Long Island homeowners have access to one of the best HVAC incentive stacks in the country right now, but the programs are confusing — different agencies, different qualifying equipment, different paperwork. Here's how the two big ones actually work, and how to combine them with the federal tax credit.
PSEG Long Island — Home Comfort program
PSEG Long Island offers rebates to residential customers who upgrade to qualifying high-efficiency heat pumps, ductless systems, and (in some program years) central AC. The rebate amount depends on the equipment type, efficiency rating, and capacity. PSEG updates the program annually, so amounts and qualifying models change.
How the money reaches you
In most cases, PSEG rebates are handled by your contractor: they submit the paperwork, and the rebate is either paid directly to you after installation, or applied as a credit on your invoice. The cleanest installs use a PSEG-registered contractor — that's the only way to access the highest incentive tiers.
NYSERDA Clean Heat
NYSERDA's Clean Heat program is the statewide push to electrify home heating. The incentive is calculated per ton of heating capacity for qualifying air-source and ground-source heat pumps. Unlike a mail-in rebate, NYSERDA Clean Heat is paid directly to your participating contractor and shows up as a discount on your quote.
Who qualifies
- Residential property in New York State (Long Island qualifies).
- Qualifying ENERGY STAR cold-climate heat pump.
- Installed by a NYSERDA Clean Heat participating contractor.
- Proper Manual J load calculation and AHRI-matched equipment.
Federal tax credit (IRA 25C)
On top of the utility and state rebates, the federal 25C Energy Efficient Home Improvement Credit gives you up to $2,000 back on your taxes for a qualifying heat pump. This is a non-refundable tax credit, so you need enough federal tax liability to use it in the year of installation. Your installer can confirm whether the model qualifies; you (or your accountant) claim it on IRS Form 5695.
Can you stack them?
Yes — PSEG Long Island, NYSERDA Clean Heat, and the federal tax credit are designed to stack on a single qualifying heat pump install. The PSEG rebate and NYSERDA discount reduce your installed cost, and then the federal credit reduces your tax bill. The combined effect on a typical whole-home heat pump install on Long Island is often several thousand dollars off the sticker price.
What to ask any contractor
- Are you a PSEG Long Island registered contractor?
- Are you a NYSERDA Clean Heat participating contractor?
- Will the rebate amounts appear as line items on my written quote?
- Does the equipment you're proposing qualify for the IRA 25C federal tax credit?
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