Alabama Heat Pump Rebates
Stackable incentives available to Alabama homeowners installing a qualifying heat pump in 2026.
Rebate data is re-verified against primary sources every two months.
What's available in Alabama
Alabama has no statewide heat pump rebate program. Alabama Power covers most of the state with gas-to-electric conversion rebates, but its $1,000 heat pump rebate is scheduled to end permanently on December 1, 2026. TVA EnergyRight serves the north via local power companies (geothermal heat pumps qualify for a separate $1,500 EnergyRight rebate), and several rural electric cooperatives such as Central Alabama EC and Baldwin EMC add per-ton rebates of roughly $250-$400 per ton. The IRA HEAR/HEEHRA program through ADECA still had no launch date as of September 2026.
HEEHRA in Alabama
HEEHRA rebate: Point-of-sale rebate up to $8,000 for households at or below 80% of area median income. Funded by the IRA, administered by each state. Alabama is finalizing program rules.
How heat pump rebates work in Alabama
Alabama has no statewide heat pump rebate, so the entire 2026 incentive picture is built from utility-level programs that depend on which power provider serves your address. Alabama Power covers most of the state with conversion rebates aimed at gas-to-electric switches (up to $1,000 for a high-efficiency heat pump, $600 for a heat pump water heater). Alabama Power says the $1,000 heat pump rebate ends permanently on December 1, 2026, so a fall 2026 install needs to be purchased and applied for before that date. Northern Alabama is served by local power companies inside TVA territory, where TVA EnergyRight pays up to $800 for an air-source heat pump rated 17 SEER2 or higher (or $500 for 15-16.99 SEER2) and a separate $1,500 for a geothermal install — but only through Quality Contractor Network installers. Roughly a dozen rural electric cooperatives add modest per-ton rebates on top. The IRA HEAR program through ADECA still had no launch date as of September 2026, so income-qualified federal rebates aren't yet a factor in Alabama installs.
Alabama rebate programs
Alabama Power High-Efficiency Heat Pump Rebate
$1,000Available to Alabama Power residential customers converting a gas furnace to a high-efficiency heat pump rated 18 SEER2 (or 20 SEER) or higher; the heat pump must be the home's dominant HVAC system and installs are subject to inspection. Property owners only; apply within 90 days of purchase. Alabama Power says this offer ends permanently on December 1, 2026, so installs and applications need to be in before then.
Alabama Power Heat Pump Water Heater Rebate
$600Flat $600 rebate for Alabama Power customers converting a gas water heater to a hybrid heat pump water heater in an existing single-family home (no multifamily, manufactured homes, or homes under one year old). Property owners only, no water heater incentive from Alabama Power in the past 8 years, and apply within 90 days of purchase. Listed as a limited-time offer effective January 1, 2026 that can end at any time.
TVA EnergyRight Heat Pump Rebate (Air-Source)
$800Tiered rather than flat: $500 for air-source or dual-fuel heat pumps rated 15-16.99 SEER2 and $800 at 17 SEER2 or higher; ductless mini-splits get a flat $800. Geothermal is a separate $1,500 rebate. Must be installed by a TVA Quality Contractor Network member and is available through TVA-served north Alabama local power companies such as Huntsville Utilities, Decatur Utilities, and Joe Wheeler EMC.
TVA EnergyRight HVAC Tune-Up and Duct Sealing Rebates
$300Companion incentives that pair with a TVA EnergyRight heat pump install: $50 for an HVAC tune-up and $300 for duct sealing or repair. Available through TVA-served north Alabama cooperatives.
Central Alabama Electric Cooperative Heat Pump Rebate
$1,050CAEC members get $350 per ton for a dual-fuel heat pump or a ductless mini-split rated 15 SEER or higher (about $1,050 on a 3-ton system; $250 per ton for 14 SEER mini-splits), with no stated cap. Manufactured homes converting from an electric furnace get $400 per ton, or $400-$700 flat on new manufactured homes. A licensed HVAC installer, a Manual J load calculation, and proof of purchase must be submitted to CAEC.
6 utility-specific programs not shown here. Enter your ZIP in the calculator to filter to just your utility.
A worked example: gas-furnace replacement in Birmingham
Tasha owns a 1,900 sq ft single-family home in Birmingham served by Alabama Power. Her 19-year-old gas furnace and central AC are both end-of-life. She gets quotes for a 3-ton ducted air-source heat pump at 18 SEER2 / 8.9 HSPF2 with a small electric resistance backup. Installed quotes land between $11,800 and $14,500; she picks an Alabama-licensed contractor at $12,800. Because the install replaces gas heat with an Alabama Power-approved high-efficiency heat pump, she qualifies for the $1,000 Alabama Power High-Efficiency Heat Pump Rebate. Her household income is around 130% of Birmingham's AMI — above the 80% threshold many income-qualified programs require, but Alabama HEAR isn't open anyway. The federal §25C credit is gone for 2026 installs. Because the Alabama Power offer ends permanently on December 1, 2026, she schedules the install for October and files the application within 90 days of purchase. Her total stack is $1,000 against a $12,800 quote — modest in absolute dollars but the Alabama Power rebate is one of the few non-income-qualified heat pump rebates active in 2026 anywhere in the Southeast outside Georgia and the Carolinas.
Choosing a contractor in Alabama
Alabama licenses HVAC contractors through the Alabama HVAC Board (HVACR.alabama.gov). The license number must appear on the contract and on any permit pulled with the local building department. Alabama Power's High-Efficiency rebate doesn't require contractor enrollment in a program-ally sense, but the application must include the AHRI matching certificate for the indoor/outdoor combination — ask for it at the quote stage. In TVA territory (north Alabama), the rebate is gated on a Quality Contractor Network installer; a non-QCN contractor cannot file the EnergyRight rebate on your behalf, even if the equipment qualifies. The QCN roster is searchable at energyright.com.
Common pitfalls for Alabama homeowners
- Assuming the Alabama Power rebate covers heat-pump-to-heat-pump replacements. Alabama Power's High-Efficiency Heat Pump Rebate is structured around gas-to-electric conversions. A homeowner replacing an existing heat pump with another heat pump generally won't qualify for the $1,000 figure even at the same efficiency tier. Check the program eligibility before assuming the rebate applies to a like-for-like swap.
- Skipping the AHRI matching certificate. Alabama Power and TVA EnergyRight rebates both require an AHRI-matched system — the indoor and outdoor units must be on a single AHRI certificate documenting the combined SEER2 and HSPF2 performance. A contractor who quotes 'matched' equipment but can't produce the AHRI number is a red flag; without it the rebate gets denied at processing.
Estimate your net cost
Used to determine HEEHRA eligibility (under 80% area median income).
- Central Alabama Electric Cooperative Heat Pump Rebate−$1,050
- Alabama Power High-Efficiency Heat Pump Rebate−$1,000
- TVA EnergyRight Heat Pump Rebate (Air-Source)−$800
- Alabama Power Heat Pump Water Heater Rebate−$600
- TVA EnergyRight HVAC Tune-Up and Duct Sealing Rebates−$300
Estimate only. Includes only programs accepting applications today — waitlisted or closed programs are excluded. Mutually exclusive programs (e.g. HEEHRA vs HOMES) and project-cost caps are applied per current program rules; confirm with your installer and utility before signing.
How to claim each rebate
- Get pre-approved (where required). Some utility programs require approval before install. Check program details before signing a contract.
- Use a participating contractor. Many programs require a licensed installer from an approved contractor list — especially HEEHRA, which routes through CEC-approved contractors who process the rebate at point of sale.
- Save documentation. AHRI certificate, model numbers, and itemized invoice are required for most utility rebates.
- Submit utility rebate within 60–90 days of install. Some programs are first-come first-served and close mid-year — funding can run out before the calendar year does.
If you can't afford a replacement in Alabama
Rebates lower the price, but they still assume you can pay the rest. If your heating system is unsafe or has failed and a new one is out of reach, these programs repair or replace equipment at low or no cost for income-qualified households. Heat Pump Pricing Index is an independent information site — we don't fund, discount, or install equipment — so these are the doors to knock on first:
- Weatherization Assistance Program (WAP). Free energy and health-and-safety repairs — an unsafe furnace is exactly the kind of problem it fixes — for households at or near 200% of the poverty line. Apply through your local community action agency: how to apply (energy.gov).
- LIHEAP. Heating-bill help plus, in most states, a crisis component for broken or dangerous heating equipment. Same local agency; Alabama LIHEAP contacts.
- USDA Section 504 Home Repair. For homeowners outside cities: 1% loans up to $40,000, and grants up to $10,000 for homeowners 62 and older to remove health and safety hazards. Program page and state offices (rd.usda.gov).
- Your utility and 211. Most electric and gas utilities run an income-qualified assistance fund — call the number on your bill and ask. Dialing 211 reaches a local specialist who knows which agencies in Alabama currently have funds.
Safety first: if a technician has told you a heat exchanger is cracked, stop using the furnace and make sure you have a working carbon monoxide detector before anything else.