PSEG Long Island Rates Just Jumped 12–13% — How Solar Can Help

If your PSEG Long Island bill looked higher than expected this year, you're not imagining it. PSEG LI raised residential rates by approximately 12–13% in early 2026. The average Long Island residential electricity rate is now around 27¢/kWh. For a typical household using 1,100 kWh/month, that increase adds more than $360 per year — with no change in energy usage.

Solar won't eliminate your electric bill entirely, but it does something a rate increase cannot: it locks in the cost of a substantial portion of your energy for 25 years. Here's what Long Island homeowners need to know about going solar in 2026.

The Rate Increase: What Happened

PSEG Long Island's 12–13% rate increase reflects ongoing costs: infrastructure investments, grid hardening after past storm damage, and rising operational and fuel costs across the service territory. The approved rate increase took effect in early 2026 and applies to residential customers across PSEG LI's service area.

Long Island already had electricity rates well above the national average before this increase. At ~27¢/kWh, Long Island homeowners now pay roughly 60% more than the national average. And this almost certainly won't be the last rate increase.

How Solar Locks In Your Energy Cost

When you go solar, a meaningful portion of your electricity — typically 80–100% of your annual usage — comes from your roof rather than from PSEG LI. That portion is priced at the cost of your system amortized over its 25-year life, not at whatever rate PSEG charges today or next year.

If rates go up another 10% in 2027 — which history suggests is plausible — your solar-generated electricity doesn't get more expensive. You've already paid for it. At 3% annual rate escalation, what costs 27¢/kWh today costs 47¢/kWh in 2051. A Long Island homeowner who goes solar today insulates themselves from a significant portion of that escalation.

NY Incentives Available for Long Island Homeowners in 2026

NY State Income Tax Credit — 25%, Up to $5,000

New York State offers a 25% income tax credit on residential solar installation costs, capped at $5,000. This is a dollar-for-dollar reduction in your NY state income tax liability — not a deduction. Any unused credit can be carried forward for up to 5 years until fully applied.

NY Battery Storage Rewards — Up to $6,250

New York's Battery Storage Rewards program provides financial incentives for residential battery systems paired with solar. On Long Island, eligible homeowners may qualify for up to $6,250 in battery incentives. Beyond the incentive, battery storage adds a practical benefit that many Long Island homeowners find compelling: backup power during outages. Given PSEG LI's history of extended storm-related outages, solar + battery is an increasingly attractive combination.

NY Sales Tax Exemption

New York State fully exempts solar energy equipment from state and local sales tax. With New York's combined rates, this saves Long Island homeowners $1,500–$3,500 at purchase — applied automatically at the point of sale.

NY Property Tax Exemption

New York law provides a 15-year property tax exemption on the increased assessed value from a solar installation. A Zillow study found that homes with solar sell for ~4% more — and on Long Island, where home values are high, that's a meaningful increase in market value that doesn't translate to a higher tax bill.

PSEG LI Energy Credit Bank (Net Metering)

Long Island's net metering program — the PSEG LI Energy Credit Bank — credits your account at the retail rate for excess solar generation. Surplus electricity your system sends to the grid during high-production days accumulates in your Energy Credit Bank and offsets your bill during lower-production periods. This significantly improves annual economics for solar customers.

NY-Sun Rebate: Honest Status in 2026

The NY-Sun residential incentive block for PSEG Long Island territory has been closed since 2016. Standard-income Long Island homeowners should not count on a NY-Sun rebate. The only NY-Sun residential incentive currently available in PSEG LI territory is the Affordable Solar program, which provides approximately $0.40/watt for households at or below 80% of Area Median Income (AMI).

Why the Timing Matters

Every month you delay going solar is another month at PSEG LI's current rates — and potentially higher rates to come. Solar systems typically take 2–4 months from contract through final interconnection and utility approval. Homeowners who start the process today will be generating their own electricity by mid-to-late 2026 — before the next rate cycle begins.