Report: New Jersey gas customers can save up to thousands of dollars annually by weatherizing, converting to electric appliances like heat pumps

Acadia Center Report finds that some residents who upgrade to electric appliances can save up to 69% on energy bills when paired with weatherization, find relief from volatile fossil fuel prices

TRENTON, NJ, June 22, 2023 — New Jerseyans in an average insulated gas-heated home can save anywhere from 4% to 41% on their annual energy bills by adopting highly efficient electric appliances such as heat pumps depending on utility service territory, and up to 69% in a typical drafty home if paired with weatherization, according to a new report out today by Acadia Center.

Based on winter 2022-2023 utility rates, Acadia Center analysts found that New Jerseyans who live in poorly insulated gas homes can save $1,550 to $3,240 each year, a range of 47% to 69% savings on annual energy bills depending on service territory, by investing in electrification and weatherization.

“This report makes clear that switching from fossil fuels can save New Jerseyans money,” said Ben Butterworth, Director of Climate, Energy & Equity Analysis at Acadia Center. “With volatile natural gas prices driving energy bill spikes, it’s vital New Jerseyans understand they can save money by upgrading their homes to utilize clean electric appliances like heat pumps. For many customers, this can free up thousands of dollars each year to spend on groceries, prescriptions, childcare, and other daily necessities.”

This report, “The Future is Electric: How the Average New Jersey Household Can Save by Electrifying,” updates a 2022 analysis that calculated savings using low gas rates from winter 2021-2022, which demonstrated that the average household in New Jersey would see annual bill savings of about 20% by pairing electrification with weatherization. The 2022 report demonstrated that those savings jump to more than 50% for a typical drafty home electrifying and improving weatherization. Because utility gas rates for New Jersey households increased 51% on average in the past two years, even more dramatic savings are now available for gas customers who adopt weatherization and highly efficient all-electric alternatives like heat pumps.

Swapping fossil fuel burning appliances with electric alternatives would also eliminate a significant source of indoor and outdoor air pollution, the impacts of which are disproportionately borne by low-income households and communities of color. Gas appliances emit harmful pollutants such nitrogen dioxide (NO2) that can exacerbate respiratory illnesses when burned indoors. Children are particularly at risk, as children who live in homes with gas stoves have a 42% higher risk of developing asthma symptoms and a peer-reviewed study found that nationwide, gas stove use can be attributed to 12.7% of childhood asthma cases.

“Electrifying and weatherizing low-income homes can deliver equitable economic benefits and close health disparities for millions of Black and brown New Jerseyans who are more likely to be exposed to air pollution from our buildings, heavy industry and transportation emissions,” said Nicole Miller, Vice Chair of the New Jersey Progressive Equitable Energy Coalition. “These families should not be overlooked or left behind. New Jersey leaders must create pathways to increase affordability and ensure those vulnerable households who can benefit most from all-electric, comfortable homes are the first in line.”

Thanks to the passage of the Inflation Reduction Act, New Jersey residents will soon be able to take advantage of rebates and incentives to lower the upfront cost of weatherization and highly efficient electric appliances such as heat pumps, including up to $1,600 for weatherization and up to $8,000for air-source heat pumps. While New Jersey offers anywhere from $390 to $1,000 for cold climate heat pumps depending on utility service territory, more needs to be done to increase access to programs to help low- and moderate-income households weatherize their homes and adopt highly efficient electric alternatives.

“New Jersey has ambitious goals to deliver the economic, health, and climate benefits of all-electric homes but no programs to achieve those goals,” said Barbara Blumenthal, Research Director at the New Jersey Conservation Foundation. “This report shows that the longer state regulators at the Board of Public Utilities and legislative leaders delay in creating programs to accelerate the adoption of highly efficient electric appliances like heat pumps, the more it will cost New Jersey gas customers stuck with higher bills and less comfortable homes,” she concluded.

In New Jersey, 73% of homes rely on natural gas for heating. Governor Phil Murphy has set ambitious goals to deploy heat pumps in 400,000 New Jersey homes and 20,000 commercial properties by 2030. Rapidly transitioning New Jersey’s homes and buildings, which make up 26% of the state’s total emissions, is essential to meeting the state’s goal to reduce emissions 80% by 2050.