The Consistory Court of the Diocese of Newcastle said the Holy Cross church in Fenham, in the city's West End, was "embarrassing" over the eco-fracas - with the CofE pushing for net zero carbon emissions by 2030.
Back in February, Holy Cross's governing committee made the move to swap out their old gas heating system for a new one worth some £33,000 - which the Consistory Court heard would be "more cost-effective [and] modern".
The small church then put down a £17,000 deposit on the heaters - before applying for the diocese's permission - which the court's chancellor Judge Simon Wood said shouldn't have happened.
Wood said Holy Cross had failed "to consider Net Zero" - and should have installed electric heaters worth between £59,000 and £86,000 instead.
The judge later admitted the heating system chosen "appears to be the only realistic one" - though has ordered Holy Cross to enter into a "carbon offsetting scheme" to make it comply with Net Zero.
"This has been an embarrassing episode in the governance of Holy Cross which it is hoped will not be repeated," he said.
But several high-profile Anglicans have lashed out at the controversy, speaking to The Telegraph.
The Rev Dr Ian Paul, a member of both the General Synod and the Archbishops’ Council, told the newspaper that the case "illustrates the real problem of virtue-signalling by those who are far removed from the realities of parish life.
"The comments of the judge show a complete failure to understand the challenges of ministry in local churches on the ground - and it also points to the failure of General Synod to properly think through the consequences of their motion on Net Zero.
"The biggest challenge to the environment comes from the growth in China's use of energy - and our purchase of Chinese goods - and not what one parish had done to maintain its weekly worship in its historic building!"
While the Rev Daniel French, the vicar of Salcombe in Devon, and co-host of Christian podcast Irreverend, said: "Non-adherence to the 2030 Net Zero target is in danger of becoming the new unpardonable sin against the Holy Ghost.
"As a vicar, this case says everything about the widening gulf between the heavy-handed green idealism of church bureaucracy and the reality of parish life on the ground.
"Most congregations really want to try to do their best for the environment but have to weigh this up against the daunting practicalities of running large, ancient buildings on terrifyingly tight budgets.
"If this sort of judgment becomes the norm, many of the hard-working volunteers who keep our parishes going will throw their hands up and walk. There has to be a better way forward."
A Church of England spokesman did not comment on the ruling, but said more generally: "The Net Zero programme is making funding available through dioceses to support parishes, including specialist advice and grant schemes, in their work to cut carbon emissions.
"In many cases this work is helping parishes save thousands of pounds in energy bills, therefore helping them to remain viable over the long term."