Illinois heat pump incentives: 2024 guide

Ready to swap your furnace and AC for an all-in-one heat pump? Most Illinois homeowners should qualify for at least a few thousand dollars in savings on these energy-efficient, all-electric, extra-comfortable home heating and cooling systems—including the newest models that can handle the coldest days that Like Michigan has in store.

Like all American taxpayers, residents of Illinois are eligible for all of the heat pump incentives available through the Inflation Reduction Act of 2022 (IRA). We've covered those benefits in detail here, but in summary:

• Any household can claim a $2,000 federal tax credit (or 30% of the price, whichever is less) against the cost to install an air-source heat pump that meets modest efficiency requirements. Since it’s a tax credit, rather than a direct rebate, you’re only eligible for as much free money as you’re on the hook to pay the IRS per year. You can claim the rebate with tax form 5695, the same one you'd use for solar panels.

• Income-dependent rebates of up to $8,000 are coming…eventually. The Illinois Environmental Protection Agency hasn’t announced when they’ll be available yet. As of late February 2024, Illinois has yet to file their application for the funding, according to the US Department of Energy. If you’re counting on those rebates, you’ll need to wait until the program is in place, because the rebates will not apply retroactively to any system that was installed before the program's start date. If you absolutely need a heat pump in the meantime, just go ahead and get one, because it’ll be difficult to claim this rebate anyway. If every application received the full $8,000 rebate, there’s only enough funding for 33,000 out of the 4.8 million households in Illinois.

The Illinois state government doesn’t currently offer any incentives for installing heat pumps. Some local governments (including Chicago) are offering grants for heat pump conversions, though typically to limited numbers of low-income households. 

But the most likely place you’ll find free money for a heat pump is through your utility company. Most of the electric companies in Illinois offer modest rebates or discounts for air source heat pumps.

ComEd (Commonwealth Edison), the major electric utility in Chicagoland and most of northern Illinois, offers a $1,400 discount for a ducted heat pump, and a $1,000 discount for ductless mini splits or mixed ducted-ductless systems. To be eligible, the heat pump will need to meet some efficiency requirements (the standards are much more stringent for ductless systems), and the system will need to be installed by a ComEd heat-pump trained contractor. They’ll apply the discount at the point of sale—no paperwork required, no waiting around for rebate checks to arrive. More on ComEd’s rebates here.

Ameren Illinois, which serves most of the rest of the state, offers $700 for both ducted and ductless heat pumps that meet modest efficiency requirements (up to two per account). The discounts happen at the distributor level—as a homeowner, you won’t need to fill out any paperwork. You’re also not even required to use an approved contractor to claim the discount. That said, Ameren has a database of preferred pros who are more likely to understand the details of the discount program. 

Many of the other electric utilities in Illinois offer similar rebates as well, including MidAmerican, EnerStar, Corn Belt, and MJM.

When you sign up for the EnergySage Marketplace, you’ll get an instant estimate of how much it might cost to install a heat pump in your home, based on real-world quotes for similar homes from vetted installers. You can schedule consultations with seasoned pros. If you want some independent guidance, one of our Energy Advisors can help you through the process. We’re already the country’s largest marketplace for solar energy, and now we’ve brought that clean-energy experience to heat pump shopping. Learn more here.

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