VENSAV3080 - Energy-saving materials: ground source heat pumps and air source heat pumps

Ground source heat pumps transfer energy from the natural heat stored in the earth to heat the home and domestic hot water. They can also be used to augment existing heating systems in the same way as solar panels.

Air source heat pumps use the air as a source of heat. They absorb heat from the outside or surrounding air and transfer that into useable heat in the home for space or water heating, or both. Fixed air source heat pumps can be reversed so that they can draw heat from inside a building, thus providing cooling during the summer as well as indoor heating for colder periods of the year. Only air source heat pumps that are permanently fixed and are not portable or moveable qualify as energy-saving materials.

HMRC’s understanding is that most air conditioning units are air source heat pumps. However, in cases of doubt, deciding whether any particular product is to be treated as an air source heat pump will depend on the facts of each case.

From 1 February 2024, certain preparatory work necessary for the installation of ground and water source heat pumps were brought into the relief (see VENSAV3082).

Mechanical Ventilation Heat Recovery (MVHR) systems do not qualify for the relief as they are not air source heat pumps.