PSEG & NYSERDA Heat Pump Rebates on Long Island: Up to $7,500 (2026)

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. The good news is the PSEG Long Island rebate (which is how the NYS Clean Heat money is paid out here) grew for 2026, and between that, Rate Code 580, and EmPower+ for income-qualified homes, 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.

The PSEG Long Island rebate is a flat whole-house amount per single-family home, set by income tier rather than by system size. Market-rate homes get $4,000. Moderate-income households (under 80% of area median income) and market-rate homes located in a NYSERDA-designated Disadvantaged Community get $5,000. Income-qualified households (under 60% of state median income) get $7,500. There is also a $250 incentive paid to the contractor, separate from your rebate.

That flat structure is the part most people get wrong. It is not a per-ton rebate that scales with tonnage, and it is not a PSEG rebate plus a separate NYSERDA Clean Heat rebate stacked on top. On Long Island, PSEG administers the NYS Clean Heat program, so the money comes through as one rebate. This matters most for homeowners converting from oil heat, which is still a big share of the oil-heated homes out here in Suffolk County.

To qualify, your heat pump installation has to be done 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.

Where NYSERDA fits in

Here is the part that confuses a lot of homeowners. People hear "PSEG rebate" and "NYSERDA Clean Heat rebate" and assume they are two separate checks you stack. On Long Island they are not. PSEG Long Island is the utility that administers the NYS Clean Heat program here, so the Clean Heat money is paid out as the single PSEG Long Island rebate described above. If a contractor's proposal shows both a PSEG rebate and a separate Clean Heat rebate added together, the math is double-counting.

The rebate is usually applied at the point of sale by your contractor, meaning it comes off the invoice rather than getting mailed to you later. Your contractor has to be a participating installer to apply it. We're enrolled, so it's handled as part of the proposal.

There is one genuinely separate NYSERDA program worth knowing about: EmPower+. It pays for weatherization and energy-efficiency work (insulation, air sealing, a home energy assessment) for income-qualified households, and it can run alongside the heat pump rebate on the same project. One caveat: if you take IRA HEAR funding through EmPower+, you cannot also take the PSEG rebate, since that is the same Clean Heat money.

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 PSEG rebate more than offsets the loss of the federal credit for most homeowners. A typical installation that would have gotten $2,000 from the feds now gets $4,000 to $7,500 from the PSEG Long Island rebate depending on income tier. 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 doing an oil to electric conversion, the combination of eliminating oil deliveries and getting the Rate 580 discount can change your monthly budget pretty dramatically.

Income-qualified households

If your household income is at or below 60% of the state median income for Suffolk or Nassau County, you land in the top rebate tier: $7,500 instead of the $4,000 market-rate amount. On top of that higher rebate, income-qualified households can usually add NYSERDA EmPower+, which covers weatherization and energy-efficiency work (insulation, air sealing, a free home energy assessment) at little or no cost. The income verification is handled directly through the program. The requirements are strict, but if you think you might be close to the threshold it is worth checking, because the difference between the market-rate and income-qualified tiers is real money.

How it adds up

Here's what the numbers look like for a typical heat pump installation in a Suffolk County home replacing an oil furnace:

PSEG Long Island rebate: $4,000 at market rate, $7,500 if income-qualified. Rate Code 580 annual savings: $400 to $800 every heating season, ongoing. Income-qualified homes can also layer in EmPower+ weatherization. So the up-front rebate is $4,000 to $7,500, and the Rate 580 discount keeps paying year after year on top of it.

On a system that might list at $18,000 to $22,000 installed, that puts your effective cost in the mid-teens at market rate, lower if you qualify for the higher tier. And you're eliminating oil deliveries, which at current prices run $3,000 to $5,000 a year for most homes we see.

One thing that changed for 2026: the federal 25C tax credit expired at the end of 2025, so it is no longer part of the picture. The good news is the PSEG rebate above carries the deal on its own. We broke down exactly how the rebate math works after 25C with real Patchogue proposal numbers.

The key is working with a contractor who is enrolled to file the PSEG Long Island rebate (and EmPower+, if you qualify). If your contractor isn't enrolled, you could be leaving money on the table. Our Long Island heat pump rebates and savings page lays out every program side by side and shows how we file the applications for you.

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. Run the numbers yourself with our rebate calculator, or 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.