The Federal 25C Tax Credit Is Gone — But NYS & Utility Rebates Are Still Available (For Now)
As of January 1, 2026, the federal Energy Efficient Home Improvement Tax Credit (Section 25C) has officially ended. Homeowners can no longer claim federal tax credits for insulation, air sealing, heat pumps, or other energy efficiency upgrades completed after December 31, 2025.
While the loss of the federal credit is disappointing, the good news for New York homeowners is that state and utility rebates remain strong — and in some cases, have increased for 2026. These programs are actively helping homeowners reduce upfront project costs, but it’s important to understand one key reality:
These rebates are not guaranteed forever and can change or be reduced with little notice.
PSEG Long Island Rebates: Increased Incentives Available Right Now
For homeowners with PSEG Long Island as their electric provider, 2026 brings some of the strongest utility incentives we’ve seen.
Current PSEG rebate levels include:
Up to $8,000 for low-income households
Up to $5,000 for moderate-income households
Up to $4,000 for all other customers
These rebates apply to qualifying energy efficiency and electrification upgrades, including insulation, air sealing, and high-efficiency heat pump systems. Eligibility and rebate amounts depend on household income and project scope.
Who qualifies?
PSEG rebates are available only to customers who receive electric service from PSEG Long Island, which primarily serves Nassau County, Suffolk County, and parts of Queens.
These incentives significantly reduce out-of-pocket costs, but like all utility-funded programs, they are subject to annual budgets and policy changes. Once funds are allocated or guidelines shift, rebates can be reduced or paused without warning.
NYSERDA Programs Still Offering Meaningful Savings
In addition to PSEG rebates, New York State continues to offer incentives through NYSERDA, helping homeowners improve comfort, efficiency, and energy performance.
NYSERDA Comfort Home Program
The Comfort Home Program focuses on improving the building envelope through high-impact upgrades such as insulation and air sealing. Incentives are available for qualifying “seal and insulate” packages designed to address drafts, uneven temperatures, and high energy bills.
This program is especially effective for homeowners looking to improve comfort and efficiency before upgrading heating or cooling equipment.
NYSERDA EmPower+ (Income-Qualified Households)
For income-qualified homeowners, EmPower+ remains one of the most valuable programs available. Depending on eligibility, EmPower+ may cover a significant portion — or in some cases nearly all — of the cost for insulation, air sealing, and related energy efficiency upgrades.
These programs are still active in 2026, but funding availability is not unlimited and participation requirements can change.
Con Edison Incentives Still Available in NYC & Surrounding Areas
Homeowners who receive electric service from Con Edison may also qualify for utility rebates for insulation, air sealing, and heat pump installations. These incentives are commonly paired with NYSERDA programs and vary by project type and service territory.
As with all utility programs, rebate levels and eligibility criteria are subject to change, making early planning essential.
Why Acting Now Matters
With the federal tax credit gone, state and utility rebates are now the primary financial incentive for energy upgrades. While these programs remain strong today, history shows that:
Rebate amounts can be reduced mid-year
Program rules can tighten
Funding can be exhausted
Programs can pause or change with little notice
Homeowners who wait risk missing out on thousands of dollars in available incentives.
Bottom Line
Even without the federal 25C tax credit, New York homeowners still have access to substantial savings in 2026 — especially through PSEG Long Island, NYSERDA Comfort Home, EmPower+, and Con Edison programs.
The opportunity is still here — but it won’t last indefinitely.
If you’re considering insulation, air sealing, or energy-efficient heating and cooling upgrades, now is the time to lock in incentives while they are still available.
