Illinois heat pump incentives: How to earn lucrative utility rebates in 2025

Ready to swap your furnace and AC for an all-in-one heating and cooling system? Illinois homeowners can save thousands by switching to energy-efficient, all-electric heat pumps—and if you install yours this year, you could save an extra $2,000.

Modern heat pumps are built to handle Illinois winters. They heat and cool your home, potentially replacing both your furnace and air conditioner with a single system that reduces monthly energy costs while providing more consistent comfort. Heat pumps are more energy-efficient than traditional heating systems. When you pair a heat pump with solar panels, you can run your heating and cooling on free electricity from your roof.

Recent federal policy changes moved up the end date for heat pump tax credits. The Energy Efficient Home Improvement Credit (25C), once expected to last into the 2030s, now expires after December 31, 2025.

That makes 2025 the best time to act. Install your system before the end of this year, and you can still claim up to $2,000 in federal tax credits—on top of long-term energy savings.

Plus, most Illinois homeowners can stack federal credits with utility rebates for even bigger savings. We’ll break down the incentives available now and how they can maximize your savings.

Illinois residents can claim federal heat pump incentives through two main tax credit programs. While these credits have accelerated deadlines due to the One Big Beautiful Bill Act (OBBBA) signed in July 2025, heat pumps remain a valuable investment for their energy efficiency and long-term savings even after federal incentives expire.

Air source heat pumps: Energy Efficient Home Improvement Credit (25C)

This credit covers residential air-source heat pumps that meet the efficiency requirements. 

• Deadline: Your heat pump must be installed and placed in service by December 31, 2025.

• Credit amount: 30% of installation costs, capped at $2,000.

Geothermal heat pumps: Residential Clean Energy Credit (25D)

This credit applies to geothermal heat pump systems and other renewable energy installations, like home solar panel systems:

• Deadline: System must be placed in service by December 31, 2025 for full credit rates.

• Credit amount: 30% of total system cost with no cap.

Home Energy Rebates Program

The Illinois Environmental Protection Agency is working on income-dependent rebates of up to $8,000 through federal funding, but several factors make these uncertain:

• No solid timeline: A pilot program is expected to launch late 2025/early 2026, given all necessary approvals have been received from the U.S. Department of Energy. 

• Limited funding: Funding constraints mean not all interested homeowners will receive rebates. 

• No retroactive benefits: The rebates won't apply to systems installed before the program launches. 

• Complex application process: These rebates are expected to have strict income requirements and a lengthy approval process—which means you may not even qualify. 

If you need a heat pump now, don't wait for future rebates. The savings available today through federal tax credits and utility programs provide plenty of value.

While the state of Illinois doesn't currently offer direct heat pump incentives, most electric utility companies provide solid rebates that can be claimed right at the point of sale. Contact your local utility directly to learn about specific rebate amounts and eligibility requirements in your area.

ComEd (Commonwealth Edison)

• $1,400 discount for ducted heat pump systems.

• $1,000 discount for ductless mini-splits or mixed systems.

• Point-of-sale savings: Discount applied at point of sale—no waiting for rebate checks.

• Requirements: System must meet efficiency standards (the standards are much more stringent for ductless systems) and be installed by a ComEd heat-pump trained contractor.

Ameren Illinois

• $900 rebate for ducted heat pumps.

• $630 rebate for ductless mini split.

• Up to two systems per account can qualify.

• Flexible contractor requirements: You're not required to use an approved contractor, though Ameren maintains a database of preferred installers.

Other Illinois utilities with heat pump programs

• MidAmerican: Discounts worth up to $600 in discounts per unit.

• EnerStar: Rebate worth up to $1,800.

• Corn Belt: Rebate worth up to $1,800.

• MJM: Rebate worth up to $1,800.

One of the biggest advantages of Illinois heat pump incentives is that you can stack them. In addition to the upfront savings, your system will continue to save money on energy bills for years to come. Even without the federal tax credit after 2025, combining energy efficiency improvements and utility rebates makes heat pumps a smart investment.