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If your air source heat pump is installed as a single unit, then it cannot be indoors. This is known as a packaged system.
The alternative is a split system with the condensing unit separated from the air handling unit. In this case, you can put the air handler inside the house.
However, the condenser must be outside. This article gives a clear and simple explanation of why. We’ll also give you tips on where to install your unit.
Why Can’t Air Source Heat Pumps Be Installed Indoors?
You’ll understand why with a simple explanation of what an air source heat pump does in order to heat your house.
Here is an annotated diagram of a single unit.
You can see in step 1 that the air from the outside is drawn in through the sides of the unit. The air is also drawn in through the back of this unit.

I’m not showing the second and third steps of the process that converts the air from outside into heat for your house.
This is because it happens inside the unit, so you can’t see it in this diagram.
How is outside air converted into heat?
There is a condenser component inside that takes the outside air and evaporates it into steam.
A compressor further increases the pressure, which raises the temperature of the steam.
This is step four of the process.
How does the heated air move into your house?
The hot steam is pumped and transferred through piping into your house.
This section of the unit is known as the air handler. The air handler could be inside your house if it is separate from the condenser.
This is step three of the process.
What happens to the extracted cold air?
As the evaporated steam moves into your house, the cold air has to go somewhere.
The fan at the front of the unit expels this cold air back into the open.
Why can’t the compressor be inside the house?
When the unit is outside, the expelled cold air simply dissipates into the open space.
You’ll notice a cold patch near the unit, and you shouldn’t try to cultivate plants nearby. But it quickly levels to normal air temperature.
Now think about this in an enclosed space. The cold air is trapped and will turn the space into a refrigerator.
This means that the unit would be sucking in this colder air and expelling it again at an even lower temperature. And so on until the unit couldn’t possibly be strong enough to keep heating what it’s taking in.

Can You Put An Air Source Heat Pump In The Attic?
You should not put a packaged air source heat pump in the attic.
The reason is that this type of heat pump draws in the outside air, extracts the heat, and expels the remaining cold air.
Therefore you want to surround the unit with as much ambient air as possible.
People may hope that their attic is big enough, but the enclosed space of an attic is still too small for the condenser component.
Your attic would quickly into a refrigerator. The surrounding air would become too cold for the unit to heat it effectively.
Where Should The Air Source Heat Pump Be Located?
You want to ensure that the condenser part of the air source heat pump is surrounded by a large pool of ambient air.
There should also be some airflow so that the same air isn’t being recycled through the unit.
This means that you should avoid putting the pump in an alleyway with little airflow.
I also don’t think that the scenario in the picture below is ideal. The householder has chosen to put the unit in a semi-enclosed space outside the house.
This choice may be to minimize the noise – but there are other ways to make these air source heat pumps less noisy.
Personally, I want to give enough open air to the unit to make it most effective.
Some people choose to site them on an elevated platform. This may be due to a small garden.
Some units are attached to the house wall at an elevated height. Here is an example.
It’s also possible to install the unit on the roof.

Most common placement
Most units are installed on the ground within a short distance from the house wall.
However, you should also give careful thought to the noise aspect. Your choice can minimize intrusive noise being transferred into the house.
Check out our article on avoiding noisy air source heat pumps.
Installing The Air Handler Of The Heat Pump Inside The House
You can buy a split system that has the condenser unit separated from the air handler unit.
The condenser must be installed outside, but you can install the air handler unit inside the house.
This should not be in a livable space e.g. within the kitchen. Here are some good options for locating the air handler:
- attic
- basement
- closet
- crawl space