Alabama headline: Live now, and depends on your utility: Alabama Power pays $1,000 to switch from gas to a heat pump (plus $650 for a hybrid heat pump water heater), and TVA EnergyRight pays $500 to $1,500 in northern Alabama. The state ADECA rebate, up to $8,000 for income-eligible households, is rolling out in 2026 as a point-of-sale discount. The federal 25C credit expired after December 31, 2025.
Alabama has live rebates plus a state rebate rolling out
Alabama is in better shape than several neighbors. It has real utility rebates you can claim today, and the big state rebate is actively launching rather than stuck in planning.
The state program, run by the Alabama Department of Economic and Community Affairs (ADECA), is rolling out its HOMES and HEAR rebates in 2026. HEAR pays up to $8,000 per heat pump for low-to-moderate income households, as a point-of-sale discount.1 Because the rollout is in progress, confirm current status by emailing [email protected].
This is the Alabama companion to our 2026 heat pump rebate guide.
What is live now: utility rebates
Your options depend on who bills you.
Alabama Power (central and southern Alabama)
Alabama Power serves most of the state, including Birmingham and Montgomery. Its Switch and Save program rewards moving off gas heat.2
| Item | Alabama Power rebate |
|---|---|
| Gas-to-heat-pump conversion (Switch and Save) | $1,000 |
| Hybrid heat pump water heater | $650 |
The $1,000 applies when you replace gas heat with a qualifying electric heat pump. Confirm current terms with Alabama Power before you buy.
TVA EnergyRight (northern Alabama)
Northern Alabama, including the Huntsville area, is largely served by the Tennessee Valley Authority through local power companies and cooperatives. TVA EnergyRight offers a heat pump rebate of $500 to $1,500, applied through your local power company.3
The senior and income path: TVA Home Uplift
For a low-income senior in northern Alabama, this is the one to ask about. TVA’s Home Uplift program provides an average of about $10,000 in free upgrades, which can include a heat pump, insulation, and duct sealing.4
Who qualifies: households at or below 200% of the Federal Poverty Level, delivered through participating local power companies. In 2026, 200% of the poverty level is roughly $31,000 for a single person and $42,000 for a couple, so many seniors on Social Security qualify. There is often a waitlist, so apply early.
Statewide, the ADECA HEAR rollout adds another income-qualified path (up to $8,000). Between the two, a low-income Alabama senior has a real route to a low-cost or no-cost heat pump.
Income limits for the state rebate
The ADECA HEAR rebate uses Area Median Income (AMI) at the county level.7 Below 80% AMI gets the highest tier (up to $8,000); 80 to 150% AMI gets 50% of project cost. The HOMES rebate has no income limit.
Approximate 80% AMI thresholds for a family of 4:
| County / region | 80% AMI (family of 4) |
|---|---|
| Jefferson County (Birmingham) | ~$66,000 |
| Madison County (Huntsville) | ~$72,000 |
| Montgomery County | ~$60,000 |
| Mobile County | ~$56,000 |
| Rural Alabama counties | ~$48,000 to $52,000 |
For a senior household on Social Security only, eligibility is usually clean in any Alabama county.
Federal layer (2026)
The federal 25C Energy Efficient Home Improvement Credit, which paid up to $2,000 for a heat pump in prior years, expired for installs after December 31, 2025.5
What remains in 2026:
- 25D Residential Clean Energy Credit: 30% of solar cost through 2034. Applies if you pair the heat pump with solar.6
- 25C on insulation, panel upgrades, and audits: still active at smaller caps. Heat pumps are excluded.
See IRA 25C expired 2026 for the full federal picture.
Senior stack scenarios
Scenario A: Birmingham retired couple, Alabama Power, switching from gas
- Alabama Power Switch and Save: $1,000
- ADECA HEAR (if income-eligible, as it rolls out): up to $8,000
- Live today: $1,000, with the state rebate stacking on top once your application is approved.
Scenario B: Huntsville household, TVA local power company, income at 180% of poverty level
- TVA EnergyRight heat pump rebate: $500 to $1,500
- TVA Home Uplift (under 200% poverty): about $10,000 in free upgrades
- Live today: potentially a largely no-cost heat pump through Home Uplift, plus the EnergyRight rebate.
Scenario C: Mobile household, above 150% AMI
- ADECA HEAR: not eligible over 150% AMI
- Alabama Power Switch and Save (if converting from gas): $1,000
- Live today: $1,000. Consider the 25D solar credit if pairing with solar.
Verify your contractor first
A rebate is only as good as the contractor who installs the equipment. Alabama licenses residential builders through the Home Builders Licensure Board and HVAC work through the state HVAC board, and utility rebates usually require an enrolled contractor.
Red flags to reject:
- Door-to-door pitches. Legitimate contractors do not cold-call.
- A guaranteed state rebate before you apply. The ADECA program checks eligibility case by case.
- No Alabama license number on the quote.
- R-410A equipment for a 2026 install. That refrigerant no longer qualifies under the EPA rule.8
Verify a license in about a minute with our Alabama contractor license lookup guide.
- Find your utility on your electric bill (Alabama Power or TVA/co-op)
- Alabama Power: claim the $1,000 Switch and Save if moving off gas
- Northern Alabama: check TVA EnergyRight, and Home Uplift if income-qualified
- Email [email protected] about the $8,000 state HEAR rebate
- Use an Alabama licensed, utility-enrolled contractor
What’s next
- Federal 2026 landscape: Heat pump rebates 2026
- Post-25C federal picture: IRA 25C expired 2026
- Cold-climate equipment: Cold-climate heat pumps
- Total cost math including stacks: Heat pump cost calculator
- Alabama contractor check: Alabama contractor license lookup
- Family in other states: Tennessee, Georgia
Citations
- Home Energy Rebates (HOMES and HEAR) Rollout. Alabama Department of Economic and Community Affairs (ADECA), retrieved July 21, 2026. adeca.alabama.gov energy.
- Switch and Save and Residential Rebates. Alabama Power, retrieved July 21, 2026. alabamapower.com save money and energy.
- Heat Pump Rebate (EnergyRight). Tennessee Valley Authority, retrieved July 21, 2026. energyright.com heat pump rebate.
- Home Uplift Income-Qualified Upgrades. Tennessee Valley Authority, retrieved July 21, 2026. energyright.com home uplift.
- Energy Efficient Home Improvement Credit (25C). U.S. Internal Revenue Service. irs.gov 25C.
- Residential Clean Energy Credit (25D). U.S. Internal Revenue Service. irs.gov 25D.
- Income Limits Documentation System. U.S. Department of Housing and Urban Development, April 2026. huduser.gov income limits.
- Technology Transitions: Restrictions on Use of Certain HFCs. U.S. Environmental Protection Agency. epa.gov technology transitions.