The building sector contributes about 40% of the global energy consumption. The primary energy consumers in the building sector are HVAC. Recently, Air-Source Heat Pumps (ASHPs) have been growing in demand and popularity towards electrifying and reducing the carbon footprint in North American residential heating. However, to operate efficiently, these technologies are limited to homes with peak heating capacities of around 60 MBH (17.6 kW) - limiting to new-builds and mild-climate retrofits in the U.S. This approach is cost prohibitive and can potentially lead to high CO2 emissions when operating with electric backup. The hybrid heating system, a dual-fuel heating approach, is a promising path to transition to zero emission. The hybrid heating system approach integrates a fuel-fired furnace with an electric-driven ASHP controlled by smart thermostats. Despite the availability of hybrid heating systems and components in North America, this technology is under-utilized, with limited control capability and performance. This study highlights the potential benefit of a hybrid heating system for minimizing operating costs and CO2 emissions for residential homes in International Energy Conservation Code (IECC) Climate zones 4C and 5A.