Can devas generate merits?

Can devas in heavenly realms do good deeds and generate merits so that they can have a rebirth in higher heavenly realms progressing from one higher heaven to another?

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The first sutta that comes to mind is Ud 3.7 Sakkudāna [Kassapa].

Itā€™s generally understood that rebirth in the brahma realms is obtained through meditation, which of course, is a form of merit. However Iā€™m not remembering devas who practice meditation in order to obtain higher rebirth. But there could be things Iā€™m not thinking of.

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Devas aspire to human rebirth:

ā€œThe human state, monks, is the devasā€™ reckoning of going to a good destination.ā€

ā€”Itivuttaka 83

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Any learned noble disciple who gets reborn in one of the four form realms or any of the first three formless realms will be extinguished there. Please refer to AN4.123 and AN3.116.

Well, you can try having a look at this little essay, at least the middle part of it about rebirth. It is definitely not traditional, but part of my larger work of trying to so to say ā€œreformā€ the Abhidhamma. It arose because I have had similar questions.

(P.S.: It is to some degree still a draft).

Yes I believe they certainly can. But it tends to be impossible as we know enjoyments/distractions are in tremendous amount there, itā€™s very hard for a god to keep precepts, follow dhamma and think about creating merit instead of spending already earned merit.

In our human realm only we see rich people or letā€™s say for example filmstarsā€¦do they think of making merit or doing good deeds? Certainly not as most of them are busy enjoying life or if there is anyone to be found its very rareā€¦so even here people who are rich in enjoyments rarely think of creation meritsā€¦well we can imagine how hard it must be in the heavenly realms where there is only sensual pleasure and no suffering!?

Hereā€™s something to help you -

Just read itā€¦all realms starting from hells upto desire heavens are explained by lord buddha in so much details unlike found anywhere. Why gods after completing their lifespan are reborn in hell realms is also explained and even how God can do good deeds to avoid lower realms and take birth in human realm is also explained there. Itā€™s very interesting read.

One more thing I would like to mention. Based on what my teacher said, if one person can keep 5 precepts everyday, 8 precepts on 4 Arya-uposatha(fast) days and 8 precepts for 3.5 months in rainy days every year, then such person surely gets higher rebirth in next life and then such person will not fall in lower realms afterwards as he/she will have capacity to restraint and keep precepts and fast days to create merit even in heavenly realms!
See itā€™s already hard enough to keep 5 precepts and 8 precepts of uposatha days in our life so if one can do that then one can certainly do that even in heavenly realms as a god! I have read somewhere that current Indra the king of gods can do uposatha fast for literally upto 300 days! He can literally keep 8 precepts for 300 daysā€¦and one day there is said to be of 100 human years so just imagine the level of practice of Indra. So such god who keeps precepts will definitely avoid rebirth in lower realms and may even progress to higher realms in their next life.

So yes this is good news and maybe answers your question.