Solar Plus a Heat Pump: Is It Worth Replacing Oil Heat on Long Island?
Oil heat is one of the biggest bills in a Long Island home. Here's what happens when a heat pump and solar replace it.
By Steve Maroney, founder of Power House Home Energy · Updated October 2026
For many Long Island homes that heat with oil, yes. A home burning about 800 gallons a year spends roughly $4,900 on oil at $6.14 a gallon. A modern heat pump replaces most of that with electricity, adding very roughly 9,000–10,000 kWh a year, and solar sized for the whole home covers that new load, so the oil bill largely goes away. PSEG Long Island rebates of $4,000 to $7,500 lower the heat pump cost, Rate 580 cuts winter delivery charges, and you can keep your oil system as backup.
How solar and a heat pump work together
A heat pump moves heat instead of burning fuel, so it delivers far more heat than the electricity it uses. That makes it efficient, but it does raise your electric use. Solar is what makes the switch pay off: we size the panels for your home and the heat pump together, so the same system that covers your electricity also covers your heat. Heat pumps also cool, so many homeowners replace an aging central AC at the same time.
What's available on Long Island in 2026
| Incentive | What it's worth |
|---|---|
| PSEG Long Island whole-home heat pump rebate | $4,000 at market rate; $5,000 for moderate-income households or Disadvantaged Community areas; $7,500 for income-qualified homes |
| Rate 580 | Once a heat pump is your primary heat, delivery charges drop 40% on usage above 400 kWh a month, every October through May |
| Solar incentives | New York's 25% solar tax credit (up to $5,000), plus our Participate Energy Pre-Paid Lease, an incentive that lowers your investment by 25–35% |
| Federal heat pump credit | Expired December 31, 2025; no longer available for new installs |
To qualify for the rebate, the heat pump must be sized to cover 100–120% of the entire home's heating load, based on a Manual J calculation, and installed by a participating contractor. You can keep your oil or gas system as backup with dual-fuel controls, or remove it entirely. Either way qualifies.
What it looks like in numbers
On our cost page, a home with a $250 monthly electric bill that replaces oil heat with a heat pump needs a larger solar system, about 17 kW, sized for the home and the heat pump together. The oil bill goes away and the solar covers the new heating load. Heat pump equipment is priced separately, and the PSEG Long Island rebate lowers it.
A Long Island solar and heat pump project
Solar plus an oil-to-heat-pump upgrade
A 39-panel system with coordinated tree work and roof modifications, paired with replacing oil heat with a high-efficiency heat pump, so the panels cover heating as well as electricity.
★★★★★“Power House made the “going solar” process super easy. Steve is incredibly knowledgeable and coordinated every aspect for a fast and easy install that is saving me a lot of money. He presented several finance options, coordinated solar installation, tree cutting, roof modifications, heat pump and more and made sure every question was addressed and thoroughly answered every step of the way”
JimStony Brook, NY · Google review
Savings figures are projections from the customer's proposal, based on their usage and utility rate assumptions. Actual savings vary.
When it's less of a win
We look at your heating bills, your house and your roof together, and tell you honestly whether the switch makes sense. A heat pump install typically takes one day.
Rebate amounts and Rate 580 terms are set by PSEG Long Island and can change. We confirm your rebate tier during your assessment. Oil cost example uses $6.14 a gallon; your price and usage will differ.
Common questions
Is it worth replacing oil heat with a heat pump on Long Island?
For many homes, yes, especially paired with solar. A home burning about 800 gallons of oil a year spends roughly $4,900 on oil. A heat pump replaces most of that with electricity, and solar sized for the home covers the new load. PSEG Long Island rebates of $4,000 to $7,500 lower the cost.
How much is the PSEG Long Island heat pump rebate?
For a whole-home air source heat pump in a single-family home: $4,000 at market rate, $5,000 for moderate-income households or homes in Disadvantaged Community areas, and $7,500 for income-qualified homes. The heat pump must cover 100–120% of the home's heating load.
Can I keep my oil boiler as backup?
Yes. You can keep your oil or gas system as backup with the required dual-fuel controls, or remove it. Either path qualifies for the same PSEG Long Island rebate.
What is PSEG Long Island Rate 580?
Rate 580 is for homes where a heat pump is the primary heat source. It cuts delivery charges by 40% on usage above 400 kWh a month, every October through May.
Do heat pumps work in Long Island winters?
Yes. Today's cold-climate heat pumps are built to heat homes through Long Island winters, and keeping your existing system as backup covers the coldest days.