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PSEG Heat Pump Rebate

PSEG heat pump rebate payments reach up to $10,000 in New Jersey for a heat pump system that heats your whole home. Customers of PSEG can claim rebates in both New Jersey and New York. In New Jersey, a heat pump water heater can earn up to $750. Income-qualified households in New Jersey can receive up to $12,000.

Find out what your address gets

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Heat pump outdoor unit on a concrete pad beside a brick ranch house, the kind of install New Jersey heat pump rebates help pay for
Heat pump rebate (income level does not matter)
New Jersey: up to $10,000
If your income meets the rules
New Jersey: up to $12,000
Heat pump water heater
$750 New Jersey
Tax credit through federal 25C
This credit has ended. No credit applies to heat pumps installed after 31 December 2025.

Review current rules and apply at the official sites: PSE&G HVAC Instant Rebates Program and Residential Building and PSEG Long Island heat pump rebates

PSEG Heat Pump Rebate Amounts

These PSEG rebates pay toward heat pumps and heat pump water heaters, based on system and income.

What you installRebateWhoConditionsProgramState
Clean Heat – Full Displacement: an air-source heat pump for cold climates (ducted or ductless)For the largest system, the rebate is the lesser of 50% of the project cost or $10,000Any incomeConversion for gas or delivered-fuel customers; remove or disable the old fossil fuel heating; NEEP-listed ccASHP required (SEER2 > 15 and HSPF2 > 8.5 for ductless; SEER2 > 14.3 and HSPF2 > 7.7 for ducted; COP > 1.75 at 5°F); Manual J heat load sizing must cover at least 100%; submit a decommissioning form. You can add up to $2,000 for decommissioning, up to $2,000 for re-ducting, and $2,000 for each extra ccASHP you needHVAC Instant Rebates and Building Decarbonization RebatesNew Jersey
Clean Heat – Full Displacement: an air-source heat pump for cold climates (LMI)For the largest system, the rebate is the lesser of 60% of the project cost or $12,000Income-qualifiedLow- to moderate-income customer rebate (in place of the $10,000 conversion rebate); the same equipment and add-on rules applyHVAC Instant Rebates and Building Decarbonization RebatesNew Jersey
Ground Source Heat Pump (gas customer conversion)The rebate is the lesser of 50% of the project cost or $3,000 per 10,000 BTUHAny incomeFor open loop, EER ≥ 21.1 and COP ≥ 4.1; for closed loop, EER ≥ 17.1 and COP ≥ 3.6; a loop design and decommissioning form must be providedHVAC Instant Rebates and Building Decarbonization RebatesNew Jersey
Ground Source Heat Pump (delivered fuel customer conversion)Project cost at 50% or $4,000 per 10,000 BTUH, whichever is lowerAny incomeHVAC Instant Rebates and Building Decarbonization RebatesNew Jersey
Ground Source Heat Pump (LMI)Extra rebate amount: $1,000 per 10,000 BTUH or 10% of project costIncome-qualifiedThe gas or delivered fuel conversion rebate increases by this amountHVAC Instant Rebates and Building Decarbonization RebatesNew Jersey
Heat Pump Water Heater (converting from gas or delivered fuel)$750Any incomeReplace a storage or tankless water heater that uses fossil fuel; UEF ≥ 2.2 (120V) or ≥ 3.3 (240V)HVAC Instant Rebates and Building Decarbonization RebatesNew Jersey
Cold Climate Air-Source Heat Pump (HVAC Instant Rebate)$600Any incomeCOP ≥ 1.75 at 5°F; SEER2 ≥ 15.2, HSPF2 ≥ 8.1, and EER2 ≥ 10. You receive the instant rebate through a participating contractorHVAC Instant Rebates and Building Decarbonization RebatesNew Jersey
Cold Climate Air-Source Heat Pump (HVAC Instant Rebate, LMI)$600 + additional $300 per eligible measureIncome-qualifiedHousehold income at 400% of Federal Poverty Levels or less, or other LMI proofHVAC Instant Rebates and Building Decarbonization RebatesNew Jersey
Air-Source Heat Pump Split System – Tier 2$450Any incomeSEER2 ≥ 17.1, EER2 ≥ 11.7, HSPF2 ≥ 7.8HVAC Instant Rebates and Building Decarbonization RebatesNew Jersey
Air-Source Heat Pump Split System – Tier 1$300Any incomeSEER2 ≥ 15.2, EER2 ≥ 11.7, HSPF2 ≥ 7.8HVAC Instant Rebates and Building Decarbonization RebatesNew Jersey
Single Package Air-Source Heat Pump – Tier 2 / Tier 1$450 / $300Any incomeTier 2 SEER2 ≥ 17.1, EER2 ≥ 10.6, HSPF2 ≥ 7.2; Tier 1 SEER2 ≥ 15.2HVAC Instant Rebates and Building Decarbonization RebatesNew Jersey
Heat Pump Water Heater (via contractor, HVAC Instant Rebate)$450Any incomeHVAC Instant Rebates and Building Decarbonization RebatesNew Jersey
Single family, market rate: cold climate ASHP or air-to-water for the whole house$4,000Any incomeYour system must satisfy Manual J at 100-120% of the whole heating load; it must also be NEEP-listed, with either integrated controls or removal of the fossil systemLong Island heat pump rebatesNew York
Same, market rate in a Disadvantaged Community$5,000Any incomeLong Island heat pump rebatesNew York
Same, moderate income (<80% AMI)$5,000Income-qualifiedIncome verification requiredLong Island heat pump rebatesNew York
Same, low income (<60% AMI)$7,500Income-qualifiedIncome verification requiredLong Island heat pump rebatesNew York

Claiming PSEG Heat Pump Rebates

  • For New Jersey, HVAC Instant Rebates and Building Decarbonization Rebates: A contractor who participates confirms your eligibility and installs the equipment. That contractor shows the instant rebate on the invoice you receive and has you sign the customer acknowledgment form. The contractor applies for on-bill repayment before the project starts. Your contractor must come from the PSE&G HVAC Instant Rebates Program, or from Whole Home Energy Solutions and be authorized for building decarbonization projects.
  • Long Island heat pump rebates in New York: Use a participating contractor. Customers who qualify by income finish PSEG Long Island's income verification. Only a participating PSEG Long Island contractor is allowed.

Ask installers for quotes that include this rebate

Most rebates on this page are paid through the installer or need the installer's paperwork, so the quote is where the money is settled. Tell us the ZIP code and what you want installed, and installers who work with these programs send a written price with the rebates taken off.

You consent to up to three heat pump installers, or one firm that pairs homeowners with installers, in your ZIP code reaching you about this project by call, text or email at the number and address you entered when you send this request, and those calls and texts may be placed with automated dialing technology. Agreeing is not a condition of any purchase or rebate.

See also