Heating & Cooling

Which Heat Pumps Can be Installed Indoors?


Carefully planning where to install your heat pump is an essential step if you want the unit running at maximum efficiency. This especially true for those of you who have limited access to outdoor space and might struggle to find the appropriate location for your new unit. This leaves people turning to alternative solutions, such as having all or part of the heat pump system installed indoors.

So, can a heat pump system be installed indoors? This largely depends on the type of heat pump you are purchasing. You should not have the heat pump located in any liveable space. However, some exceptions do exist. The condenser portion of an air source heat pump system needs to be installed outside. However, the air handler portion can be installed places like interior closets, attics, basements, or any other buffer space indoors. Geothermal heat pump systems can also be installed indoors. Package heat pump systems are always installed outdoors.

The reason that condensing units need to be installed outside is due to the way the condensing unit fan operates.

  • In heating mode, the condensing unit expels cool air from the top fan.
  • The condensing unit needs to be located in a sunny location to generate the heat gains necessary for the heat pump to function properly.
  • In cooling mode, the condensing unit expels hot air fro the top fan.
  • The condensing unit is typically the loudest component of the heat pump system. Therefore the unit is installed outside to reduce indoor noise.

Heat pump systems and components that can typically be installed indoors:

Heat Pump systems and components that need to be installed outside:

  • Air Source Split Heat Pumps (Condensing unit only)
  • Dual Fuel Split Heat Pumps (Condensing unit only)
  • Air Source Package Heat Pump Systems

However, there are some things that you should consider before you go ahead and give the green light on an indoor heat pump installation. In this article, we will look at the different options available to those who wish to have an indoor installation and some advantages and disadvantages of doing so. Let’s get into it.

We’ve written an article to help identify your heat pump system at Is a Heat Pump Gas or Electric: How to Identify Your System.

Installing a Heat Pump Indoors

Heat pumps are a brilliant energy-efficient alternative to heating and cooling your home when compared to more conventional methods such as air conditioning and furnaces. If you’ve decided to opt for a heat pump, you’re making a wise move!

Let’s take a look at some of the main reasons for getting a heat pump installed indoors:

  • You don’t have anywhere else to install it

This one goes without saying, but one of the main reasons for installing your heat pump indoors will usually be out of necessity. If you have no outside space or if it simply isn’t possible to do a standard installation, then your next best bet is to move it indoors.

  • You have some buffer space or an empty room for utilities

Some homes are lucky enough to have plenty of room inside to accommodate a heat pump system without causing any inconvenience. If your home is on the smaller side, then you may have to make some sacrifices or get a little creative. 

  • If you want a safer heating/cooler system

Some of the more popular heating options run off a combustion-based system that can often cause safety issues, especially if they aren’t properly maintained. Heat pumps don’t burn anything to create heat, so there is a substantially lower risk.

  • If you want low running costs

For the same reasons mentioned above, heat pumps are considerably cheaper than combustion-based systems. In fact, the US Department of Energy states that “heat pumps can provide equivalent space conditioning at as little as one-quarter of the cost of operating conventional heating or cooling appliances.”

Even if the installation is costly, you could find that it could pay for itself after a few years of saving on the bills.

  • Energy efficient (low carbon emissions)

Heat pumps are incredibly efficient. In fact, they are the most effective form of heating using electricity at this moment in time. Pretty impressive!

Depending on what type of heat pump you decide to go for, you can reach up to 600% efficiency. This means you have a lower energy bill, and a lower carbon footprint.

  • If you want a low maintenance system

One of the main draws of heat pumps is how low maintenance they are when compared to other systems. Most of the time, you can perform regular maintenance yourself without any issues. You may find that you only have to call out a professional installer once every 3-5 years.

  • If you want versatility

Most heat pumps have both a cooling and heating functionality that you can switch between whenever you wish. This is done by reversing the process in the pump, making it produce a cooling effect in the summer months. This offers a cost-effective way to heat your home during the winter and to cool it during the summer. 

  • If you want longevity

If you are looking for a heating system that can withstand the test of time, then a heat pump is the way to go. Some of these systems can last upwards of 40 years under the right conditions, and this is with minimal maintenance. At the very least, you should see 15+ years out of your unit. This is something that can very rarely be said for AC units.

As heat pumps don’t use combustion to generate heat, it means there are no smoke or fumes circulated around your home. As the air is pushed through the system, it will pass through the filter, which will remove mold, spores, dust, and even unwanted odors. 

Things to Consider Before Indoor Heat Pump Installations

Before long, you will hopefully be heating and cooling your home much more efficiently than before, saving both your wallet and the environment. Before you do, it’s worth considering these important points before you go ahead with your installation.

  • The standard advice is to install the unit on the ground level beside your property (outside). There are a few reasons for this, but mainly because installation and maintenance will be much easier, and it also keeps the ductwork requirement to a minimum.  
  • The unit will perform much better if it is located outside as it is unobstructed and has a much larger pool of air to draw from. 
  • The room that you install the heat pump in will become inaccessible as it will turn the room/space into a freezer. The pumps have a significant heat transfer capability, which means they will substantially cool the room they are located in.
  • Air to air systems that are installed indoors are simply recycling the same air rather than using fresh air from outside. If possible, make sure you install it in a room that has access to the most ambient air.

What are the Different Types of Heat Pumps?

There are several types of heat pumps for you to choose from, each of them with their own pros and cons. Unfortunately, not all of these options will be available to everyone as they largely depend on the structure and location of your house, as well as your budget. Yep, some of these can get a little costly. Let’s take a look at the options.

Air Source Heat Pumps

Split System

These are by far the most common style of heat pump. They work by extracting heat from one source and transferring it to your home. When heating is required, the liquid refrigerant that is on the outside coil extracts the heat from the ambient air in the room and then evaporates. This then passes into the inside coil, where the gas returns to a liquid to produce warmth that can then be fed into your household heating system.

Air source heat pumps are usually the cheapest and easiest systems to install in your home, and fortunately, they tend not to take up too much space. There are two types of air source heat pumps – package and split systems.

Package Air Source Heat Pump Systems

Packaged air source systems have all the components within one unit. All of the components are housed in one package. These systems need to be installed outside, commonly on the ground or an elevated platform but they can also be installed on roofs.

Split Air Source Heat Pump System

The split air source heat pump system heat pump is split into two parts; the outdoor condensing unit and the indoor air handler unit that work together simultaneously. As a result, the outdoor unit is set up to work as both a compressor and a heat exchanger while the indoor unit works as a traditional coil and fan.

These systems can be ducted or ductless. Most models are ducted from the air handler. The ductless models are known as mini-split systems that require an indoor installation on the wall or on the ceiling paired with a small outdoor condensing unit. The wall unit is operated by remote control. These are typically reserved for small spaces under 1000 square feet.

Geothermal Heat Pump

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A geothermal heat pump, also known as a ground source heat pump, works by extracting the heat from the ground and then transferring it to your home. 

These pumps are generally more expensive to install, but they have much lower running costs due to their high levels of efficiency. This is due to the ground temperature almost always being higher than the air temperature.

Geothermal systems can be categorized into subcategories; vertical and horizontal. A horizontal system is laid out beneath the surface of your garden, and a vertical system requires boring a hole deep down into the ground. 

Depending on your lot and the terrain surrounding your house, you may be able to install one of these in your house with minimum use of outdoor space.

Water Source Heat Pump

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As you could probably guess from the name, a water source heat pump extracts heat energy from water by pumping it through a system and then transferring the energy through the house.

Unfortunately, this method requires that you have access to a nearby water source, which makes it unavailable to a large proportion of people. Most will use a well as a water source or even the public water supply.

If you have a water source close to your home, then it may be possible to implement this without the need for an outdoor unit, but this should be discussed with your installation technician.

Dual Fuel Heat Pumps

Dual fuel heat pump systems typically combine air-source or geothermal pumps with conventional heating systems. This means it uses a combination of fossil fuels (combustion) and renewable energy to heat the property. This is great for those people who have larger homes or for those that live in colder parts of the world that need a more reliable heat source in the winter.

Hybrid fuel systems are designed to suit the needs of those people who want to keep their traditional heating system while looking to cut down on their energy costs and carbon emissions.

These pumps operate based on the outside temperature. If the weather is not too cold, then the system will use the cheaper, more efficient method of heating, which will help to save on costs. However, when the temperature dips, the combustion system will come into use and heat your home.

This method is excellent for those who are looking for some extra versatility. If you want to be able to customize where the units are placed, then a split system is the best bet for you. With a split system heat pump, everything can be coordinated based on the property’s layout, but you will still need to have one of the units outside, which is something to bear in mind.

Advantages and Disadvantages of Installing Heat Pumps Indoors

As we have mentioned several times throughout this article, there are several factors to consider if you are to install your heat pump indoors. Below we have drawn up a table of the main advantages and disadvantages for you to think about before you make your decision.

No eyesore outside of the propertyComplicated to install
Protects the unit from adverse weather conditionsThe room where you install the heat pump will become extremely cold
Easier to access the unit for simple repairsThe unit will be noisier than if it were placed outside
The unit will typically last much longer as it won’t be exposed to the elementsCan often be more expensive to install due to the added complexity of installation

Thinking a heat pump may add value to your home? See our article Will a Heat Pump Add Value to Your Home? In it, we discuss whether or not a new heat pump will increase the value of your home.

How to Improve the Efficiency of an Indoor Heat Pump Installation

If you decide to go ahead and pull the trigger on an indoor heat pump installation, then you should optimize a few things to make sure you get the absolute best out of your investment. 

As we have mentioned several times, your unit may not perform as well as it would with an outdoor installation, but don’t worry, there are a few tips and tricks you can follow to try and mitigate those losses.

  • Choose the area of installation wisely.

This point cannot be stressed enough. Choose an unobstructed area that has access to plenty of ambient air. It’s advised that this room is unused as it will become extremely cold due to the heat transferring properties of the heat pump. Attic spaces, basements, and crawl spaces are the best candidates in most homes.

  • Add insulation to your attic and walls.

Inadequate insulation in your home means that heat will escape unnecessarily. This means higher amounts of heat penetration in the summer and heat loss in the winter which is something we want to avoid. Make sure all the areas of your home are insulated, especially your attic, basement, and all your exterior walls.

  • Properly seal the ductwork.

If any areas of the ductwork have leaks, then you will have a decreased airflow. This means that your system will be running sub-optimally, and this needs to be fixed as soon as possible. You can try and do this yourself, depending on the location of the duct, or you can hire a technician to seal the duct professionally.

  • Perform routine maintenance

As your unit won’t be pulling from the largest pool of ambient air, you need to make sure all of the components are working at full capacity. You should regularly service the unit by cleaning the filters, replacing the refrigerant, and cleansing the pump. These are all straightforward steps, but they go a long way towards improving the airflow and efficiency of your heat pump system.

  • For better cooling, add a radiant heat barrier on the underside of your roof.

The amount of heat that builds in the attic can often be extreme. If you add a radiant heat barrier to the underside of your roof, some of this heat will be reflected back, meaning that your heat pump doesn’t have to work as hard to cool your home. This is crucial if your pump is located in your attic.

Final Word

So there you have it! We hope by now, you have all of the information you need to make an informed choice on what is the best heat pump for your home. While they are challenging, indoor heat pump installations are possible if you plan ahead and consider all of the points we have raised throughout this article.

Remember, each home is different, so make sure you contact your local technician for more advice on the options that are available to your property.


Hubert Miles | Licensed Home Inspector, CMI, CPI

Hubert Miles is a licensed home inspector (RBI# 2556) with more than two decades of experience in inspection and construction. Since 2008, he has been serving South Carolina through his company, Patriot Home Inspections LLC. As a Certified Master Inspector, Hubert is dedicated to providing his expertise in home inspections, repairs, maintenance, and DIY projects.