Yes, just add the new entity. Change the entity_id of the old entity to a holder name, change the entity_id of the new entity to what the old entity’s entity_id used to be.
EDIT:
The new process is:
- Delete old entity
- Rename new entity to old entity_id
- New entity will inherit old entities history
Do not under any circumstances rename the old entity before you delete it, this will cause the history to follow the renamed name.