As a general rule heat pumps require some form of outdoor installation be it from a ground source heat pump or an outdoor unit for an air source heat pump. Some air source heat pump will in some cases, however, only require the need for an indoor unit.
How do indoor heat pumps work?
An example of an indoor heat pump can be seen when looking at an air to water heat pump. This unit can be installed against the external wall of a property, to gather air (heat) from the outside which is in turn used to heat the wet central heating system within.
The heat or energy is sourced with the use of air ducts. In order to protect this system, insulation is place around the opening, which is also protected by a rain guard.
The benefits of indoor heat pumps
An indoor heat pump can be installed easily and practically in rooms such as the garage, utility room or basement. The option for indoor installation is an effective solution if you do not wish to have a unit sited in your garden.
As the system is indoor there is less need for protection against the elements and therefore less maintenance.
The negatives of indoor heat pumps
Having a system installed outside your property means you are at less risk from any noise created by the heat pump.
It is also arguable that a unit installed outside will be more effective as it has a greater exposure to the heating source, in this case being air.