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This policy brief by RMI outlines five strategic policies to increase the adoption of air-source heat pumps (ASHPs) and heat pump water heaters (HPWHs) in Illinois to lower household energy bills and meet state decarbonization goals. The document analyzes the techno-economic viability of electrification for single-family homes, highlighting that while heat pumps can reduce operational costs—particularly for those switching from propane or electric resistance heating—high up-front cost premiums remain a primary barrier. RMI recommends a combination of increased targeted incentives, zero-interest financing, rate design reforms, AC-to-heat pump replacement policies, and electric-friendly building standards for new construction.

This guide provides implementation recommendations for state energy offices (SEOs) to design and deploy the Home Electrification Rebate program, a $4.5 billion initiative established by the Inflation Reduction Act (IRA) to support residential electrification for low- and moderate-income households.