Plenty of North Jersey homes heat with natural gas, and a question we hear often is whether a heat pump would be cheaper to run. It is a fair question. In the heat pump vs gas furnace question, the answer depends almost entirely on what New Jersey charges for gas and electricity.
The short answer: at last winter's prices, a high-efficiency gas furnace costs less to run over a winter than any Mitsubishi heat pump we install, including the cold-climate models. That does not make a heat pump a bad buy. It changes when it makes sense, and how you should set one up. Here is the math, using public numbers you can check.
The prices we used
The U.S. Energy Information Administration (EIA) publishes what New Jersey households pay each month. We averaged the five heating months from November 2025 through March 2026:
- Natural gas: $14.28 per thousand cubic feet. EIA puts New Jersey's gas at 1,038 BTU per cubic foot, which works out to about $1.38 per therm.
- Electricity: 23.07 cents per kilowatt-hour.
These are statewide averages that include delivery and fixed monthly charges, so your own bill may differ. We used winter months to match the gas prices, so these figures differ slightly from our heating oil comparison. The method below works with your own rates.
What the same heat costs from each system
To compare fairly, we priced one million BTU of heat (about 10 therms' worth) delivered by the equipment. A furnace loses some heat up the flue, which is what its AFUE rating measures. A heat pump moves heat instead of making it, and its seasonal efficiency is published as HSPF2.
- 96% AFUE gas furnace: about $14.33 per million BTU.
- Older 80% AFUE gas furnace: about $17.20 per million BTU.
- Mitsubishi FX Hyper Heat (MUZ-FX12NLHZ), 12.4 HSPF2: about $18.60 per million BTU.
- Mitsubishi GX Hyper Heat (MUZ-GX12NLHZ), 10.0 HSPF2: about $23.07 per million BTU.
- Mitsubishi WX-Series (MUZ-WX12NL), 8.5 HSPF2: about $27.14 per million BTU.
These are Mitsubishi's published ratings for single-zone 12,000 BTU ductless models. A whole house needs several zones or a larger system with its own rating, so your quote should show the efficiency of the system proposed. Specs verified against Mitsubishi submittals, October 2026.
A modern condensing furnace, like the 96% AFUE Trane furnaces we install, is the cheapest heat on this list. Even the most efficient heat pump here lands close to what an older 80% furnace costs. Furnace figures leave out the electricity the blower uses, which a heat pump's rating already counts, and ducts lose some heat on the way to your rooms. Both push a furnace's real cost somewhat higher than shown, so treat the gap as a range rather than an exact figure.
Mild days narrow the gap
Heat pumps are at their best in mild weather, so we checked that too. For a heat pump to beat a 96% furnace at these prices, it would need to deliver about 4.7 units of heat for every unit of electricity. At rated output at 47°F, Mitsubishi lists a COP (heat out per unit of electricity in) of 3.92 for the GX and 4.2 for the FX, which works out to about $17.25 and $16.10 per million BTU. Both still cost more than the furnace's $14.33. Running gently on a mild day, the FX's NEEP listing shows about 5, which edges out the furnace, so in spring and fall the two run close.
On a 5°F night the gap widens. Running flat out, the GX costs about $37.56 per million BTU and the FX about $30.73. A heat pump still heats on those nights; it just costs more to do it than gas does.
Run it with your own gas bill
Your gas bill lists the therms you used. Add up last winter's therms, then subtract a typical summer month's therms for each winter month, since that gas heats water and cooks, not the house. As an example, a home that burned 800 therms in a 96% furnace paid about $1,101 for that gas at last winter's average price. The same heat would take about 7,680 kWh from a GX, or about $1,772, and about 6,194 kWh from an FX, or about $1,429. These use single-zone ratings; a whole-home system has its own rating, which your quote should show.
To run your own numbers, multiply your heating therms by about 7.7 for an FX or 9.6 for a GX to get kilowatt-hours, then multiply by your electric rate. At about 17.8 cents per kilowatt-hour, the FX would match the furnace, so if your electric rate is well below the state average, or your gas rate well above it, the gap narrows.
When a heat pump still makes sense
Running cost is only part of the decision. A heat pump is worth a serious look when:
- Your central air is due for replacement. A heat pump does the cooling your AC does now, and adds a second source of heat. With integrated controls, the gas furnace can carry the cold months while the heat pump handles the shoulder seasons if your rates ever favor it. A ducted heat pump has its own rating, so ask for it in your quote.
- A room never gets enough heat. An addition, a finished attic or a bonus room over the garage often sits at the end of a duct run. A ductless unit gives that room its own heat and cooling.
- Your home heats with oil. Oil heat faces very different math, and at this season's oil prices a heat pump costs far less to run.
- You want a backup heat source. Two systems mean you still have heat if one needs a repair in January.
If none of these apply and your furnace is near the end of its life, a high-efficiency gas furnace is usually the lowest-cost choice. We will tell you that plainly at the estimate.
Rebates for gas homes on PSE&G
PSE&G publishes these instant rebates, applied through its participating contractors (verified October 2026):
- High-efficiency gas furnace: $540 for a furnace rated 95% AFUE or higher that replaces an older non-condensing furnace. Condensing-to-condensing replacements do not qualify.
- Hybrid Heat: replace your central air with a heat pump and keep the furnace, tied together with integrated controls. The rebate is the lesser of $2,000 or 30% of the project cost, plus up to $1,500 per required control unit (two maximum).
- Dual Heat: a cold-climate heat pump sized to carry the whole house, with the furnace kept as backup. The rebate is the lesser of $5,000 or 50% of the project cost, plus the same control unit rebate.
Equipment has to meet PSE&G's efficiency minimums. The GX and FX meet them and are on the NEEP cold-climate list that Dual Heat requires; the WX does not. Hybrid Heat and Dual Heat require a PSE&G electric account (or Butler Electric with PSE&G gas) and a home you own, and final eligibility depends on sizing and paperwork. If PSE&G is not your utility, we check what yours offers. The federal 25C tax credit expired at the end of 2025, so it no longer applies.
Frequently Asked Questions
Is a heat pump cheaper to run than a gas furnace in New Jersey?
Not at last winter's prices. Using EIA's New Jersey averages, a 96% AFUE gas furnace delivered heat for about $14.33 per million BTU, while the Mitsubishi FX we priced (MUZ-FX12NLHZ) came to about $18.60.
Should I replace my gas furnace with a heat pump?
If your furnace works and you have gas, replacing it with a heat pump usually raises your heating bill. A heat pump makes more sense when your AC needs replacing or when a room lacks heat.
What is a dual fuel system?
A dual fuel system pairs a heat pump with a gas furnace and uses controls to decide which one heats the house. PSE&G calls these Hybrid Heat and Dual Heat projects and offers instant rebates for both.
Does PSE&G give a rebate for a new gas furnace?
Yes. PSE&G offers a $540 instant rebate on a gas furnace rated 95% AFUE or higher when it replaces an older non-condensing furnace. Condensing-to-condensing replacements do not qualify.
Choosing Between a Heat Pump and a Gas Furnace
The heat pump vs gas furnace decision in North Jersey comes down to rates and timing. At last winter's prices, gas costs less per unit of heat, and a heat pump earns its place when it replaces your AC or heats a room the ducts miss.
Air Temp Service Co has served North Jersey homeowners since 1999, family-owned by Mario and Lori Riccobono. Both NJ licenses are on file (HIC 13VH00127600 and Master HVACR 19HC00254600), and we hold Mitsubishi Diamond Elite and Trane Premier Contractor credentials. We install heating systems across Passaic, Bergen, Essex, and Morris counties, with upfront pricing and rebate paperwork handled for you.
Call (973) 754-1232 for a free in-home estimate. We will look at your furnace, your AC and last winter's bills, and show you the math for your house before you decide.