Fix First Home › Alabama › Alabama Power heat pump, water heater and thermostat rebates
Alabama Power heat pump, water heater and thermostat rebates open
Administered by Alabama Power (Southern Company).
Alabama Power pays $1,000 when an owner replaces a gas furnace with a heat pump of 18 SEER2 or more, until 1 December 2026, and $600 for switching from a gas water heater to an electric tank or heat pump water heater. It also reimburses a smart thermostat up to $200 as a digital gift card or Mastercard, and pays $500 for a home EV charger. There is no rebate for staying with electric heat or for insulation.
source · verified 13 October 2026 · amounts in US dollars
What it pays
| Upgrade | Condition | Up to |
|---|---|---|
| Heat pump replacing a gas furnace | 20 SEER or 18 SEER2 or higher; the home's largest HVAC unit; ends 1 December 2026 | $1,000 |
| Electric tank water heater replacing gas | 30 gallons or more; not tankless | $600 |
| Heat pump (hybrid) water heater replacing gas | Air-transfer technology; not tankless | $600 |
| Smart thermostat | Product cost only, paid as a digital gift card or Mastercard | $200 |
| Level 2 home EV charger | One per site; single-family home | $500 |
Alabama Power calls every offer limited-time and says it can discontinue them at any time; the heat pump offer 'ends permanently on December 1, 2026'.
Who is eligible
- heat pump
- An active residential customer who owns the property and switches from a gas furnace to an all-electric heat pump, applying within 90 days of purchase with a W-9; an onsite inspection may follow.
- water heaters
- An owner of an existing single-family home (not apartments, mobile or manufactured homes, or homes under a year old) replacing a gas water heater within the last 90 days; no water heater incentive at the address in the past eight years.
- thermostat
- Single-family homes, townhomes, condos and mobile homes; apply within a year of purchase; one per account, ever.
What disqualifies you
The rules people find out about after the work is done.
- Replacing an electric furnace or an old heat pump (the $1,000 is for switching from gas).
- Tankless water heaters.
- Apartments and other multi-family homes.
Where the application goes
Apply online on Alabama Power's application site for each offer, with proof of purchase, photos and, for the heat pump and water heaters, a W-9.
| If this is you | Apply here |
|---|---|
| Rebates and incentives | alabamapower.com |
| Heat pump application | apcdsm.customerapplication.com |
| Heat pump water heater application | apchpwhrebate.customerapplication.com |
The thing most pages get wrong
Alabama Power's page description promises savings on 'smart thermostats, heat pumps, insulation, appliances, and other energy upgrades', but the page lists four offers: a heat pump and water heaters for leaving gas, a thermostat and an EV charger. There is no insulation or appliance rebate on it, and no heat pump rebate for a home that already heats with electricity.
A firm end date
The $1,000 heat pump rebate 'ends permanently on December 1, 2026', and you must apply within 90 days of buying the heat pump. Anyone switching from a gas furnace this fall should apply before that date.
The thermostat money expires
The thermostat reimbursement comes as a digital gift card or a digital Mastercard; the Mastercard must be activated within four months and expires six months after activation.
TVA's areas are different
Where a TVA local power company delivers the electricity, as in much of north Alabama, TVA EnergyRight's menu applies instead: $500 or $800 for a heat pump, $300 for insulation and $900 off a heat pump water heater, none of it tied to leaving gas.
Sources
- https://www.alabamapower.com/residential/save-money-and-energy/rebates-and-incentives.html — primary source, read 13 October 2026