Alabama Heat Pump Rebates
Through TVA EnergyRight Residential Rebates, Alabama heat pump rebates pay as much as $1,500 for a geothermal system. If you own your home and are replacing a gas furnace, the Alabama Power High Efficiency Heat Pump Rebate can also pay you $1,000.
Find the Alabama rebates for your ZIP code
If JavaScript is disabled, look up your state in the program table.
Who sends your electric bill?
What are you putting in?
- Largest standard rebate available
- $1,000 For the Alabama Power High Efficiency Heat Pump Rebate, open to Alabama Power Co customers
- Geothermal (ground-source) system
- $1,500 TVA EnergyRight Residential Rebates (heat pumps)
- HEAR appliance rebates
- Not yet open Run by ADECA. Official page
- HOMES whole-home rebates
- Not open yet Paid on the energy saved by a whole-home upgrade. Official page
- The 25C federal tax credit
- Ended No credit for heat pumps installed after 31 December 2025
Alabama rebates for heat pumps
First find the company that supplies your power. Then check which old furnace the offer asks you to replace: gas or electric.
| Program | Who can get it | Central heat pump | Ductless mini-split | Heat pump water heater | Geothermal | Status | Apply |
|---|---|---|---|---|---|---|---|
| Alabama Power High Efficiency Heat Pump Rebate | Served by Alabama Power Co | $1,000 | None | None | None | Open | Official page |
| Alabama Power Hybrid (Heat Pump) Water Heater Rebate | Served by Alabama Power Co | None | None | $600 | None | Open | Official page |
| TVA EnergyRight Residential Rebates (heat pumps) | Served by Tennessee Valley Authority, City of Huntsville | $800 | $800 | $900 | $1,500 | Open | Official page |
| Central Alabama Electric Cooperative Heat Pump Rebates | Served by Central Alabama Electric Coop | $700 | $350 per ton | None | None | Open | Official page |
Steps for Claiming Alabama Heat Pump Rebates
Your utility decides the rules for installing the system and for the rebate paperwork.
- Alabama Power: As the property owner, you have 90 days after buying to apply online at Alabama Power. Someone may visit your home to inspect the work.
- Tax form requirement: You must attach a W-9 when you apply to Alabama Power. It is the tax form that lists your taxpayer ID number.
- TVA EnergyRight: Customers in North Alabama, Huntsville Utilities customers included, must hire someone from the TVA EnergyRight Quality Contractor Network before the installation.
- TVA redemption: Once the job is done, your contractor sends in the application. You then get an email with a code to claim your money.
- Central Alabama Electric Cooperative: Members must hire a licensed heating and cooling installer. They then send Central Alabama Electric Cooperative their proof of purchase.
- Sizing and inspections: Co-op members must send in a load calculation, a check of what size unit the home needs. A manufactured home also gets its skirting (the panels around its base) inspected.
State Rebates and the Alabama Weatherization Program
Alabama's Home Energy Rebates under the Inflation Reduction Act are still being set up by the Alabama Department of Economic and Community Affairs. These are federal rebates that each state runs. HEAR helps pay for electric appliances such as heat pumps, and HOMES pays for energy savings across the whole home. Both the appliance rebates and the whole-home rebates are still in the planning stage. The state has not yet said who will qualify by income or when they will open.
If your household has a lower income, two programs can help you right now. If your household earns up to 200% of the federal poverty level, the Alabama Weatherization Assistance Program can help you. Weatherization is free work, such as added insulation and sealed drafts, that keeps your home warmer and cheaper to heat. In North Alabama, TVA EnergyRight Home Uplift gives free home upgrades, worth $10,000 on average, to customers who meet its income rules.
Heating Fuels, Co-ops and Tax Rules Across Alabama
Electricity heats about seven in ten Alabama homes, according to the Energy Information Administration. One in four households use natural gas, and propane or other petroleum fuels heat about five in 100.
That is why the $1,000 Alabama Power rebate is only for owners who are replacing a natural gas furnace. You will not qualify if your old system is a heat pump or an electric heater. The new heat pump must be your main (largest) system. Its cooling efficiency score on the label must reach 20 SEER or 18 SEER2. Your installer can check the rating for you before you sign.
A ton tells you how much heating and cooling a unit can do, not how heavy it is. In an existing manufactured home, Central Alabama Electric Cooperative gives $400 for each ton when the heat pump takes the place of an electric furnace. The federal 25C tax credit for heat pumps has also ended. A heat pump installed and running after December 31, 2025 does not qualify.
Common Questions About Alabama Heat Pump Rebates
Can you still claim the federal heat pump tax credit in 2026?
No. Congress ended it with the One, Big, Beautiful Bill (Public Law 119-21), which was signed on July 4, 2025. The IRS confirmed this in IRS Fact Sheet FS-2025-05, issued August 21, 2025: heat pumps installed after 2025 do not qualify. Within the state, Alabama tax incentives only help households that switch their main heating to wood.
In Alabama, how does the size of my system change my heat pump rebate?
Central Alabama Electric Cooperative pays several of its heat pump rebates by the size of your new unit, measured in tons. When a heat pump takes the place of an electric furnace in a new manufactured home, a two to 2.5 ton unit earns $400. A three to four ton unit earns $600. A five-ton system in a new manufactured home earns $700. Standard homes get $350 per ton for a mini-split or a dual fuel unit. A mini-split is usually a wall-mounted unit with no ductwork. A dual fuel system pairs a heat pump with a furnace that takes over on the coldest days.
Who can get the Alabama Power rebate for a water heater?
If you own a single-family home and replace a gas water heater, Alabama Power pays $600. The offer took effect January 1, 2026. You cannot have had another water heater incentive from this utility in the past eight years. You have 90 days to apply. Send photos, proof of purchase, details of the old gas unit, and a W-9 (the tax form with your taxpayer ID number).
In Alabama, how can I get energy upgrades for free?
Wherever you live in Alabama's 67 counties, you can apply through a local community action agency or the Central Alabama Regional Planning and Development Commission. For families who qualify, these local groups do free work that helps their homes use less energy, overseen by the state weatherization office. To hear when the federal rebates for appliances and whole homes open in Alabama, ask for updates by email at rebates@adeca.alabama.gov.
Get Alabama installer quotes with the rebates taken off
Most rebates on this page are paid through the installer or need the installer's paperwork, so the quote is where the money is settled. Tell us the ZIP code and what you want installed, and installers who work with these programs send a written price with the rebates taken off.