Why heat pumps could be good for business

As a certified B Corp, environmental consultancy Green Element is well placed to reveal how investing in low-carbon heat pumps could cut costs while being kinder to the planet.

What is a heat pump?

A heat pump extracts energy from the air, ground or water around a building. This energy can then be processed and used to heat the property and water.

Types of heat pumps

  • Air-source heat pumps (ASHPs) remove low-level heat from the air and convert it to high-grade heat. Installation includes an outdoor unit that collects heat, transfers it to a refrigerant, which passes it through a heat exchanger to heat properties and/or water. There are two types: air-to-water and air-to-air.
  • Ground-source heat pumps (GSHPs) draw on energy via a network of pipework buried underground outside your business premises. Water and antifreeze travel around the loop of pipe absorbing the energy from the ground, which then passes through a heat exchanger and on to the property.
  • For those businesses located close to a suitable area of water, such as a pond, river, lake or the sea, the extraction process can be carried out using water-source heat pumps.

Planning permission may be required so it’s always worth checking with your local authority.

The UK’s net zero strategy

As part of a roadmap to net zero, a report by the International Energy Agency recommended that no new fossil fuel boilers should be sold from 2025 if we are to reach net zero by 2050. Globally, there has been increased research, new policy and higher sales to drive greater heat pump adoption.

According to the Carbon Trust, heat pumps in England use 55-65% less carbon than an A-rated gas boiler, with this increasing to 100% if the electricity used to power the pump is renewable.

Against a background of escalating fossil fuel prices, the UK government is focusing on incentives, and tailoring policy to support building decarbonisation. And slowly but surely the advantages of heat pumps are becoming more accessible.

The government recently revealed the winners of a £9.2m funding scheme to help set up just under 9,000 accredited training courses across England. These will arm tradespeople with the skills necessary to deliver energy efficient solutions, including tasks such as heat pump installation.

How much does it cost?

Typical installation prices in small buildings tend to be from around £4,000 to £10,000 for ASHPs but some energy providers are now working on and offering cheaper alternatives.


The Boiler Upgrade Scheme

In April 2022 the UK government’s Department for Business, Energy & Industrial Strategy (BEIS) and Ofgem launched its three-year Boiler Upgrade Scheme in England and Wales, in a bid to make this change more affordable. Under the scheme, owners could get one grant per property as follows:

  1. £5,000 towards the price and installation of an air source heat pump.
  2. £6,000 towards the cost and installation of a ground source heat pump.

You will need to apply for this potential grant and your property must have a valid Energy Performance Certificate (EPC) to qualify. An MSC certified installer can advise you on whether your property would be suitable.



If you hold a climate change agreement with the Environment Agency, you can receive a discount on a climate change levy, which is a tax added to electricity and fuel bills.

Why would my business benefit from a heat pump?

  • A greener, cleaner option – heat pumps are typically more environmentally friendly than traditional heating systems and their use can boost environmental, sustainable and governance (ESG) reporting. They would usually fall under ‘Scope 2’ of the Greenhouse Gas Protocol international greenhouse reporting standards.
  • Role reversal – an air-to-air heat pump can be used as a cooling system in the warmer months of the year.
  • You could see lower energy bills, particularly with market fluctuations and any use of solar panels or wind to boost electricity generation.
  • From 2022, there is no VAT to pay on installation for five years.

How do I get my property ready for a heat pump?

Before pressing ahead, Green Element advises businesses to take time to consider their overall energy efficiency:

  • Ensure your building is running efficiently by improving insulation and draught proofing, for example, as heat pumps are best when working at a lower temperature.
  • Give some thought to the new system’s design: Heat pumps require an area where there is enough space for a good airflow (or enough space to bury underground for a GSHP). Space heating works well with underfloor heating and radiators with larger surface areas help transmit more heat.
  • Green Element points out that heat pumps can be used for both heating and cooling, and this can extend to assist the industrial processes of heating, cooling and drying, as well as boiler pre-heating.
  • Renewable boost: When powering a cooling unit, high cooling demand can be assisted by solar panels for maximum impact as the time of day when solar output is high usually coincides with demand for cooler temperatures.

Getting everyone on board

Having reached certified B Corp status, verified by B Lab, a non-profit organisation dedicated to reaching high standards of social and environmental performance, Green Element operates within its own carefully selected standards.

When advising on implementing environmental management strategies, it encourages businesses to get staff on board. This allows all employees to feel part of a company making positive change while also keeping financial impacts transparent.

In addition, customers will warm towards businesses with green credentials who are engaged with their colleagues and communities.

Download the guide

Download Green Element’s guide Decarbonising Heat Through Heat Pumps here (PDF, 1.2MB).

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