooling setup.
If you're thinking about a heat pump for your Long Island home, spring is the time to start the conversation. Give us a call or text at 631-209-7090 and we can walk you through what you'd qualify for based on your specific situation. No pressure, just the numbers.