Is a heat pump cheaper than gas in New Jersey?
Northeast · Mixed (e.g. Mid-Atlantic, Pacific NW, lower Midwest) · EIA residential fuel prices
For a reference 2,000 sq ft home in New Jersey (assumed seasonal COP 2.8, 95% gas furnace), a heat pump costs about $885/year to run versus about $519/year for natural gas — so a heat pump is about $366/yr more than a gas furnace. It is cheaper than propane ($1,513/yr), cheaper than heating oil ($1,716/yr), and far cheaper than electric resistance ($2,478/yr). The cheapest option here is natural gas furnace (95% afue). These are estimates — verify with an HVAC pro.
Source: EIA Electric Power Monthly, Table 5.6.A (residential). Data as of June 2026.
New Jersey residential fuel prices
| Fuel | Residential price | Source / period |
|---|---|---|
| Electricity (residential) | 23.49¢/kWh | EIA, March 2026 |
| Natural gas (residential) | $1.37/therm | EIA, March 2026 |
| Heating oil (residential) | $5.612/gal | EIA, Central Atlantic (PADD 1B) |
| Propane (residential) | $3.539/gal | EIA, Central Atlantic (PADD 1B) |
Source: EIA (electricity, natural gas, heating oil & propane). Data as of June 2026.
New Jersey residential natural gas is $14.21/Mcf (about $1.37/therm), EIA March 2026. Heating oil and propane are EIA residential prices for Central Atlantic (PADD 1B) (Week ending 2026-03-30) — EIA does not publish these per individual state.
Annual heating cost in New Jersey — every system compared
Reference: a 2,000 sq ft home in a mixed (e.g. mid-atlantic, pacific nw, lower midwest), roughly 36 MMBTU/year of useful heat. Energy cost only (no equipment, install or maintenance):
| Heating system | Annual energy cost | Annual use |
|---|---|---|
| Natural gas furnace (95% AFUE) | $519/yr | 379 therms |
| Heat pump | $885/yr | 3,768 kWh |
| Propane furnace (92% AFUE) | $1,513/yr | 428 gal |
| Heating oil (85% AFUE) | $1,716/yr | 306 gal |
| Electric resistance (baseboard, COP 1.0) | $2,478/yr | 10,551 kWh |
Source: EIA fuel prices + ENERGY STAR energy conversions. Data as of June 2026.
Cheapest to run in this reference case: Natural gas furnace (95% AFUE). Run your own home size, COP and prices.
Heat pump vs each fuel in New Jersey
| Comparison | Heat pump | Other system | Heat-pump result |
|---|---|---|---|
| vs natural gas (95% AFUE) | $885 | $519 | $366/yr more |
| vs propane (92% AFUE) | $885 | $1,513 | Saves $628/yr |
| vs heating oil (85% AFUE) | $885 | $1,716 | Saves $831/yr |
| vs electric resistance (COP 1.0) | $885 | $2,478 | Saves $1,593/yr |
How New Jersey compares with similar states
The five states with the closest electricity price to New Jersey, and how heat-pump-vs-gas savings look there:
| State | Electricity ¢/kWh | Heat-pump vs gas (ref. home) |
|---|---|---|
| New Jersey (this state) | 23.49¢ | $366/yr more |
| Vermont | 24.11¢ | $1,395/yr more |
| Maryland | 22.20¢ | $208/yr more |
| District of Columbia | 25.00¢ | $284/yr more |
| Michigan | 21.20¢ | $806/yr more |
| Pennsylvania | 20.92¢ | $483/yr more |
Frequently asked questions
Is a heat pump cheaper to run than gas in New Jersey?
Not in this reference case. For a 2,000 sq ft home in New Jersey (assumed seasonal COP 2.8, 95% gas furnace), a heat pump costs about $885/year vs about $519/year for gas, because New Jersey has relatively high electricity prices. A heat pump is still typically cheaper than propane, oil and electric resistance here.
What does it cost to heat a home in New Jersey?
Using EIA March 2026 prices and a 2,000 sq ft home in a mixed (e.g. mid-atlantic, pacific nw, lower midwest) (about 36 MMBTU/yr), estimated annual energy cost is about: heat pump $885, natural gas $519, propane $1,513, heating oil $1,716, electric resistance $2,478. The cheapest here is natural gas furnace (95% afue).
Is a heat pump cheaper than propane or heating oil in New Jersey?
In this reference case, vs propane a heat pump saves about $628/year, and vs heating oil it saves about $831/year. Heat pumps usually beat both delivered fuels comfortably because they deliver far more heat per unit of energy.
How does New Jersey rank for heat-pump savings?
On heat-pump savings vs a gas furnace (reference 2,000 sq ft home), New Jersey ranks #32 of 51 states (1 = saves the most). This reflects New Jersey's mix of 23.49¢/kWh electricity and $1.37/therm gas.
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Sources & accuracy
Electricity: EIA Electric Power Monthly, Table 5.6.A (residential) (March 2026); natural gas: EIA residential price (March 2026); heating oil & propane: EIA Heating Oil and Propane Update (Central Atlantic (PADD 1B), Week ending 2026-03-30); energy constants: ENERGY STAR Thermal Energy Conversions. All U.S. public domain. These are statewide/regional averages and the comparison is an estimate, not a quote or engineering analysis. Actual savings depend on your home, climate, equipment and rates. Verify with an HVAC professional. See methodology and disclaimer.
Last updated: 2026-06-29