Alaska Heat Pump Rebates & Incentives (2026)
Alaska heat pump incentives are region-dependent. The ACES program offers $4,000–$8,500 for 43 coastal communities, the Fairbanks change-out program covers up to $17,500 for replacing solid-fuel heating, and utility rebates add $500–$1,000. Federal tax credits ended December 31, 2025. The IRA-funded HEAR and HOMES programs have not launched. This guide covers all major Alaska heat pump incentives available in 2026, including the ACES program, Fairbanks change-out program, utility rebates, and IRA program status. Here's what's actually available.
Last verified: March 24, 2026
Rates and program availability may change after this date.
Alaska
Limited / Region-Dependent
Alaska incentives depend heavily on location. The ACES program offers $4,000–$8,500 for 43 coastal communities. Fairbanks provides up to $17,500 through its air-quality change-out program. Utility rebates range $500–$1,000 (Chugach Electric, Homer Electric, AP&T). Federal 25C/25D credits expired Dec 2025. HEAR/HOMES ($74.6M) have not launched.
Sources:
The Short Version
✓ ACES Program (43 Coastal Communities)
$4,000–$8,500 per household for air-source heat pump installation, income-tiered. Funded by a $38.6 million EPA grant. Active and disbursing funds.
✓ Fairbanks Change-Out Program
Up to $7,500–$17,500 for replacing wood, coal, or oil heating with a heat pump in the Fairbanks North Star Borough nonattainment area.
✓ Total Potential Savings
$5,000 (above 150% AMI, coastal) to $9,500+ (below 80% AMI, coastal). Fairbanks solid-fuel change-out grants can reach ~$17,500 total incentives.
✗ Federal Tax Credits Expired
Section 25C and 25D both ended December 31, 2025 under the One Big Beautiful Bill Act. No federal tax credit is available for 2026 heat pump installations.
⚠ Most Programs Are Region-Specific
ACES covers only coastal communities from Ketchikan to Kodiak — not Fairbanks, Anchorage, or the Interior. The FNSB change-out covers only the Fairbanks nonattainment area. Anchorage residents are limited to the Chugach Electric pilot ($900). IRA-funded HEAR and HOMES rebates (up to $14,000) have not launched in Alaska and no start date has been announced.
Federal Tax Credits Are Gone
Both Section 25C and Section 25D federal tax credits ended December 31, 2025. The One Big Beautiful Bill Act (signed July 4, 2025) accelerated their expiration by seven years. Section 25C previously covered up to $2,000 for air-source heat pumps. Section 25D covered 30% of geothermal heat pump costs with no cap. Neither credit is available for any heat pump installed in 2026. The "placed in service" rule means a system purchased in 2025 but installed in 2026 does not qualify. For full details, see Federal Heat Pump Tax Credits Ended.
Alaska has no state income tax, so there are no state-level tax credits for heat pumps or any other energy improvements. All remaining incentives come from grant programs, utility rebates, and financing programs.
ACES Program — Alaska's Largest Active Heat Pump Incentive
The Accelerating Clean Energy Savings (ACES) program is the most significant heat pump incentive currently operating in Alaska. Funded by a $38.6 million EPA Climate Pollution Reduction Grant and administered by Southeast Conference and Alaska Heat Smart, ACES provides income-tiered grants for air-source heat pump installation across 43 coastal communities from Ketchikan to Kodiak.
| Income Tier | ACES Grant |
|---|---|
| ≤80% of Area Median Income (AMI) | $8,500 |
| 80–150% AMI | $6,000 |
| Above 150% AMI | $4,000 |
Applicants must currently heat with oil, propane, gas, or wood and must complete a pre-installation energy assessment. Approved cold-climate models include Daikin Aurora/Atmosphera, Mitsubishi Hyper Heating M/P series, and Fujitsu LZAH/RLX series. The program operates on a reimbursement model — homeowners pay upfront and receive grants after installation. Approximately 64 installations have been completed with 300+ applications in progress as of early 2026.
⚠ ACES Does Not Cover Interior Alaska
ACES is limited to 43 coastal and Southcentral communities. Fairbanks, the Mat-Su Valley, and most road-system communities between Anchorage and Fairbanks are not eligible. Anchorage is not in the ACES service area.
Other Alaska Heat Smart Programs
Alaska Heat Smart also administers two smaller programs. The Clean Heat Incentive Program (CHIP) provides $1,500–$3,000 for homeowners in Juneau and Sitka earning 80–125% of AMI. The Healthy Homes Program offers up to $15,000 in comprehensive home improvements including heat pumps for qualified lower-income families in Juneau.
Juneau: Alaska's Heat Pump Capital
Juneau has the highest per-capita heat pump adoption rate in Alaska, driven by cheap hydroelectric power (97% of the grid) and expensive heating oil. Some residents report 50% reductions in heating costs after installing heat pumps. Multiple layered programs — ACES, CHIP, Healthy Homes, the Alaska Carbon Reduction Fund, and Thermalize Juneau group-purchasing campaigns — make Juneau the strongest market for heat pumps in the state.
IRA Rebates: HEAR & HOMES Have Not Launched
Alaska was allocated approximately $74.6 million in IRA funding for the Home Electrification and Appliance Rebates (HEAR) and Home Efficiency Rebates (HOMES) programs, administered by the Alaska Energy Authority in partnership with AHFC. As of March 2026, neither program has launched and no start date has been announced. Federal funding freezes in early 2025 and program design complexity have contributed to the delay.
What HEAR Would Provide (When It Launches)
| Upgrade | Maximum Rebate |
|---|---|
| Heat pump HVAC | $8,000 |
| Heat pump water heater | $1,750 |
| Electrical panel upgrade | $4,000 |
| Wiring | $2,500 |
| Per-household cap | $14,000 |
HEAR eligibility would be limited to households below 150% AMI, with those below 80% AMI receiving 100% of costs (up to caps) and those at 80–150% AMI receiving 50%. The HOMES program would offer performance-based rebates of $2,000–$8,000 tied to measured energy savings of 20–35%. Both programs survived the One Big Beautiful Bill Act and remain funded through 2031 or until funds are exhausted.
Active AHFC Programs
While HEAR and HOMES are pending, AHFC offers several active programs that can support heat pump installations:
New Home Construction Rebate
Up to $10,000 for new construction meeting 5-Star Plus or higher energy efficiency standards. Funded at $7 million from IRA appropriations.
Energy Efficiency Interest Rate Reduction
Interest rate reductions on AHFC-financed mortgages for energy-efficient homes. Applies to the first $250,000 of loan amount. Heat pump installation qualifies if it improves the home's energy rating.
Renovation Loan Program
Up to $574,912 for energy improvements to existing owner-occupied homes, with terms up to 30 years at fixed rates. Heat pump installation is an eligible improvement.
Utility & Local Programs
Alaska's electric cooperatives and utilities offer a patchwork of heat pump incentives that vary widely by region. Most programs are modest compared to Lower 48 utilities, reflecting the economic reality that heat pumps compete against very different fuel costs depending on location.
Utility Rebates
| Utility | Region | Heat Pump Rebate | Notes |
|---|---|---|---|
| Chugach Electric | Anchorage | $900 | Pilot program; $1,500 for commercial |
| Homer Electric | Kenai Peninsula | $1,000 | $500 member + $500 installer; 20-unit cap |
| Alaska Power & Telephone | SE communities | $500–$1,000 | $500 match for Sealaska shareholders |
| Petersburg Municipal P&L | Petersburg | Varies | HP & HPWH; min HSPF ≥ 9.0 |
| GVEA | Fairbanks | — | REDUCE loan at 3% ($500–$10,000) |
| MEA | Mat-Su Valley | — | Program in development; not launched |
| AEL&P | Juneau | — | No rebate; favorable rate structure |
Homer Electric's program requires pre-approval before purchasing or installing, and installations must be completed within 90 days of approval. Chugach Electric notes that its pilot "may be most beneficial to members who do not have access to natural gas service." A June 2025 study found heat pumps cost Anchorage residents approximately $2,300 more annually than natural gas heating at current rate structures.
Fairbanks North Star Borough — Air Quality Change-Out Program
The FNSB Air Quality Division provides the state's largest local heat pump incentive through its solid-fuel heating change-out program. Fairbanks is an EPA-designated PM2.5 nonattainment area with severe winter air quality problems, and the borough offers substantial rebates for switching to cleaner heating — including heat pumps.
| Device Being Replaced | Maximum Rebate |
|---|---|
| Hydronic heater (wood/coal boiler) | $17,500 |
| Wood stove, pellet stove, or coal stove | $7,500 |
Applicants must live within the nonattainment area, own the property, and receive pre-approval before replacing equipment. Heat pumps are explicitly eligible under the "Electricity (Includes Heat Pumps)" replacement category. This program is particularly important because Fairbanks residents are not eligible for the coastal-only ACES program.
✓ Best Candidates for Alaska Heat Pump Incentives
Southeast Alaska homeowners heating with oil who have access to cheap hydroelectric power and ACES grants. Fairbanks homeowners replacing a wood boiler or coal stove through the FNSB change-out program (up to $17,500). Kenai Peninsula homeowners who can stack Homer Electric's rebate with other programs. Juneau residents with access to multiple layered incentives.
Other Local Programs
Beyond ACES and FNSB, Juneau homeowners can access the Alaska Carbon Reduction Fund (partial to full funding for lower-income households), the Juneau Carbon Offset Fund, and Thermalize Juneau group-purchasing campaigns with bulk pricing. Low-interest loans are available through True North Federal Credit Union (up to $12,500 at 4% for 60 months) and Tongass Federal Credit Union (up to $15,000 at 5.5% for 60 months).
The Northwest Arctic Borough received a separate $55 million DOE grant to install 850 heat pumps across 10 remote villages — a direct deployment program rather than a homeowner application process.
How Programs Stack
Alaska's incentive programs can generally be combined, but stacking depends more on geography than income. ACES (EPA-funded) and utility rebates stack without restriction since they come from different funding sources. ACES and HEAR (when it launches) likely cannot fund the same heat pump installation since both are federal grants — homeowners would choose one. Combined incentives cannot exceed total project cost.
Above 150% AMI — Coastal Community, Ducted System (~$14,000)
- ACES rebate: $4,000
- Utility rebate (HEA/AP&T): $500–$1,000
Realistic maximum: ~$5,000
80–150% AMI — Coastal Community, Ducted System (~$14,000)
- ACES rebate: $6,000
- Utility rebate (HEA/AP&T): $500–$1,000
Realistic maximum: ~$7,000
Below 80% AMI — Coastal Community OR Fairbanks Solid-Fuel Switch
- Best case coastal: ACES $8,500 + utility $500–$1,000 = ~$9,500
- Best case Fairbanks: FNSB change-out up to $17,500 (hydronic heater)
Realistic maximum: ~$9,500 (coastal) or ~$17,500 (Fairbanks)
What You'll Actually Pay
For a typical $10,000–$15,000 heat pump installation: out-of-pocket costs range from $0 (Fairbanks solid-fuel switch or coastal ≤80% AMI) to $9,000+ (Anchorage with utility rebate only). Anchorage homeowners without access to ACES or the FNSB program face the highest out-of-pocket costs in the state.
Alaska has no state income tax, so there are no state tax credits to stack. GVEA's REDUCE loan (3% interest) provides financing but not a rebate. Low-interest credit union loans are available through Alaska Heat Smart partnerships in Southeast Alaska.
Weatherization Assistance
Alaska's Weatherization Assistance Program (WAP) provides free energy improvements for income-eligible households at or below 200% of the federal poverty level ($37,620 for one person; $78,000 for a family of four in Alaska, which uses higher poverty guidelines than the Lower 48). Heat pumps may be installed if the energy audit determines they are cost-effective for the home.
WAP is administered by AHFC through local providers including Cook Inlet Housing Authority (Anchorage), RurAL CAP, and Alaska CDC. The program is funded at approximately $2 million annually plus $18 million in supplemental IIJA funding. Contact AHFC at ahfc.us or call 907-338-6100 to check eligibility.
Climate Context: What Works Where
Alaska spans IECC Climate Zones 7 (Very Cold) and 8 (Subarctic) — the two coldest zones in the U.S. classification system. Zone 8 is essentially unique to Alaska and covers the Interior and Arctic regions. Heat pump selection must match your local design temperature, and supplemental heating is required in most of the state outside Southeast Alaska.
| City | Design Temp (99.6%) | Climate Zone | Heat Pump Viability |
|---|---|---|---|
| Juneau | 3°F | 7 | Excellent — sole heating source |
| Anchorage | -11°F | 7 | Good — occasional backup needed |
| Fairbanks | -47°F | 8 | Supplemental heat required |
Modern cold-climate heat pumps operate effectively down to approximately -13°F to -22°F, maintaining a coefficient of performance (COP) of 1.8–2.5 at those temperatures. Even at COP 1.8, heat pumps deliver 80% more heat energy than the electricity consumed — far more efficient than electric resistance heating (COP 1.0). Advanced prototypes being tested at the Cold Climate Housing Research Center in Fairbanks are pushing operational limits to -30°F and below.
Alaska is heavily dependent on heating oil: approximately 28–32% of households rely on fuel oil as their primary heating fuel, with the percentage much higher in rural areas. The statewide average heating oil price across unsubsidized communities was $6.70 per gallon in 2024, with Western Alaska averaging $8.05 and some remote communities exceeding $13 per gallon. Southeast Alaska's combination of affordable hydroelectric power and expensive heating oil creates the strongest economic case for heat pumps in the state. For homeowners considering a battery backup system alongside a heat pump, see our guide to home batteries.
⚠ Common Mistake: Assuming Heat Pumps Replace All Heating in Alaska
Outside Southeast Alaska, most installations are dual-fuel systems where the heat pump handles 60–80% of heating load and an existing oil boiler, Toyo stove, or electric resistance heater serves as backup during the coldest periods. Sizing your heat pump for your region's design temperature — not just average winter temperature — is critical. Work with an installer experienced in cold-climate systems.
How to Apply
The application process depends on which program you're pursuing. For the ACES program — Alaska's largest active incentive — follow these steps:
Check your eligibility
Confirm your community is in the ACES service area (43 coastal communities from Ketchikan to Kodiak) and that you currently heat with oil, propane, gas, or wood. Visit akheatsmart.org/aces for the full community list.
Complete a pre-installation energy assessment
Schedule an assessment through Alaska Heat Smart. This determines your income tier and the appropriate heat pump system for your home.
Get quotes and install the system
Obtain quotes from approved contractors and install an approved cold-climate heat pump model. ACES operates on a reimbursement model — you pay upfront.
Submit documentation for reimbursement
After installation, submit your receipts and documentation to Alaska Heat Smart to receive your grant. For Fairbanks residents, apply through the FNSB Air Quality Division at aq.fnsb.gov/changeout — pre-approval is required before replacing equipment.
What to Watch
HEAR & HOMES Launch Timeline
Alaska's $74.6 million in IRA rebate funding is allocated but the consumer-facing programs have not launched. AHFC and AEA have not announced a date. Sign up for updates at ahfc.us to be notified when applications open.
IRA Funding Runway
HEAR and HOMES survived the One Big Beautiful Bill Act and remain funded through 2031. However, future legislative changes could affect program availability. The ACES program's $38.6 million EPA grant has a five-year spending window.
Cold-Climate Heat Pump Technology
LG and the University of Alaska Anchorage opened cold-climate heat pump research labs in 2024. A UAF prototype using R-32 refrigerant showed 54% COP improvement at -30°F to -35°F compared to commercial R-410A units. Advancing technology could expand viable heat pump use deeper into Interior Alaska.
Cook Inlet Natural Gas Uncertainty
Declining Cook Inlet gas production could raise natural gas prices for Anchorage and Southcentral homeowners, improving the economics of heat pumps in the region. Chugach Electric is already exploring heat pump-specific rate structures.
Frequently Asked Questions
What heat pump rebates are available in Alaska in 2026?
Alaska heat pump incentives depend heavily on where you live. The ACES program offers $4,000–$8,500 for 43 coastal communities from Ketchikan to Kodiak. The Fairbanks North Star Borough air quality change-out program provides $7,500–$17,500 for replacing solid-fuel heating devices. Utility rebates range from $500 to $1,000 through Chugach Electric, Homer Electric, and Alaska Power & Telephone. Federal tax credits (25C/25D) expired December 31, 2025. The IRA-funded HEAR and HOMES programs have not launched in Alaska.
Can I stack the ACES program with utility rebates in Alaska?
Yes. ACES grants (EPA-funded) can generally be stacked with utility rebates from Chugach Electric, Homer Electric, or other providers. However, ACES and HEAR (when it launches) likely cannot fund the same heat pump installation since both are federal grants. Utility rebates from different funding sources stack without restriction. Combined incentives cannot exceed total project cost.
Do heat pumps work in Alaska’s extreme cold?
Modern cold-climate heat pumps work effectively in much of Alaska. In Southeast Alaska (Juneau, Sitka, Ketchikan), where design temperatures are around 3°F, heat pumps can serve as the sole heating source. In Anchorage (design temp -11°F), they work well with occasional backup. In Fairbanks (design temp -47°F), supplemental heating is required for the coldest periods. Even at reduced efficiency in extreme cold, heat pumps deliver significantly more heat per unit of electricity than electric resistance heating.
Who administers Alaska’s heat pump incentive programs?
The ACES program is administered by Southeast Conference and Alaska Heat Smart, funded by an EPA Climate Pollution Reduction Grant. The Alaska Housing Finance Corporation (AHFC) administers the state’s IRA-funded rebate programs (HEAR and HOMES, not yet launched), the Weatherization Assistance Program, and energy efficiency loan programs. The Fairbanks North Star Borough Air Quality Division runs the solid-fuel change-out program. Individual utilities administer their own rebate programs.
Has Alaska launched the HEAR rebate program?
No. As of March 2026, Alaska’s HEAR and HOMES programs have not launched and no start date has been announced. Alaska was allocated approximately $74.6 million for both programs, administered by the Alaska Energy Authority in partnership with AHFC. When launched, HEAR would provide up to $8,000 for heat pump HVAC and up to $14,000 total per household for income-qualifying homeowners. The programs survived the One Big Beautiful Bill Act and remain funded through 2031.
Sources
Disclaimer: This page covers the main statewide, regional, utility, and IRA heat pump incentives available to Alaska homeowners in 2026. It does not calculate savings, guarantee eligibility, or represent any incentive program. Alaska's incentive landscape varies significantly by region — the ACES program covers only coastal communities, the FNSB change-out covers only the Fairbanks nonattainment area, and utility programs vary by service territory. We verify status regularly but programs can change without notice. Always confirm current amounts and eligibility with AHFC, Alaska Heat Smart, your local utility, and your contractor before making decisions.
See how this state compares → Heat Pump Rebates by State (2026)