The Complete 2026 Heat Pump Rebate Stack for Long Island Homeowners
If you've been thinking about replacing an oil boiler, gas furnace, or aging central AC with a heat pump, 2026 is the right year to pull the trigger. Long Island homeowners can currently stack four separate incentive programs on a single install, often bringing the out-of-pocket cost down by $5,000 to $10,000 or more. This guide walks through every dollar available, who qualifies, and how to combine them.
All Island Comfort is a participating heat pump installer in the NYS Clean Heat program, which means we pre-file the utility rebate and apply it directly to your install invoice, so you never have to front the rebate money or chase a check after the job. We service all of Suffolk and Nassau counties from our base in Wading River.
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Call 631-591-2289The Four Rebate Programs at a Glance
- NYS Clean Heat (utility-administered): The biggest single rebate. Paid through PSEG Long Island for electric customers and National Grid for gas customers. Typical range $1,000 to $10,000 depending on system size and whether you go whole-home or partial.
- Federal Section 25C Tax Credit: 30% of qualifying cost up to $2,000 per year for heat pumps, available every tax year through 2032. Filed on IRS Form 5695 with your federal return.
- Low-to-Moderate Income (LMI) Enhanced Rebates: Households at or below 80% of Long Island area median income can qualify for significantly higher NYS Clean Heat rebates, sometimes covering 50% or more of total project cost.
- Manufacturer Seasonal Rebates: Mitsubishi, Carrier, Bosch, Daikin, and other major brands run seasonal promotions ranging from $300 to $1,500 in instant rebates or extended warranties. We track active offers and pair them with the install.
NYS Clean Heat: The Foundation of Your Rebate Stack
NYS Clean Heat is the New York State program that pays utility customers to switch from fossil-fuel heating to electric heat pumps. On Long Island it is administered by PSEG Long Island for electric service and National Grid for gas service, but the rebate dollars come from the same NYSERDA-funded pool. The 2026 program cycle continues to prioritize cold-climate air-source heat pumps (ccASHP) and ground-source heat pumps (geothermal), with higher per-ton rebates for whole-home conversions than for partial or supplemental installs.
Whole-Home vs. Partial Heat Pump Rebates
The single biggest factor in how much rebate you receive is whether the heat pump is sized to handle 100% of your heating load (whole-home) or supplements an existing oil or gas system (partial). Whole-home installs that fully replace the fossil-fuel equipment earn the top rebate tier. Partial installs that leave the existing furnace or boiler in place as backup earn a reduced rebate, typically about half of the whole-home figure.
For most homes in Wading River, Riverhead, Mount Sinai, and Rocky Point, a properly sized cold-climate ccASHP (Mitsubishi Hyper-Heat, Carrier Infinity, Bosch IDS, etc.) can handle Long Island winter design temperatures of about 11°F without electric resistance backup. We confirm this with a Manual J load calculation before signing off on the rebate paperwork.
Ducted vs. Ductless Mini-Split
Both ducted central heat pumps and ductless mini-split systems are eligible. Older Long Island homes without forced-air ductwork (steam radiators, hot-water baseboards) are often better candidates for ductless mini-splits, where each room or zone has its own indoor head. Newer center-hall colonials and split-levels with existing ductwork can use a ducted heat pump and reuse the supply registers and return grilles.
Cold-Climate Tier (HSPF2 Performance)
NYS Clean Heat reserves the top rebate tier for equipment that maintains heating capacity at low outdoor temperatures. The technical name for this is the cold-climate ccASHP designation, and most major brands now offer Hyper-Heat, Heat-Plus, or Cold-Climate model lines that qualify. Standard heat pumps that lose substantial capacity below freezing earn the lower rebate tier.
"All Island Comfort handled the entire NYS Clean Heat paperwork and applied the rebate as a credit on the install invoice. The federal tax credit was a separate $2,000 on our return. Net cost was about $7,800 less than the sticker price for a 4-zone Mitsubishi system."
Federal Section 25C: The 30% Tax Credit Up to $2,000 Per Year
The federal Inflation Reduction Act expanded and extended the Section 25C Energy Efficient Home Improvement Credit, which is now in effect through 2032. For heat pumps specifically, you can claim 30% of the total qualifying cost (equipment plus labor plus electrical work) up to a $2,000 cap per tax year. The cap resets every January 1, so a multi-year project (heat pump in 2026, heat pump water heater in 2027, for example) can claim the credit twice.
What Qualifies for Section 25C
The heat pump must meet the highest tier set by the Consortium for Energy Efficiency (CEE) for your region. Long Island falls in the North region, which requires a higher HSPF2 rating than warmer parts of the country. We only quote equipment that meets or exceeds the qualifying threshold, and we provide the AHRI certificate and manufacturer documentation you need to claim the credit.
How to Claim It on Your Tax Return
Save the install invoice and the AHRI certificate. When you file your federal return, complete IRS Form 5695 (Residential Energy Credits) and enter the qualifying expenses. The credit is non-refundable, meaning it reduces your tax liability but does not generate a refund larger than your tax owed. For most Long Island households this is not an issue, since the average homeowner has well over $2,000 in federal tax liability per year.
PSEG Long Island Rebates and Programs
PSEG Long Island is the electric utility for nearly all of Long Island, and they administer the NYS Clean Heat rebates for electric customers in their service territory. PSEG Long Island also runs several adjacent programs that pair well with a heat pump install:
- Smart Thermostat Rebates: Bring-your-own-thermostat enrollment programs that pay an annual incentive for letting PSEG dial back HVAC during peak demand events. Most ecobee and Nest models qualify.
- Heat Pump Water Heater Rebates: Separate rebate (typically $700 to $1,000) for heat pump water heaters. Stacks with the federal Section 25C credit (which has a separate $2,000 cap that includes water heaters when you install both in the same year).
- Energy Audit Rebate: Subsidized BPI-certified energy audits that identify air-sealing and insulation work that maximizes heat pump efficiency. Worth doing before the install if your home was built before 2000.
- Time-of-Use Electric Rate: Optional residential rate plan that lowers the per-kWh price during overnight and shoulder hours. Heat pumps shift load toward off-peak heating cycles, so most Long Island heat pump owners save additional money on TOU vs. flat rate.
National Grid Rebates (Gas Service Territory)
If your home currently has natural gas heat (gas boiler or gas furnace), National Grid administers the NYS Clean Heat rebate for you instead of PSEG, even though the heat pump itself runs on electricity from PSEG. The rebate amounts and tiers are similar, but the paperwork goes through National Grid's contractor portal. We're enrolled with both utilities, so the experience on your end is the same regardless of which one runs the rebate in your zip code.
If you're in the broader decision of whether to convert from oil to gas or skip gas entirely and go straight to a heat pump, we'll show you both rebate stacks side-by-side at the estimate. In the current 2026 program cycle, the heat-pump path frequently nets more rebate dollars and avoids the cost of a new gas line entirely.
Manufacturer Seasonal Rebates
On top of the government and utility rebates, every major heat pump manufacturer runs seasonal instant rebates and extended-warranty promotions. These come and go, but as of spring 2026 the typical promotions look like this:
- Mitsubishi Electric: $300 to $1,000 instant rebate on multi-zone Hyper-Heat systems, plus 12-year compressor warranty.
- Carrier / Bryant: Up to $1,650 in factory rebates on Infinity heat pump bundles with matching air handler.
- Bosch IDS: Spring promotional rebate plus 10-year parts and labor warranty.
- Daikin Fit: 12-year limited warranty and seasonal rebate on inverter-driven systems.
- Trane / American Standard: Comfort Specialist promotional rebates through dealer network.
- LG Multi V S: Variable-zone systems with promotional pricing for whole-home conversions.
We track which promotions are active each quarter and bake them into the quote. Promotions often time well with NYS Clean Heat seasonal pushes, so spring and fall are usually the highest-value windows to install.
Low-to-Moderate Income (LMI) Enhanced Rebates
If your household income is at or below 80% of Long Island area median income (AMI), you may qualify for substantially higher NYS Clean Heat rebates under the LMI tier. For a 4-person household in Suffolk or Nassau, the 80% AMI threshold falls in roughly the $90,000 to $110,000 range depending on the county-specific HUD figure for the program year. The exact number is updated annually.
LMI rebates can cover a much larger share of project cost, sometimes pushing total incentive coverage to 50% or more of the install when stacked with the federal credit. There's also a separate income-eligible track called EmPower+ for very low-income households (below 60% AMI in most cases) that can cover heat pumps at little to no out-of-pocket cost. We pre-screen for both tiers at the estimate and route the paperwork wherever you qualify highest.
How to Stack the Rebates: The Order of Operations
- 1Free in-home estimate. We measure, run a Manual J load calc, walk the electrical panel, and identify the equipment that maximizes both comfort and rebate eligibility. Typical visit: 45 to 75 minutes.
- 2Side-by-side rebate quote. We hand you a quote that lists the sticker price, the NYS Clean Heat rebate (pre-applied), the federal credit you'll claim on your taxes, any LMI enhancement, and any active manufacturer rebate. You see the net out-of-pocket up front, in writing.
- 3NYS Clean Heat pre-filing. Once the contract is signed, we file the rebate with PSEG or National Grid before the install starts. This locks in the rebate at the current rate even if the program updates.
- 4Install and commissioning. Our crew installs the equipment, handles any electrical-panel upgrades or new dedicated circuits, sets up the line set and refrigerant charge, and commissions the system to manufacturer spec.
- 5Final invoice with rebate applied. The NYS Clean Heat rebate is deducted directly from your final invoice. You pay the net amount, not the sticker price minus a rebate you have to wait for.
- 6Tax-credit packet. We hand you a folder containing the AHRI certificate, the install invoice, and a one-page guide for completing IRS Form 5695. You (or your accountant) file the federal credit with your next return.
Spring 2026 Is the Sweet Spot
Spring and fall installs avoid the summer scheduling crunch and usually pair with the highest active manufacturer rebates. Lock in your spot now.
Schedule a Free EstimateCommon Eligibility Questions
Do I Need to Replace My Existing System Entirely?
Not always. The largest rebates require whole-home conversion, but partial installs (such as a 2-zone ductless system added to an oil-heated colonial) are still eligible for a smaller rebate plus the federal credit. Many Long Island homeowners use a hybrid approach the first year and then phase the oil system out in year two or three when budget allows.
What If My Electric Panel Is Too Small?
Cold-climate heat pumps typically draw between 30 and 60 amps depending on size. If your existing panel is a 100-amp service that's already heavily loaded (electric stove, dryer, EV charger), you may need a 200-amp service upgrade. The cost is rolled into the project and the labor is also eligible for the federal Section 25C credit at 30% up to the cap.
Will a Heat Pump Work on the Coldest Long Island Winter Day?
Yes, when properly sized and properly cold-climate-rated. Long Island's 99% winter design temperature is in the 11°F to 13°F range depending on town. Modern Hyper-Heat / Cold-Climate models maintain 100% of nameplate capacity down to about 5°F and continue to produce useful heat into the negative single digits. We size every job to the design temperature and confirm performance with the manufacturer's published capacity tables, not marketing brochures.
Is Geothermal (Ground-Source) Worth Considering?
For homes on larger lots in Wading River, Manorville, Riverhead, and the East End, ground-source heat pumps qualify for higher rebate tiers and a separate, larger federal tax credit (the Section 25D residential energy credit at 30% with no cap). The upfront cost is significantly higher than air-source, but lifetime energy savings are also substantially higher. We design and install both types and walk through the payback math before recommending either.
Long Island Service Area for Rebate-Eligible Installs
We install rebate-eligible heat pumps across Suffolk and Nassau counties from our base in Wading River, NY. Towns we work in regularly include Riverhead, Mount Sinai, Rocky Point, Shoreham, Miller Place, Sound Beach, Port Jefferson, Setauket, Stony Brook, Smithtown, Hauppauge, Commack, Northport, Huntington, Centereach, Selden, Coram, Medford, East Setauket, Nesconset, Lake Grove, Holbrook, Patchogue, Bayport, Bohemia, Sayville, Yaphank, Manorville, Calverton, Aquebogue, Jamesport, Mattituck, Cutchogue, Southold, Greenport, Westhampton, Hampton Bays, Southampton, East Hampton, Sag Harbor, plus the Nassau side from Massapequa to Manhasset.
Suffolk County
- Wading River
- Riverhead
- Mount Sinai
- Rocky Point
- Shoreham
- Port Jefferson
- Setauket
- Smithtown
- Huntington
- Patchogue
- Manorville
- Westhampton
Nassau County
- Hempstead
- Oyster Bay
- Long Beach
- Garden City
- Hicksville
- Levittown
- Massapequa
- Mineola
- Freeport
- Westbury
- Plainview
- Syosset
- Bethpage
- Farmingdale
- Manhasset
- Great Neck
- Port Washington
- Roslyn
- Glen Cove
- Rockville Centre
- Valley Stream
- Lynbrook
- Wantagh
- Bellmore
Related Reading
Disclaimer: rebate amounts, eligibility tiers, and program rules are set by NYSERDA, PSEG Long Island, National Grid, and the IRS, and they update regularly. Figures cited here reflect the 2026 program cycle as of publication date. We confirm current rebate values for your specific install at the time we file the paperwork.