Fix First HomeWhat home-upgrade rebates actually pay — and who you apply to.

Fix First Home › New Jersey › PSE&G building decarbonization rebates (heat pump conversions)

PSE&G building decarbonization rebates (heat pump conversions) open

Administered by PSE&G, through contractors authorized for building decarbonization.

PSE&G pays up to $10,000, or half the cost of the largest system, to remove a gas or oil heating system and heat the whole home with cold-climate heat pumps; up to $12,000 or 60% for low- and moderate-income households. Up to $2,000 each for decommissioning, new ducts and every extra heat pump, and lesser amounts for keeping the furnace.

source · verified 2 October 2026 · amounts in US dollars

What it pays

Instant rebates on the contractor's invoice
UpgradeConditionAmount
Full displacement: whole home on cold-climate heat pumpsFossil system removed or disabled; lesser of $10,000 or 50% of the largest system$10,000
Full displacement, low or moderate incomeLesser of $12,000 or 60%$12,000
Decommissioning the old systemRequired with full displacement$2,000
Re-ductingIf Manual D calls for it$2,000
Each additional cold-climate heat pumpNeeded to meet the heat load$2,000
Dual heat: cold-climate heat pump, fossil system keptLesser of $5,000 or 50% ($6,000 or 60% low/moderate income)$5,000–$6,000
Hybrid heat: heat pump replaces cooling onlyLesser of $2,000 or 30% ($3,000 or 40% low/moderate income)$2,000–$3,000
Integrated control unitDual and hybrid heat; up to two a home; each$1,500
Heat pump water heater replacing a fossil one$750
240-volt circuitPer circuit, up to four, for each measure$300
Geothermal, per 10,000 Btu/h of capacity
UpgradeConditionUp to
Ground-source heat pump replacing gasLesser of $3,000 per 10,000 Btu/h or 50% of cost$3,000
Ground-source heat pump replacing oil or propaneLesser of $4,000 per 10,000 Btu/h or 50%$4,000
Ground-source, low or moderate incomeExtra, per 10,000 Btu/h (or 10% of cost)$1,000

Full-displacement heat pumps must be NEEP-listed and sized to at least 100% of the Manual J heat load, with Manual S and a decommissioning form submitted.

Who is eligible

who
PSE&G residential electric customers in one- to four-unit homes heated by gas or delivered fuel (oil or propane); not new construction.
low and moderate income
At or below 400% of the poverty line ($132,000 for four), a qualifying census tract or Overburdened Community, or LIHEAP, SSI or TANF.
financing
Up to $50,000 at 0% on the bill for a standalone decarbonization project, $2,000 of it for electrical upgrades (no limit for income-qualified customers).

What disqualifies you

The rules people find out about after the work is done.

  • Homes already heated by electricity, which have no fossil system to convert.
  • Heat pumps not on the NEEP cold-climate list, for the full and dual displacement rebates.
  • Contractors not authorized for building decarbonization.

Where the application goes

Use a PSE&G HVAC or Whole Home Energy Solutions contractor authorized for decarbonization; the rebate comes off the invoice.

Where the application goes
If this is youApply here
Program pagehomeenergy.pseg.com
Phone1-855-846-2895

The thing most pages get wrong

The $10,000 headline is a ceiling, not a payment: PSE&G pays the lesser of $10,000 and half the cost of the largest system (60% and $12,000 for low and moderate incomes), before the decommissioning, re-ducting and extra-unit rebates.

Keeping the furnace pays less

A cold-climate heat pump that keeps the gas furnace as backup with integrated controls earns up to $5,000 ($6,000 for lower incomes) plus $1,500 for the control; one that only replaces the air conditioner earns up to $2,000 ($3,000).

New Jersey's gas utilities pay the other way too

NJ Natural Gas pays up to $2,000 per zone for a heat pump that works alongside a gas furnace, and every gas utility still pays for condensing gas furnaces and boilers.

Sources