The most familiar type of heat pump is the Ground Source Heat Pump (GSHP). A machine designed to extract geothermal energy from the earth’s core, by circulating a mixture of water and antifreeze through a series of buried pipes called a ground loop, either laid flat below the surface of your garden, or sunk deep into a bore hole to save space.

Heat from the ground is absorbed into the fluid and then pumped through a heat exchanger inside the GSHP, which also contains a refrigeration system and compressor to magnify the low grade heat to provide hot water. The hot water is then pumped through your central heating system like a conventional boiler to provide domestic hot water and space heating.

An Air Source Heat Pump (ASHP) works in the same way, only instead of extracting geothermal heat from the ground it pumps latent heat from the outside air, meaning you don’t need to bury pipes or bore a hole. While ground source heat pumps are generally more efficient and provide more heat, air source heat pumps cost less and are easier to install.

Visit the Energy Saving Trust for a more detailed explanation:

• Click here for Air Source Heat Pumps
• Click here for Ground Source Heat Pumps

Generally ground source heat pumps are cheaper to operate, require very little (if any) maintenance, have a higher Coefficient of Performance (up to 400% efficient), and will provide more consistent heat regardless of the weather.

Air source heat pumps cost around two thirds of the price and do not require buried pipes or bore holes, meaning there're cheaper and easier to install. ASHP's typically have a lower CoP making them up to 300% efficient.

In a mild climate you will notice little difference between the two. In colder climates a ground source heat pump would typically provide more heat at a consistent temperature. In warmer climates an air source heat pump could prove more flexible. For example, our units can be programmed to warm your water in the morning, then reverse to cool your air in the afternoon. If you’re fortunate enough to own a swimming pool, they'll keep your water warm for a fraction of the cost of oil, gas or electric heaters.

If you’re installing a heat pump to reduce your carbon foot print, considering switching to a renewable electricity supplier. While heat pumps are typically 300% to 400% efficient, meaning one unit of electricity produces 3 or 4 units of heat, sadly most power stations are only 30% efficient, meaning they require 3 units of fossil fuel to produce one unit of electricity. So unless your heat pump runs on green electricity, it's only helping the planet by compensating for power station inefficiencies.

If you want to be really green try National Trusts green energy by Npower.

If you’re a private house holder the short answer is ‘coming soon’. Renewable Heat Incentives (RHI) are scheduled to be 'in place for April 2011'. To quote the Department of Energy and Climate Change:

"“The scheme should support a range of technologies, including air and ground-source heat pumps”

Here are some quotes from DECC:

"What does the financial support cover? The tariffs have been calculated to bridge the financial gap between the cost of conventional and renewable heat systems at all scales, with additional compensation for certain technologies for an element of the non-financial cost (e.g. the disruption of digging up a garden to install a ground source heat pump), plus an investment rate of return of 12% across all technologies and 6% for solar thermal."

"Will existing installations be eligible for RHI? Under our current proposals, if your renewable heat system was completed after 15 July 2009 (which is the date the Renewable Energy Strategy was published) and meets the other qualifying conditions of the scheme then you will be able to claim the RHI. If you installed before 15 July 2009, under our current proposals, then you are outside the scope of this scheme."

For more RHI details see the DECC's RHI - Frequently Asked Questions