Illinois Heat Pump Leasing & Installation Guide
In this guide
Illinois homeowners face distinct seasonal challenges—from humid summers to frigid winters. Heat pumps offer an energy-efficient solution that both heats and cools your home year-round, adapting to the state’s diverse climate. As energy costs rise and efficiency matters more than ever, Palmetto helps Illinois residents navigate heat pump installation with expert guidance, quality equipment, and local know-how you can trust.
01
Benefits of Palmetto Heat Pumps
Say goodbye to clunky old systems and surprise repairs. Palmetto Comfort Plan gives you a brand-new heat pump, installation, and full support, all wrapped into one subscription.
Year Round Comfort
A high-efficiency heat pump keeps your home cool in summer, warm in winter, and your energy use in check all year long.
Forget the maintenance
With a Comfort Plan subscription, installation and maintenance are fully covered, no surprise bills, no weekend DIY.
Rewards for renewing
Stick with us and earn credits toward your next system upgrade. It’s our way of saying thanks for building a cleaner, comfier future with us.
02
Buy it or finance it. Your comfort, your call
There’s no wrong way to get cozy. Here’s how the options stack up, so you can choose what works best for you.
|
|
Cash |
Loan |
|
|---|---|---|---|
| Payment schedule | $0 upfront, then monthly subscription | Full price upfront | $0 upfront, then monthly payment |
| Term length | 10 or 12 years | None | Variable |
| End of term options | Flexible with 25% renewal term credits to new system | No credits to new system | No credits to new system |
| Maintenance included | |||
| Eligible for incentives |
Cash
Loan
03
Heat Pump Financing in Illinois
Illinois does not currently have active state-level heat pump rebate programs available in 2026. The federal IRA tax credit for heat pumps expired on December 31, 2025. However, some Illinois utilities may offer local rebates for heat pump installations. Homeowners should contact their electric utility directly to inquire about any available programs. Palmetto’s Comfort Plan lease offers an alternative path to heat pump installation with $0 upfront cost, allowing homeowners to benefit from heat pump technology without waiting for rebate programs or managing tax credits.
Federal IRA Tax Credit
Expired (was up to $2,000)The Inflation Reduction Act provided a federal tax credit of up to $2,000 for qualifying heat pump installations. NOTE: This credit expired December 31, 2025 and is no longer available for 2026 installations.
Palmetto Comfort Plan: $0 Upfront Heat Pump Leasing
Even without local rebates, Palmetto’s Comfort Plan makes upgrading easy. You get a high-efficiency heat pump installed with $0 upfront cost, predictable monthly payments, and all maintenance and repairs included for the life of the plan.
Incentive information is based on publicly available data as of 2026 and may change. Contact program administrators to verify current availability and eligibility requirements. Illinois state-level HOMES and HEAR rebate programs are under development but not yet operational as of February 2026.
Illinois Electricity Prices
Understanding electricity costs in Illinois helps you make smarter decisions about home heating and cooling—and potentially save thousands over time.
Illinois electricity rates jumped 20% from 2021 to 2024, rising from 13.2 to 15.9 cents per kWh. While rates have stayed slightly below the national average, they’ve climbed steadily, impacting household budgets statewide.
Heat pumps offer a practical response to rising rates. Because they’re 2-3 times more efficient than traditional HVAC systems, they use significantly less electricity to deliver the same heating and cooling—reducing your consumption even as prices increase.
As electricity costs continue their upward trend, efficiency becomes increasingly valuable. A heat pump’s lower energy consumption means your monthly bills stay manageable today while protecting your budget against future rate increases for years to come.
Price of Energy: Illinois vs National Average
Illinois Utility Providers
Illinois residents have access to several electricity providers with varying rates. According to 2023 data, costs ranged from 5.54¢ to 17.04¢ per kWh—well below to slightly above the national average of 16.0¢ per kWh.
Traditional utilities like Commonwealth Edison and Ameren Illinois maintain rates near state and national averages due to infrastructure costs and regulated pricing. Meanwhile, competitive retail suppliers often offer lower rates through market competition and flexible purchasing strategies.
Heat pumps can help you maximize savings regardless of your provider’s rates. Their exceptional efficiency means they use less electricity than traditional heating and cooling systems, reducing your total energy costs even in higher-rate service areas.
Illinois Utilities Electricity Rates
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Illinois Heat Pump City Guides
Explore detailed heat pump installation guides for cities across Illinois. Each guide includes local utility rates, incentives, and climate-specific recommendations.
Frequently Asked Questions
Yes, heat pumps work well in Illinois, including during cold winters. Modern cold-climate heat pumps efficiently heat homes even when temperatures drop below freezing, which makes them suitable for Illinois’ climate. They also provide cooling in summer, replacing both your furnace and air conditioner with one efficient system.
With electricity costs at 15.9¢ per kWh in Illinois, heat pumps offer an energy-efficient heating and cooling solution. Palmetto makes installation accessible through two options: a Comfort Plan with $0 upfront and maintenance included, or direct purchase where you may qualify for up to $2,000 in federal tax credits under the Inflation Reduction Act.
Heat pump installation costs in Illinois typically range from $5,000 to $20,000 depending on the system size, equipment type, and installation complexity. Factors like your home’s square footage, existing ductwork, and whether you choose a ducted or ductless system all influence the final price.
Palmetto offers two flexible ways to get a heat pump: a Comfort Plan with $0 upfront and predictable monthly payments that include all maintenance and repairs, or direct purchase where you own the equipment outright and may qualify for up to $2,000 in federal tax credits under the Inflation Reduction Act plus local Illinois rebates.
Top heat pump brands for Illinois homeowners include Carrier, Trane, Lennox, Mitsubishi, and Daikin. These manufacturers produce cold-climate models that perform efficiently in Illinois winters, maintaining heating capacity even when temperatures drop below freezing. Look for units with a HSPF2 rating of 8.0 or higher for optimal performance.
When selecting a brand, consider both the equipment quality and your installation option. Palmetto offers these trusted brands through either a Comfort Plan lease with $0 upfront and all maintenance included, or direct purchase where you own the system outright and may qualify for up to $2,000 in federal tax credits under the Inflation Reduction Act.
Yes, Illinois homeowners can access heat pump rebates through several programs. If you purchase a heat pump directly, you may qualify for a federal tax credit of up to $2,000 under the Inflation Reduction Act. Additionally, some Illinois utility companies offer local rebates and incentives for energy-efficient heat pump installations, which can further reduce your upfront costs.
The availability and amount of rebates vary by location and utility provider within Illinois. When you purchase a heat pump outright, you can take advantage of these incentives and own the equipment. Alternatively, Palmetto’s Comfort Plan offers $0 upfront cost with a predictable monthly payment, eliminating the need to navigate rebate applications while still providing an affordable path to home comfort.
The decision between leasing and buying a heat pump in Illinois depends on your financial situation and priorities. Buying means paying upfront but owning the equipment outright, with potential access to federal tax credits up to $2,000 under the Inflation Reduction Act. Leasing through a plan like Palmetto’s Comfort Plan requires $0 upfront and includes all maintenance and repairs with a predictable monthly payment.
Consider leasing if you prefer avoiding large upfront costs and want maintenance handled for you throughout the system’s life. Consider buying if you can manage the initial investment and want to maximize long-term savings through tax credits and eventual ownership. Both options can help you reduce heating and cooling costs compared to traditional systems, especially with Illinois electricity rates at 15.9¢ per kWh.
Yes, heat pumps can be worth it financially in Illinois. Modern heat pumps operate efficiently even in cold climates, and with electricity at 15.9¢ per kWh, they typically cost less to run than traditional heating systems. Direct purchases may qualify for up to $2,000 in federal tax credits under the Inflation Reduction Act, plus potential local rebates that improve your return on investment.
Palmetto makes heat pumps accessible through two options: a Comfort Plan with $0 upfront and all maintenance included, or direct purchase for homeowners who want to own their equipment outright. Both paths offer long-term savings on energy bills while improving home comfort. The right choice depends on whether you prefer predictable monthly payments or maximizing available incentives through ownership.
The right heat pump size for your Illinois home depends on several factors: your home’s square footage, insulation quality, ceiling height, window efficiency, and local climate conditions. Most Illinois homes need a system ranging from 2 to 5 tons, with each ton covering roughly 400-600 square feet in well-insulated homes. A professional energy assessment is essential to determine the correct size.
An oversized heat pump will cycle on and off too frequently, wasting energy and increasing your costs at Illinois’s current 15.9¢ per kWh electricity rate. An undersized system will struggle during cold Illinois winters and hot summers. Palmetto provides expert sizing assessments as part of both our Comfort Plan and direct purchase options, ensuring your system is properly matched to your home’s specific heating and cooling needs.