Five policies to lower heating bills and accelerate heat pump adoption in Illinois

RMI proposes five policies to accelerate heat pump adoption in Illinois: increasing incentives for heat pumps and weatherization while phasing out gas equipment subsidies, providing 0% financing, reforming electric and gas rate designs, implementing an AC-to-heat pump replacement policy, and adopting electric-friendly standards for new construction. The brief notes that while heat pumps can reduce energy bills for most Illinois households—particularly those using propane or electric resistance heat—high up-front costs remain a primary barrier.

• Air-source heat pumps (ASHPs) can lower energy bills for nearly all Illinois households, with the most significant annual savings occurring for those switching from electric resistance ($1,110) and propane ($930) furnaces.
• For gas-heated homes, the most cost-effective ASHP design depends on the utility provider; Peoples Gas and ComEd customers save an average of $390 per year with all-electric full-load ASHPs, while Nicor Gas customers save marginally ($20) with hybrid part-load ASHPs.
• High up-front costs are a major barrier to adoption, with full-load cold climate heat pumps estimated to cost between $2,000 and $8,000 more than a combined furnace and AC replacement.
• Weatherization can reduce the cost of heat pump installations by allowing for smaller equipment; for example, downsizing an ASHP from four tons to three tons due to weatherization can lower up-front costs by approximately $1,100.
• Zero-interest financing could make heat pumps more affordable from the start; an ASHP financed at 0% would result in annual combined equipment and energy costs approximately $800 lower than a market-rate financed propane or electric resistance furnace and AC.
• Current gas rate designs in Illinois, which feature some of the highest residential fixed charges in the U.S., limit the ability of customers to save money through efficiency improvements or partial electrification.
• Implementing electric-ready construction standards for new buildings can save approximately $1,200 per home compared to post-construction upgrades, while all-electric construction can save between $1,800 and $10,000 in up-front gas service costs.

APA

RMI (2026). Five policies to lower heating bills and accelerate heat pump adoption in Illinois. https://rmi.org/resources/five-policies-to-lower-heating-bills-and-accelerate-heat-pump-adoption-in-illinois/

Chicago

RMI. Five policies to lower heating bills and accelerate heat pump adoption in Illinois. 2026. https://rmi.org/resources/five-policies-to-lower-heating-bills-and-accelerate-heat-pump-adoption-in-illinois/.

Wikipedia

{{cite report |author=RMI |title=Five policies to lower heating bills and accelerate heat pump adoption in Illinois |date=20 March 2026 |url=https://rmi.org/resources/five-policies-to-lower-heating-bills-and-accelerate-heat-pump-adoption-in-illinois/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2026five, author = {{RMI}}, title = {{Five policies to lower heating bills and accelerate heat pump adoption in Illinois}}, institution = {RMI}, year = {2026}, month = mar, url = {https://rmi.org/resources/five-policies-to-lower-heating-bills-and-accelerate-heat-pump-adoption-in-illinois/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }