If your home runs on an oil boiler, this winter is going to cost more. The U.S. Energy Information Administration's first weekly survey of the heating season put New Jersey residential heating oil at $6.04 a gallon for the week of October 5, 2026, which is $2.23 more than a year earlier. In its winter outlook published October 7, EIA forecast that, nationally, households heating with oil will spend about 21 percent more than last winter. That puts the heat pump vs oil heat question on the kitchen table for a lot of North Jersey families.
The short answer: with oil at $6.04 a gallon, a Mitsubishi GX Hyper Heat (H2i) heat pump delivers the same heat for less than half the cost of oil. The catch is the upfront cost, so the payback depends on how much oil you burn.
EIA's figure is a statewide average for home delivery, before taxes and cash discounts. Cash, will-call buyers are paying less. HomeHeat's statewide median on October 7 was $5.65, based on 21 reporting suppliers. The method below works with the price on your own ticket.
What a gallon of heating oil actually buys you
EIA rates one gallon of heating oil at 138,500 BTU of heat content, and some of it always goes up the chimney.
For this comparison, we credited oil with 86 percent efficiency, the federal minimum for a new oil-fired hot water boiler. That is a generous assumption for most existing equipment, and a boiler installed decades ago is unlikely to match it.
At $6.04 a gallon and 86 percent efficiency, oil heat costs about $50.71 for every million BTU that actually reaches your rooms. At the $5.65 cash price, it is still about $47.44.
What the same heat costs from a Mitsubishi heat pump
A heat pump moves heat from the outdoor air into your house instead of burning fuel, so each unit of electricity delivers about 2.5 to 3.6 units of heat for the models below. Manufacturers publish this as HSPF2, the seasonal heating rating, measured in BTU of heat per watt-hour of electricity.
EIA puts the average New Jersey residential electric rate at 23.98 cents per kilowatt-hour for January through July 2026. Using 24 cents and each model's published HSPF2, here is the cost per million BTU of delivered heat for the three Mitsubishi tiers we install:
• WX-Series (MUZ-WX12NL), 8.5 HSPF2: about $28.24 per million BTU.
• GX Hyper Heat (MUZ-GX12NLHZ), 10.0 HSPF2: about $24.00 per million BTU.
• FX Hyper Heat (MUZ-FX12NLHZ), 12.4 HSPF2: about $19.35 per million BTU.
Specs verified against manufacturer product data, October 2026. Costs calculated at 24 cents per kWh.
Even the value-tier WX delivers heat for a little over half of what oil costs at $6.04 a gallon. The GX costs less than half. For oil to match the GX, the price would have to fall to about $2.86 a gallon.
At a higher 27-cent rate, the GX works out to $27.00 per million BTU, still well under oil. EIA does expect bills for electrically heated homes to rise about 4 percent this winter, far less than its forecast for oil.
Run your own numbers from last winter's delivery tickets
Every 100 gallons of oil, burned at 86 percent efficiency, delivers about 11.9 million BTU of heat. At $6.04 a gallon, those 100 gallons cost $604. Here is what the same heat costs from a heat pump at 24 cents per kilowatt-hour:
• WX-Series: about 1,401 kWh, or roughly $336.
• GX Hyper Heat: about 1,191 kWh, or roughly $286.
• FX Hyper Heat: about 961 kWh, or roughly $231.
At GX efficiency you save about $318 for every 100 gallons of space heating the heat pump replaces, and at FX efficiency about $373. Add up last winter's delivery tickets and divide the total gallons by 100, then multiply by the savings for the tier you are considering.
If your boiler also heats your water, subtract the gallons that went to hot water first. And the ratings above are for single-zone 12,000 BTU 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.
As an illustration, a household that burned 600 gallons for space heating last winter would save about $1,910 a year at these prices if a Hyper Heat system with GX-level efficiency carried all of the heating.
HSPF2 is a seasonal average, so treat these figures as a budget estimate, not a promise for any single January night.
Will a heat pump keep up on the coldest nights?
Standard heat pumps lose output as temperatures fall. The Hyper Heat models are built for cold weather. According to Mitsubishi's submittal sheets, the GX can deliver up to 12,300 BTU of heating at 5°F, equal to its rated capacity, with guaranteed heating down to minus 13°F. The FX is rated for "100% heating capacity at outdoor temperatures -10° F with guaranteed operation down to -22° F." Both have a built-in base pan heater to help keep ice from building up under the outdoor unit.
Mitsubishi's submittals also list each model's coefficient of performance, or COP, at full output in the cold. Running flat out at 5°F, the GX has a COP of 1.80, which works out to about $39 per million BTU at 24 cents, still below oil. At minus 5°F, still at full output, its COP drops to 1.08, about $65 per million BTU, and oil becomes the cheaper heat. The FX holds a COP of 2.0 even at minus 10°F, about $35 per million BTU.
The WX is a different machine. Its output at 5°F drops to a maximum of 6,780 BTU, and Mitsubishi publishes no rating below that. It is a strong choice for cooling and shoulder-season heat, but we would not ask it to replace an oil boiler alone.
Where oil still makes sense
A fair heat pump vs oil heat comparison has to admit what oil does well.
Upfront cost is the big one. A boiler that works today costs nothing new to keep, while a heat pump is a real investment. If your boiler is young and your oil use is light, the payback can take a long time. In a home with radiators and no ductwork, a heat pump typically means ductless indoor units, one per zone, and the price rises with each zone added.
Hot water is the other. If your boiler also heats your water and you retire it completely, you will need a separate water heater, and that belongs in the quote from day one.
A hybrid setup is one practical answer. You install a Hyper Heat system to carry most of the season and keep the boiler as backup for the deepest cold, which is exactly where the GX's cost advantage runs out. At $6.04 a gallon, each gallon's worth of heat the GX takes over across the season costs less than half as much, and PSE&G has a rebate for exactly this setup.
What switching costs after New Jersey rebates
The price depends on the Mitsubishi tier and the number of zones your home needs, so we quote it after a load calculation. Several programs bring it down:
• NJ Whole Home Energy Solutions: $2,000 at 5 percent total energy savings, plus $200 for each additional percentage point, up to a maximum of $7,500 and no more than half of project costs.
• PSE&G Building Decarbonization: for oil and gas customers, the lesser of $10,000 or half the project cost when a cold-climate heat pump replaces the old system, or the lesser of $5,000 or half when the boiler stays as backup. Each additional cold-climate unit the home needs adds $2,000.
• PSE&G instant rebates and financing: $300 to $600 per heat pump by efficiency tier, plus interest-free on-bill repayment for PSE&G electric customers.
• JCP&L: $500 or $750 for air-source heat pumps by efficiency tier, $1,000 for cold-climate models, and $750 for qualifying ductless mini-split heat pumps, plus interest-free on-bill loans of $2,500 to $25,000 through Whole Home Energy Solutions.
PSE&G's decarbonization rebates require a cold-climate model on the NEEP list, sized to the home's full heating load. The GX and FX ratings clear its efficiency minimums. The WX does not. We check which programs combine for your project.
The current state program cycle runs through June 30, 2027, and terms can change before then. One warning: the federal 25C tax credit expired on December 31, 2025. If a quote still subtracts it from your price, ask the contractor to show you where that money comes from.
Frequently Asked Questions
Is a heat pump cheaper to run than oil heat in New Jersey?
At October 2026 prices, yes, by a wide margin. Oil at $6.04 a gallon costs about $50.71 per million BTU of delivered heat, while a Mitsubishi GX at 24 cents per kilowatt-hour costs about $24.00. Oil would need to drop to about $2.86 a gallon to match it.
Will a heat pump heat my whole house without oil backup?
A properly sized Hyper Heat system can. The GX can deliver its full rated output at 5°F, and the FX at minus 10°F. Correct sizing matters as much as the equipment, so a load calculation comes first.
Should I keep my oil boiler as a backup?
For many homes it is a sensible first step. The heat pump carries most of the winter at a lower cost per BTU, and the boiler stands by for the coldest stretches.
What rebates can I get for switching from oil to a heat pump?
PSE&G customers who switch off oil can qualify for up to $10,000 under its building decarbonization program, or up to $5,000 if the boiler stays as backup. NJ Whole Home Energy Solutions pays $2,000 to $7,500, and JCP&L pays $500 to $1,000 for qualifying heat pumps. The federal 25C credit expired at the end of 2025.
Price the Switch Before the Next Delivery
At today's prices, the heat pump vs oil heat math is lopsided. Total last winter's gallons and apply the figures above to see what a Hyper Heat system could save you.
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 heat pumps across Passaic, Bergen, Essex, and Morris counties, with upfront pricing and rebate paperwork handled for you.
Call (973) 754-1232 to schedule a free in-home estimate. We will size the system and show you the rebate math for your utility, so you can see whether switching makes sense for your house.