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PSEG expands rebates on efficient air-source heat pumps

Mike Voltz, director of energy efficiency and renewables

Mike Voltz, director of energy efficiency and renewables for PSEG, with an air-source heat pump at the company's energy conference Thursday. Credit: Newsday

PSEG Long Island has announced an expansion of rebates for an efficient new type of heating and cooling system called air-source heat pumps as part of an initiative to reduce greenhouse gas emissions in line with aggressive new state mandates.

Rebates for the systems, which customers can apply for beginning Nov. 15, can reduce the price to buy and install the systems by thousands of dollars, PSEG said. The utility already offers a special electric-heat rate for those who install the systems that is 3 cents lower than standard rates during the heating season, October through May, said Mike Voltz, director of energy efficiency and renewables for PSEG.

Voltz said the rebates amount to $600 to $1,000 per ton for systems that average around three tons, allowing customers to reduce system costs by up to of $3,000. The systems can cost between $6,000 and $10,000 before the rebates.

About 20 companies are deemed qualified to install the systems and are listed in PSEG’s Home Comfort program.

Heat pumps use the same compression and air blower equipment that central air-conditioning systems use in summer, only the process is reversed in winter to provide heat. They draw and compress heat from outside air and send it throughout a house via ducts. The systems are many times more efficient than conventional heating systems, and considerably cleaner, using electric power. 

Voltz said homes that already have ducts can install a new air-source heat pump system for between $6,000 and $8,000. Those that require new duct work would add about $2,000. Prices can range as high as $15,000, depending on home size. 

The rebates are $600 per ton for systems that already have ducts, $800 for those that use oil heat and require new duct work, and $1,000 per ton for newly constructed homes.

PSEG is maintaining existing rebates for geothermal systems, also known as ground-source heat pumps, at $1,000-$2,000 per ton depending on the system’s efficiency. PSEG provides rebates for 200 to 300 geothermal systems a year, Voltz said. Geothermal systems are eligible for a federal tax credit while air-source heat pumps are not, Voltz said.

PSEG’s existing rebate for air-source heat pumps amount to $400 for the entire system, limiting annual installations to around 500 this year.

PSEG's goal next year is to increase rebated installations to around 2,200, Volts said at the company's energy conference in Huntington Thursday. 

Jay Best, chief operating officer of Green Team LI, a Holbrook-based contractor, said Long Island's climate makes it "really ideal" for heat pumps, and a logical conversion for customers with dirtier oil-based heat. Best said he expects the number of installers to increase as central air-conditioner installers discover heat pumps to be a "very logical" extension of the business. The technology has advanced in recent years, he added. 

Newer heat pumps can draw extra heat from outside air down to around zero degrees, far more efficient than older systems that were limited to 32 degrees. Some customers keep backup heating systems in place for super cold weather, including oil or electric heat that is eligible for the rate discount, Voltz said.  

Voltz said customers building new homes, particularly those that don’t have access to natural gas — with or without National Grid’s current moratorium on new hookups — would benefit from a heat pump system.

“If someone is unable to obtain natural gas, their options are oil or propane or elect resistance heat,” he said. “We believe a heat pump is a good solution” for those customers, he added.

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