People often ask whether they should get a heat pump or air conditioning, as if they were two separate technologies. They aren’t. Both move heat with a refrigerant circuit, a compressor and two heat exchangers. The Energy Saving Trust puts it simply: “Air-to-air heat pumps are sometimes referred to as air conditioning.” HMRC’s VAT Notice 708/6 goes further: “most air conditioning units are air source heat pumps.”
The useful question is which kind of heat pump suits what you want to do.
How both work
A refrigerant absorbs heat as it evaporates and gives it out as it condenses. The compressor keeps it moving. In cooling mode, the indoor unit takes heat out of the room and the outdoor unit releases it outside. In heating mode, a reversing valve swaps the roles, so the outdoor unit gathers heat from the outside air and the indoor side releases it. It’s the same idea as a fridge, which is why the back of a fridge is warm. Our plain English explainer goes through each step.
Air-to-air: what most people call air conditioning
An air-to-air system blows warm or cool air into the room through an indoor unit: wall-mounted, ceiling cassette or ducted. It works room by room or zone by zone, and it responds quickly. It doesn’t connect to radiators and, as the Energy Saving Trust notes, most don’t heat water for your taps.
It’s the right choice if you want cooling in summer with efficient heating in a few rooms, such as bedrooms, a home office or a garden room. See our air-to-air heat pumps page.
Air-to-water: what most people call a heat pump
An air-to-water heat pump heats water that runs through your radiators or underfloor heating, and usually a hot water cylinder too. It replaces a boiler and heats the whole house. Products such as Mitsubishi Electric’s Ecodan and Daikin’s Altherma ranges work this way. Some can also cool through suitable emitters, but most people choose them for heating.
The design needs a heat loss calculation, and some radiators may need upgrading. We’re MCS certified for this work; see air-to-water heat pumps.
Want it done properly? AirCon Doctor installs, repairs and services air conditioning and heat pumps across London and the South East, from our base in East Grinstead. We’re an F-Gas certified company and NICEIC approved. Get a fixed-price quote.
Side by side
| Air-to-air (air conditioning) | Air-to-water | |
|---|---|---|
| Cools | Yes | Some models, with suitable emitters |
| Heats rooms | Yes, warm air | Yes, through radiators or underfloor |
| Hot water | Mostly no | Yes, with a cylinder |
| Typical price (our ranges) | £1,200–£2,200 + VAT for one room | £8,000–£16,000, 0% VAT on homes |
| Boiler Upgrade Scheme | £2,500, strict conditions | £7,500 |
Grants: the detail that catches people out
The Boiler Upgrade Scheme in England and Wales gives £7,500 towards an air-to-water or ground source heat pump. Until March 2027 there’s an extra £1,500 for homes heated by oil or LPG with no mains gas. For air-to-air, the grant is £2,500, and the system must replace the existing fossil-fuel heating, meet the home’s full heating demand and be installed by an MCS-certified installer. It’s for homes only and can’t be an add-on next to a boiler.
So a couple of air conditioning units in a house that keeps its boiler won’t qualify. Our air-to-air grant guide covers it in full.
VAT
Under Notice 708/6, installing a permanently fixed air source heat pump in a home is zero-rated until 31 March 2027, then 5%. That covers air-to-water systems. Because HMRC says most air conditioning units are air source heat pumps, many domestic air-to-air installations can qualify too, but it depends on the facts of each case, so we confirm the VAT on your quote. Businesses and hotels pay the standard rate. This is general information, not tax advice.
Which do you need?
- Cooling for a few rooms, with heating as a bonus: air-to-air. Quicker to fit and far cheaper.
- Replacing a boiler with low-carbon heating and hot water: air-to-water.
- Both: it’s possible to combine them. We’ll look at the house and explain the options on a survey.
Our heat pump cost guide and air conditioning cost guide give the full figures, or get in touch.
Quick answers
Is air conditioning a heat pump?
Usually, yes. A reversible split system is an air-to-air heat pump, and HMRC says most air conditioning units are air source heat pumps.
Can air conditioning replace my boiler?
An air-to-air system can heat rooms but mostly can’t heat water, so most homes replacing a boiler choose an air-to-water heat pump.
Do I get the £7,500 grant for air conditioning?
No. Air-to-air heat pumps get £2,500, and only if they replace fossil-fuel heating and meet the home’s full heating demand.
Related services
More advice
- Air Source Heat Pump Cost UK 2026: Complete Guide
- The £2,500 Boiler Upgrade Scheme Grant for Air-to-Air Heat Pumps
- Air Conditioning in Winter: Using Heat Pump Mode Effectively
- How Air Conditioning Works: A Plain English Explanation
- 0% VAT on Air Conditioning and Heat Pumps: What HMRC Says
- All advice
This guide is general information, checked against the sources linked on 30 October 2026. It isn’t legal, tax or financial advice. Rules, grants and product ranges change, so check the current position before you rely on it.