Air-to-air heat pumps:the £2,500 grant, the costs and the catch

How is an air-to-air heat pump different from one that runs radiators?

Both types take heat from outside air using a refrigerant circuit and a compressor; the difference is where the heat goes. An air-to-water heat pump, the usual kind in UK homes, heats water that flows through radiators or underfloor pipes and into a hot water cylinder. An air-to-air system sends refrigerant through pipes to one or more indoor units, usually mounted high on a wall, which blow warm air into the room.

What does the Boiler Upgrade Scheme pay, and what are the conditions?

Ofgem's guidance for applications made on or after 28 April 2026 sets the grant at £2,500 for an air-to-air heat pump, in residential properties only. The main conditions are the same as for other heat pumps, with one or two that matter more for air-to-air:

• You must own the property. Owner-occupied homes, homes let to tenants, second homes, holiday homes and park homes all count.
• The system being replaced must be fossil fuel heating (such as gas, oil, LPG or coal) or electric heating that does not include a heat pump, for example storage heaters, panel heaters or an electric boiler.
• The heat pump must have enough capacity to meet 100% of the home's space heating needs on its own. In practice that means heating the whole home, not one room.
• The heat pump plus any supplementary appliances must be able to meet the full space heating and hot water demand. Supplementary appliances, such as an immersion heater or a hot water heat pump, are allowed but must not be fossil fuel based.
• It must fully replace the existing fossil fuel or electric heating, apart from permitted supplementary appliances. Fossil fuel hybrids are not eligible.
• The installer and the installation must be MCS certified. Capacity is capped at 45 kWth for a single system, or 70 kWth for two or more heat pumps serving one home.
• Only one grant per property, and not if the home has already had public funding for a heat pump.

Your installer applies on your behalf and must take the grant off your quote. The voucher for an air-to-air heat pump is valid for three months. There is more on how the scheme works in the Boiler Upgrade Scheme explained, and you can run the BUS eligibility checker in about a minute.

How will you heat your hot water?

This is the catch most people miss. The Energy Saving Trust notes that most air-to-air systems do not provide hot water for taps and showers. Its suggested alternatives are:

• a hot water cylinder with an electric immersion heater
• an electric shower or point-of-use water heaters
• one of the few air-to-air models that can also heat a cylinder
• solar water heating, backed by an immersion heater for duller months

If you want the grant, the hot water answer has to fit the scheme too. Because the grant-funded system must fully replace fossil fuel heating and supplementary appliances cannot burn fossil fuel, keeping a gas combi just for hot water does not fit the rules as Ofgem has written them. Ask your installer to show how hot water is covered before you commit. Heating water with a direct electric immersion costs roughly three times as much per unit of heat as a heat pump, which matters for households that use a lot of hot water.

What does an air-to-air heat pump cost to install and run?

Those figures may not cover a new hot water arrangement or redecorating, and a single-room unit would not qualify for the grant. Smart Energie does not publish a price for air-to-air systems; any quote would follow a survey.

Running costs depend on the efficiency the system actually achieves, and the Energy Saving Trust says there is not yet much data on how air-to-air systems perform in UK homes. The table below shows what one unit of heat costs at the Ofgem price cap for October to December 2026, at a range of efficiencies. The air-to-air efficiencies are assumptions for illustration, not measured results. For context, the Energy Saving Trust's July 2026 research found a median seasonal performance of 2.76 across 546 monitored air-to-water heat pumps.

The clearest saving is against direct electric heating, where even a modest heat pump cuts the cost of each unit of heat by around two thirds. Against gas the margin is narrow and depends on efficiency, although dropping your gas supply entirely also removes the gas standing charge of 29.68p a day under the same cap. Electricity currently carries no VAT from 1 October 2026 to 31 March 2027. Our running costs guide works through this in more detail.

Can it cool your home, and should you use it that way?

Yes, air-to-air heat pumps can be set up to cool as well as heat, which is a real advantage in homes that overheat, such as top-floor flats. Cooling uses electricity, though. The Energy Saving Trust advises trying passive measures first, such as shading and better ventilation, and only then setting the heat pump to cool. Indoor units recirculate room air, so you still need to ventilate as normal.

Who is allowed to install one?

Air-to-air systems contain fluorinated refrigerant (F gas), and the pipework between the indoor and outdoor units is connected on site. GOV.UK guidance says anyone who installs, services or recovers refrigerant from stationary air conditioning and heat pump systems needs a personal F gas qualification. A category 1 certificate covers all activities; category 2 covers installing and servicing systems holding less than 3 kg of F gas, or less than 6 kg if hermetically sealed. Companies, including sole traders, working on equipment operated by others must also hold company certification. Ask for both, plus the MCS certificate for air-to-air, before work starts.

Do you need planning permission in England?

Usually not for a house. Class G of the General Permitted Development Order covers air source heat pumps on homes, and air-to-air units are air source heat pumps. The main limits: the outdoor unit must be no bigger than 1.5 cubic metres on a house (0.6 on a block of flats), only one unit is allowed (two on a detached house, one per block of flats), it must pass the MCS 020(a) noise calculation, and it must not sit on a pitched roof. Listed buildings and some conservation area positions need permission.

One condition matters more for air-to-air: the heat pump must not be used solely for cooling. A unit installed purely as air conditioning falls outside permitted development. Our planning permission guide covers the full rules, including flats.

When does air-to-air make sense, and when does it not?

It is more likely to suit you if:

• you live in a flat, park home or small house with no radiators, currently heated by storage or panel heaters
• your hot water already comes from an electric cylinder or electric shower
• you have limited outdoor space, since outdoor units are typically smaller than air-to-water ones
• your home gets uncomfortably hot in summer

An air-to-water system is usually the better fit if:

• you already have radiators and a gas boiler, where a £7,500 grant and a cylinder heated by the heat pump often make more sense
• your household uses a lot of hot water
• you want heat in every room without a fan unit on the wall in each one
• you are sensitive to indoor noise, which the Energy Saving Trust lists as a drawback of indoor units

If you are unsure which suits your home, plan your retrofit and compare both before you get quotes.

Common questions