The government have announced a new Green Tax Cut to encourage people across the country to invest in sustainable forms of living.

Announced in the Spring Statement by chancellor Rishi Sunak, the initiative will use a Zero VAT incentive to reward homeowners for installing heat pumps, solar panels and proper insulation.

Heat pumps are becoming increasingly popular as a renewable form of energy in many UK households, but relatively few people are familiar with the technology.

Heat pumps are a more environmentally friendly alternative to gas boilers as a way to heat homes and buildings.

They work by extracting heat from the surrounding environment, whether that be from the ground or the air.

Luckily for the UK, the tech is well-suited to work in low temperatures, creating about three times as much energy as they use.

You can install an air source heat pump, which looks like an air conditioning unit, on the outside of your house.

For those that would prefer a hidden appliance, you can also install ground source heat pumps which run for meters underground – either deep into the soil or parallel to the ground.

An air source heat pump works like a fridge in reverse, using electricity to pull energy from the outside air before warming it up with a compressor.

Ground source heat pumps act in a similar way, using meters of high-density pipes to extract energy from the soil.

The main difference between a heat pump and a traditional boiler is that these devices do not fire up quickly, and so they work particularly well when installed in well-insulated homes with underfloor heating.

The typical cost of a heat pump ranges from £4,000-£8,000, depending on the brand and heat output.

Installation also costs anywhere from £5,000 to £10,000.

Mr Sunak announced the Green Tax Cut in the spring statement on Wednesday 23 March.

This means that for the next five years, homeowners will pay zero VAT when installing heat pumps and solar panels.

Rishi Sunak claims that this will help to cut the red tape and help reinstate wind and water turbines as qualifying technologies.

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