Heat pumps move warmth from one place to another instead of generating it from scratch

A heat pump is a machine that pulls heat energy from the air, ground, or water outside your home and moves it indoors during winter. In summer, it reverses direction and pulls heat out of your home to cool it down. Unlike a furnace that burns fuel to create heat, a heat pump straightforward relocates existing heat—which is why it uses less energy than traditional heating and cooling systems.

The core idea is straightforward: heat exists everywhere, even in cold air. A heat pump captures that heat using refrigerant (a special fluid that changes between liquid and gas), compresses it to raise the temperature, and releases it inside your home. When you switch to cooling mode, the same cycle runs backward, moving indoor heat outside.

Key Takeaways

  • Heat pumps move existing heat rather than creating it, so they work year-round for both heating and cooling with one system.
  • Air-source heat pumps pull heat from outdoor air and work in most climates; ground-source heat pumps pull from soil and cost more upfront but use less energy.
  • Heat pumps use electricity to move heat, so they cost less to run than furnaces that burn natural gas or oil, especially if your electricity is cheap.
  • A heat pump loses efficiency in very cold weather below 25°F, which is why cold-climate models and backup heating exist.
  • Installation requires removing or replacing your old heating system and may need new ductwork or indoor units, so costs vary widely by home type.

How the heating cycle works in winter

When outdoor temperatures drop, your heat pump's outdoor unit contains a coil filled with refrigerant. This coil absorbs heat from the outside air—even when it feels freezing to you. The refrigerant carries that heat to a compressor, which squeezes it and raises its temperature to 100°F or higher. The now-hot refrigerant flows to an indoor coil, where a fan blows your home's air across it, warming the air and sending it through your ducts or directly into rooms.

The refrigerant cools as it releases heat indoors, then flows back outside to the outdoor coil to repeat the cycle. This process continues as long as the thermostat calls for heat. Because the heat pump is moving heat rather than creating it through combustion, it delivers more warmth energy than the electricity it consumes—typically 2 to 4 times as much, depending on outdoor temperature and the model.

How the cooling cycle works in summer

In cooling mode, the heat pump reverses its operation. The indoor coil now absorbs heat from your home's air, and the refrigerant carries that heat outdoors to the outdoor unit. The outdoor coil releases the heat into the outside air, and cool refrigerant returns indoors to absorb more heat. A drain line removes moisture that condenses on the indoor coil, similar to how an air conditioner works.

Because a heat pump cools and heats with the same equipment, you have one system to maintain instead of a separate furnace and air conditioner. Many homeowners find this simpler and more reliable than managing two machines.

Air-source versus ground-source heat pumps

Air-source heat pumps pull heat from outdoor air and are the most common type. They cost $4,000 to $8,000 to install (before incentives) and work in most climates. They lose some efficiency when outdoor temperatures drop below 25°F, which is why manufacturers make cold-climate models with larger compressors and backup electric heating strips.

Ground-source heat pumps (also called geothermal) pull heat from soil or groundwater, which stays around 50°F year-round. They maintain high efficiency even in harsh winters and use less electricity overall, but installation costs $15,000 to $25,000 because workers must dig trenches or drill wells. Ground-source makes sense if you have space for loops and plan to stay in your home for many years.

A third type, water-source heat pumps, pull from a pond or lake and are rare in residential settings. Most homeowners choose air-source because the cost is lower and installation is faster.

Why heat pumps use less energy than furnaces

A natural gas furnace burns fuel and converts roughly 80 to 95 percent of that fuel's energy into heat—the rest escapes up the chimney. A heat pump, by contrast, moves heat that already exists, so it can deliver 200 to 400 percent of the electrical energy it uses. If your electricity comes from renewable sources or is cheaper than natural gas in your area, the savings are even larger.

The trade-off is that heat pumps work best when temperature differences are small. On a 35°F day, a heat pump is highly efficient. On a 0°F day, it still works but uses more electricity to move heat across a larger temperature gap. This is why cold-climate heat pumps include a backup heating element—on the coldest days, the system switches to electric resistance heat to maintain comfort without straining the compressor.

What happens when it gets very cold

Below 25°F, most standard air-source heat pumps lose efficiency rapidly. The outdoor coil can frost over, and the temperature difference between outside and inside grows so large that moving heat becomes energy-intensive. To handle this, cold-climate heat pumps use a larger compressor, higher-capacity outdoor coils, and a defrost cycle that temporarily reverses the refrigerant flow to melt frost buildup.

Many heat pump systems also include a backup electric heating element (called auxiliary or emergency heat) that kicks in automatically when outdoor temperatures drop below a set point—usually 25°F to 35°F depending on the model. This element heats like a space heater and uses more electricity, but it ensures your home stays warm without overworking the compressor. You can also set your thermostat to switch to backup heat manually if you want to save electricity on milder days.

Installation and what to expect

Installing a heat pump means removing your old furnace and air conditioner (or just one if you only had a furnace). If your home has existing ductwork in good condition, the indoor unit can connect to those ducts. If you have baseboard heating or no ducts, installers can add a ductless system with wall-mounted indoor units in each room, or they can run new ducts through your home—a bigger job that takes longer and costs more.

The outdoor unit sits on a concrete pad near your home, similar to an air conditioner. Refrigerant lines and electrical wiring run between indoor and outdoor units. Installation typically takes one to three days. You will need a licensed HVAC contractor, and many regions require permits and inspections before the system can operate.

Frequently Asked Questions

Do heat pumps work in freezing weather?

Yes, but with reduced efficiency. Standard heat pumps work down to about 25°F; cold-climate models work to 0°F or lower. Below those temperatures, backup electric heating turns on automatically. The system still heats your home, but electricity use increases on the coldest days.

Can I use a heat pump if I have radiators or baseboard heat?

Yes, but you will need a ductless (mini-split) system with wall-mounted indoor units instead of connecting to ducts. Each room gets its own unit, and you control temperature room by room. Installation is faster and less disruptive than adding ducts.

How much does a heat pump cost to run compared to a gas furnace?

Costs depend on local electricity and gas prices, but heat pumps typically cost 30 to 50 percent less to operate annually. The advantage grows larger in milder climates where the heat pump rarely needs backup heating. In very cold regions, the savings shrink but usually remain positive.

What is the difference between a heat pump and an air conditioner?

An air conditioner only cools; a heat pump cools and heats. Both use the same refrigerant cycle, but a heat pump has a reversing valve that lets it run backward in winter. If you have an air conditioner now, a heat pump can replace it and provide heating too.

Do I need to replace my ductwork to install a heat pump?

Not always. If your ducts are sealed, insulated, and in good condition, the heat pump can use them. If ducts are leaky, undersized, or missing in some rooms, the installer may recommend repairs or a ductless system instead. An energy audit can tell you whether your ducts are adequate.