A heat pump is an HVAC system that heats and cools your home by moving heat rather than generating it. It transfers heat into your home in winter and removes it in summer. In moderate climates, a heat pump can serve as an efficient, all-in-one alternative to furnaces and air conditioning for year-round comfort.
How Does a Heat Pump Work?
Heat naturally flows from warmer to cooler areas, and heat pumps work by using this basic principle of thermodynamics.
Cooling Mode
The refrigerant inside the evaporator coil absorbs heat from the indoor air, converting from liquid to gas. This warm gas is sent to the compressor, where it is pressurized and further heated. The hot refrigerant then flows to the condenser coil, where it releases heat outdoors. The resulting cooled air is circulated back into your home through ductwork in a central system or via an air handler in a mini-split system.
Heating Mode
In heating mode, the reversing valve reverses the refrigerant flow so the system extracts heat from the outdoor air and delivers it indoors. The outdoor coil becomes the evaporator, where the refrigerant absorbs heat and becomes a vapor. After compression, the hot gas moves to the indoor coil, now acting as the condenser, where it releases heat to warm the home. The refrigerant then cools, returns to a liquid, and circulates back outside to continue the cycle.
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Types of Heat Pumps
Heat pumps are categorized by how they deliver air (ducted or ductless) and their heat source.
Air-Source Heat Pumps
Air-source heat pumps transfer heat between your home and the outdoor air. In colder regions, standard air-source heat pumps may struggle to maintain heating output. To address this, cold-climate heat pumps (CCHPs) are built. They can deliver reliable heating at very low outdoor temperatures, often down to 5°F.
Air-source heat pumps are further categorized into:
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Ducted Heat Pumps: They use a network of ducts to heat or cool the entire home.
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Ductless Heat Pumps: They do not require any ducts. One or more indoor units provide zoned heating or cooling.
Geothermal Heat Pumps
Geothermal heat pumps use the earth’s stable underground temperature to transfer heat rather than create it. A buried loop system absorbs heat in winter and releases it back into the ground in summer. Because underground temperatures remain relatively constant year-round, geothermal systems are extremely efficient, reliable, and effective for both heating and cooling.
Water-Source Heat Pumps
Water-source heat pumps exchange heat with a nearby water source such as a well, lake, pond, or a closed-loop water system. Instead of using outdoor air, these systems rely on water’s stable temperature to improve efficiency. They are commonly used in commercial buildings, apartment complexes, and campuses, but can also be used in residential settings where a suitable water source is available.
Dual-Fuel Heat Pumps
Dual-fuel or hybrid HVAC systems pair an air-source heat pump with a furnace, usually gas or propane. The system automatically switches between the two based on which option is more efficient, taking outdoor weather conditions into account.
Heat Pump Cost
Installation cost varies based on system capacity, efficiency rating, staging, and installation complexity. Ducted heat pumps average $15,326, ductless mini-splits $19,556, and hybrid setups $15,712. Additional expenses may arise from duct repairs, new ductwork, or replacing an existing AC–furnace setup. The best way to determine exact pricing is to obtain a quote tailored to your home’s needs.