Heat Pumps: What are they and How do they work?

What is a heat pump?

A typical residential heat pump is an electric appliance that heats and cools your home by moving heat rather than generating it. In summer it moves heat out of your home, and in winter it runs in reverse to pull heat from the outdoor air, or the ground, and bring it inside. Because it transfers heat instead of creating it, a heat pump can be incredibly efficient, even more energy-efficient than traditional furnaces.

How do heat pumps work?

A heat pump is a reversible refrigeration system that moves heat using a closed loop of refrigerant, a compressor, two coils (indoor/outdoor), an expansion device, a reversing valve, and fans. Instead of creating heat, it relocates the heat out of the house in summer, and into the home in the winter.

The Basics of the Cycle

  1. Evaporate: Refrigerant absorbs heat at a cold coil.
  2. Compress: The compressor boosts pressure/temperature.
  3. Condense: The hot refrigerant releases heat at the warm coil.
  4. Expand: Pressure drops so it’s ready to absorb heat again.
    The reversing valve flips which coil does which, enabling heating or cooling with the same parts.

Cooling Mode

The indoor coil acts as the evaporator, absorbing heat from indoor air and lowering its temperature and humidity. The outdoor coil acts as the condenser, rejecting heat to the outside.

The result is cool, dehumidified air inside, just like a central AC system.

Heating Mode

The reversing valve switches flow. Now the outdoor coil is the evaporator, pulling heat from cold outdoor air. The indoor coil is the condenser, releasing heat into your living space.

Modern cold-climate designs extract heat efficiently at low outdoor temperatures. Some homes pair a heat pump with a furnace in a dual-fuel setup for extreme cold snaps.

Potential Benefits of a Heat Pump System

Types of Heat Pumps

Air-Source (ASHP)

The most common. Uses outdoor air as the heat source/sink. Available as:

  • Ducted heat pumps for whole-home comfort.
  • Ductless mini-split heat pumps (single or multi-zone) for additions, sunrooms, basements, or homes without ductwork.
  • Cold-climate models designed to deliver strong heat even when temps dip well below freezing (like the Chicagoland area often does).

Geothermal / Ground-Source

Exchanges heat with the earth via buried loops. Highest efficiency, very quiet, long loop life; higher upfront cost.

Water-Source / Hydronic

Less common for single-family homes; often used in condos or larger buildings tied to a shared water loop.

Dual-Fuel (Hybrid)

A smart pairing of a heat pump with a gas furnace. The heat pump handles efficient heating most of the season; the furnace takes over only during extreme cold snaps.

Common Questions About Heat Pumps

Are heat pumps electric or gas?

Heat pumps are electric. Dual-fuel systems may include a gas furnace as backup, but the heat pump itself runs on electricity.

Upfront costs can be higher than a basic AC system. Especially if your home has very old ductwork that may need sealing. Though modern cold-climate models (or dual-fuel) are a great solution for situations like this!

Purchase price varies by type and size. Many homeowners offset costs with lower utility bills, utility rebates, and federal incentives. Hey Guy can outline options and financing.
Yes! Cold-climate air-source units, and dual-fuel setups, work great in the Chicago suburbs. Geothermal is excellent, too!
The typical life of a heat pump is around 12–15+ years for air-source, and even longer for geothermal loops with proper maintenance.