Short answer
Peoples Gas pays $150 for a power-vented tankless heater of 0.95 UEF or better, but only when it replaces a standard atmospheric gas tank. ComEd pays $750 for an ENERGY STAR heat pump water heater bought from a retailer July 1 to December 31, 2026. A plain tank-for-tank swap gets no Peoples Gas rebate.
Key facts
- Peoples Gas pays $150 for a power-vented tankless water heater of 0.95 UEF or higher, and $150 for an indirect water heater paired with a condensing, modulating boiler of 88% AFUE or higher, in 2026.[1]
- The Peoples Gas water heater rebate requires that the heater being replaced be a standard-efficiency, standalone, atmospherically vented gas storage tank.[1]
- ComEd pays $750 for an ENERGY STAR heat pump water heater purchased July 1 to December 31, 2026, and purchases made through contractors are not eligible.[2]
- Nicor Gas's 2026 fact sheet lists a $150 water heater rebate for an ENERGY STAR tankless unit of UEF .95 or higher or a tank of UEF .86 or higher, limit one rebate per account.[3]
Which utility's rebate applies to a Chicago home?
Rebates come from the company that delivers your energy, so start with your bills.
- Gas: Peoples Gas delivers natural gas to more than 898,000 customers in the city of Chicago[4]. Its 2026 rebate program serves Peoples Gas customers in the city and North Shore Gas customers[1]. Homes served by Nicor Gas use Nicor's program instead[3].
- Electric: if ComEd delivers your electricity (check the bill), its appliance rebate covers heat pump water heaters[2].
What does each program pay in 2026?
| Program | Heater | Rebate | Key conditions |
|---|---|---|---|
| Peoples Gas / North Shore Gas | Tankless, power vented, 0.95 UEF or higher | $150 | Must replace a standard-efficiency, standalone, atmospherically vented gas tank; installed January 1 to December 31, 2026[1] |
| Peoples Gas / North Shore Gas | Indirect water heater paired with a condensing, modulating boiler of 88% AFUE or higher | $150 | Same replacement rule[1] |
| Peoples Gas / North Shore Gas | Boiler with integrated domestic hot water (two-in-one) | $400 at 90% AFUE or higher; $500 at 95% or higher | Must replace both an existing gas tank water heater and an existing gas space heating boiler[1] |
| ComEd | ENERGY STAR heat pump water heater | $750 | Purchased July 1 to December 31, 2026, directly from a retailer; installed at your ComEd residential service address; higher amounts for income-eligible customers[2] |
| Nicor Gas | ENERGY STAR tankless (UEF .95 or higher) or tank (UEF .86 or higher) | $150 | January 1 to December 31, 2026; limit one rebate per account[3] |
Amounts are as of October 2026. There is no federal 25C tax credit to add on top: the IRS says it does not apply to property placed in service after December 31, 2025[5]. Programs can change during the year, so read the current form before you buy.
Why most Chicago tank swaps get nothing
The Peoples Gas rule is strict. The new heater has to be tankless or indirect, and the old heater has to be a standard-efficiency, standalone, atmospherically vented gas tank[1]. A new standard gas tank replacing an old standard gas tank does not qualify, however efficient the new tank is. That differs from the Nicor Gas program in the suburbs, whose 2026 fact sheet lists a $150 rebate that covers a qualifying ENERGY STAR tank as well as tankless[3].
The ComEd contractor catch
ComEd's $750 heat pump rebate has a rule many buyers miss: purchases must be made directly through a retailer, and purchases made through contractors are not eligible[2]. If you want the rebate, buy the unit yourself from a retailer, keep the receipt, and then hire an independent licensed plumber to install it. Apply within 60 days of purchase or by February 28, 2027, whichever comes first[2]. ComEd says higher amounts are available to income-eligible customers and lists 855-530-5783 for details[2].
How do you claim the Peoples Gas rebate?
The 2026 application asks for[1]:
- your most recent natural gas bill, with an active Service Classification 1 account (the classification is printed at the top of the bill),
- an itemized invoice showing the contractor's name, address and phone, the install date, the manufacturer, model and price,
- the AHRI certificate for the model, from ahridirectory.org.
Applications must arrive within 30 days of installation or by December 31, 2026, whichever comes first[1]. The form lets a contractor take the rebate as a deduction on your invoice, and lets a building owner receive it when a tenant holds the gas account[1]. The program's phone line is 855-849-8928[1].
A venting note for older Chicago homes
In some homes a gas water heater and furnace vent through the same chimney. The Peoples Gas program says that when a high-efficiency furnace replaces atmospheric equipment that shared a flue with a gas water heater, a chimney liner must be installed[1]. If you are replacing the furnace and keeping a standard tank, ask the contractor how the water heater will vent afterward. That is licensed work, not a DIY step.
When to call a pro
- You want the Peoples Gas tankless rebate: a licensed plumber can confirm your old tank qualifies and size the gas line and venting.
- You bought a heat pump water heater from a retailer for the ComEd rebate: hire an independent licensed plumber, and a licensed electrician if a new circuit is needed.
- You are replacing a furnace or boiler that shares a chimney with the water heater: the venting must be checked by a licensed professional.
More questions
Can I stack the Peoples Gas tankless rebate with the ComEd heat pump rebate?
Not on one heater. The Peoples Gas rebate is for a gas tankless or indirect unit, and the ComEd rebate is for an electric heat pump unit. They reward opposite choices, so pick the heater first, then the rebate that fits it.
I live in Chicago. Does the Nicor Gas rebate apply to me?
Only if Nicor Gas is your gas utility. Peoples Gas delivers gas in the city of Chicago, but check: the utility name is on your gas bill.
Is there still a federal tax credit for a new water heater?
Not for 2026 installs. The IRS says the 25C energy efficient home improvement credit does not apply to property placed in service after December 31, 2025.
Sources
- Home Energy Rebate Program, HVAC and Water Heating Application (valid Jan. 1, 2026 to Dec. 31, 2026), Peoples Gas and North Shore Gas. Accessed 2026-10-14.
- ComEd appliance rebates, ComEd. Accessed 2026-10-14.
- Rebates for your home, 2026 residential fact sheet, Nicor Gas. Accessed 2026-10-14.
- About Peoples Gas, Peoples Gas. Accessed 2026-10-06.
- FAQs for modification of sections 25C, 25D and others under Public Law 119-21, Internal Revenue Service. Accessed 2026-10-06.
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