Heat Pump & Hybrid Heating Rebates for New Jersey Natural Gas Customers | Building Decarbonization – Hybrid Heating Program
If you heat your home with natural gas, you may be feeling torn.
Your system still works — but it’s aging.
Your air conditioner struggles on hot days.
You’ve heard about heat pumps, but you’re not sure they make sense for your home — or whether you’re ready to give up gas entirely.
You’re not alone.
Many New Jersey Natural Gas customers want a practical next step — something that improves comfort and efficiency without forcing an all-or-nothing decision.
That’s exactly what NJNG’s Hybrid Heating program is designed to support.
It allows homeowners to add a high-efficiency electric heat pump alongside an existing gas system, access meaningful rebates and financing, and upgrade their home in stages, based on what actually makes sense.
The key is understanding your home, your options, and the right sequence to follow — which is why every project starts with a Home Energy Audit.
NJNG Hybrid Heating Incentives (At a Glance)
New Jersey Natural Gas Building Decarbonization Hybrid Heating Rebates and Financing
Add a heat pump while keeping your existing gas system
Primary incentives include:
• Up to $2,000 for the first qualifying heat pump
• Up to $3,000 for income-eligible households
• Additional incentives for secondary systems and multi-zone configurations
• Separate incentive tiers for standard ASHP vs. cold-climate ASHP (ccASHP)
• On-Bill Repayment financing (OBRP) available for qualifying projects
Incentive amounts depend on:
• Equipment efficiency tier
• Whether the system is the first or an additional heat pump
• Household income eligibility
• Compliance with NJNG sizing and installation requirements
How NJNG Incentives Are Structured
First Heat Pump Installed
The largest incentive is typically applied to the first qualifying heat pump installed at the home.
This is most often:
• A ducted or ductless heat pump added to supplement an existing furnace
• Sized to the home’s cooling load
• Installed with integrated controls to coordinate with the gas system
Additional Heat Pump Systems
NJNG also provides additional incentives for:
• Multi-zone homes
• Homes installing more than one heat pump
• Homes addressing comfort issues in specific areas
These incentives are smaller than the first-system incentive but allow homeowners to expand electrification over time.
Financing Through NJNG (OBRP)
NJNG offers On-Bill Repayment Program (OBRP) financing to help spread project costs over time.
• 0% interest financing
• Paid through your utility bill
• Available to qualified borrowers
• Can be used for heat pumps and qualifying electrical upgrades
Financing availability and limits depend on the project scope and program rules.
Why NJNG Focuses on Hybrid Heating
NJNG’s program is intentionally designed around hybrid systems because many homes in its service territory:
• Have existing gas infrastructure
• Are older or more compartmentalized
• Benefit from backup heat during extreme cold
• Are best served by a gradual transition
Hybrid Heating allows homeowners to:
• Improve efficiency compared to combustion-only systems
• Maintain reliability
• Upgrade in phases
• Take advantage of incentives without committing to full electrification immediately
NJNG vs. PSE&G — What’s the Difference?
New Jersey Natural Gas (NJNG)
• Focuses on Hybrid Heating
• Incentives are equipment-specific and tiered
• Emphasizes integrated controls
• Encourages phased electrification
• Strong support for ductless and multi-zone systems
PSE&G
• Offers multiple pathways including Clean Heat (full displacement)
• Higher incentives for cold-climate heat pumps as primary heat
• Broader eligibility for full electrification projects
• Larger maximum rebates for whole-system replacements
Neither program is “better” — they’re designed for different housing stock and homeowner goals.
Why We Start with a Home Energy Audit
A Home Energy Audit helps determine:
• Whether NJNG Hybrid Heating is the right fit
• Which heat pump type qualifies for the best incentives
• How many systems make sense
• What electrical upgrades are required
• How to sequence improvements over time
It ensures your project:
• Meets program requirements
• Performs as intended
• Qualifies for the maximum incentives available
How Ciel Power Fits Into the Process
Ciel Power is an independent home performance contractor that helps New Jersey homeowners navigate utility incentive programs and design upgrades that actually work for their homes.
We are not a utility, and we don’t set program rules. Instead, our role is to:
• Perform Home Energy Audits that establish eligibility and identify the right upgrade pathways
• Model and evaluate homes using utility-approved tools
• Design heat pump, hybrid heating, and home performance projects that meet program requirements
• Coordinate rebates, incentive paperwork, and financing on the homeowner’s behalf
• Manage installation and testing through qualified trades
Because Building Decarbonization and Whole Home Energy Solutions programs can overlap, sequencing matters. Our job is to help homeowners combine programs where appropriate, avoid common missteps, and plan upgrades in a logical order.
This is why every project begins with a Home Energy Audit — it creates a single point of truth that both the homeowner and the utility programs rely on.
