According to a report published by the Environment Agency, it is possible to produce almost one third of Britain’s renewable heat, using underground energy.

The report says that by using ground source heat pumps, homeowners and businesses could be paid to produce their own heat to regulate temperature in buildings and provide hot water.

Currently, UK has just 8,000 of these pumps, but it is believed that almost 1.2 million could be installed to heat 11 per cent of homes and 40 per cent of commercial buildings if the government decided to support them.

The renewable heat incentive will be in place in April 2011 to give financial assistance to those who generate their own renewable heat.

Right now, only 0.6% of all heat is generated from renewable heat sources. This will have to increase to 12%, for Britain to meet its binding EU targets by 2020.

Although the heat pumps are not carbon neutral, as they do need electricity to run, however they can generate up to four times the amount of energy they use.

They have already become more popular in London, where they are used to power large developments in order to satisfy the sustainable energy policy to reduce carbon emissions by using onsite renewable energy generation.

Ground source heat technology is quite common in Sweden as it uses energy stored in the ground. But the electricity distribution network in Britain would need upgrading to facilitate the installation of larger heat pumps if the government was to commit to the technology.