Heat pump payback ranges from 2 years in Rhode Island (thanks to $11,500 in rebates) to 8+ years in Pennsylvania. This state-by-state breakdown shows exact costs, incentives, and timelines.
Home Electrification Experts — Full-Service Design to Install, 9 States
New Jersey Heat Pump ROI at a Glance
Net Cost
$5,500
After $7,500 rebate
Annual Savings
$1,550
vs oil heating
Payback
3.5 years
break-even
10-Year Savings
$10,000
cumulative net
Full Cost Breakdown
| Item | Amount |
|---|---|
| Installed cost (whole-home cold-climate system) | $13,000 |
| NJ Whole Home rebate | -$7,500 |
| Net cost | $5,500 |
Annual Savings Calculation
| Metric | Oil Heating | Heat Pump |
|---|---|---|
| Fuel price | $3.70/gal | $0.26/kWh |
| Annual cost | $2,200 | $650 |
| Annual savings | $1,550/year |
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Cumulative Savings Timeline
| Year | Cumulative Savings | Net Position |
|---|---|---|
| Year 1 | $1,550 | $-3,950 |
| Year 2 | $3,100 | $-2,400 |
| Year 3 | $4,650 | $-850 |
| Year 5 | $7,750 | +$2,250 |
| Year 7 | $10,850 | +$5,350 |
| Year 10 | $15,500 | +$10,000 |
| Year 15 | $23,250 | +$17,750 |
Assumptions and Methodology
- Installation cost: typical 2.5-3 ton whole-home cold-climate system
- Oil prices: current EIA residential heating oil data for New Jersey
- Electricity rates: current EIA residential rate for New Jersey
- Heat pump COP: average 3.0 across heating season
- Oil consumption: 800 gallons/year for typical 2,000 sqft home
- Does not account for fuel price escalation (which typically favors heat pumps)
Heat Pump ROI in Other States
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Heat Pump Tax Credits in 2026: What Changed After 2025
There is no federal tax credit for homeowner heat pump purchases in 2026. Section 25D expired December 31, 2025. State incentive programs remain your primary source of savings.
Heat Pump Rebates 2026: Step-by-Step Claim Guide
Heat pump rebates range from $450 in Pennsylvania to $11,500 in Rhode Island. This guide covers the exact steps to claim your rebate in each state.
Oil-to-Heat-Pump Break-Even Calculator (Updated with EIA Data)
At current fuel prices, switching from oil to a heat pump saves $1,500-$2,600 per year in New England. Break-even ranges from 2-5 years after state rebates, depending on your oil consumption and electricity rate.