One machine, one refrigerant loop, and a reversing valve that decides whether you get heating or air conditioning. Everything else, ducted, ductless, dual fuel, geothermal, is a variation on that same loop.
The refrigerant loop, live
Same loop, same components, both directions. Only the reversing valve moves.
How a heat pump actually works
A refrigerant loop runs between an outdoor unit and an indoor unit. Compressing the refrigerant makes it hot; letting it expand makes it cold. Point that hot end indoors and you have heating; flip a valve and point it outdoors and you have air conditioning.
1
Outdoors, refrigerant absorbs heat
Very cold liquid refrigerant runs through the outdoor coil. Even 20°F air is warmer than that refrigerant, so heat flows into it and it boils into a gas.
2
The compressor squeezes it
Compressing the gas concentrates that diffuse warmth into a small, genuinely hot stream, well above room temperature. This is the only step that uses real electricity.
3
Indoors, it releases the heat
The hot gas passes through the indoor coil, your blower moves house air across it, and the refrigerant condenses back to liquid as it gives up its heat.
4
In summer, the loop reverses
A reversing valve swaps which coil is hot. Now heat is collected from inside your house and dumped outdoors, that is exactly what an air conditioner does.
Heating mode
Outdoors
Outdoor coil
absorbs heat from cold air
20°F
hot gas →
Indoors
Indoor coil
releases it into the house
95°F
COMPRESSOR
← cold liquid returns
expansion valve
Cooling mode
The reversing valve swaps the two coils' roles. The indoor coil now absorbs heat at ~45°F and the outdoor coil dumps it at ~120°F. Nothing else about the machine changes.
Why efficiency can exceed 100%
A furnace can only ever return a fraction of the energy in its fuel. A heat pump isn't converting energy into heat, it's using energy to relocate heat, so one unit of electricity can move three or four units of heat.
What each part actually does
Four components, working together in a closed loop. None of them are optional, and knowing what each one does makes a contractor's explanation, or a spec sheet, much easier to parse.
Compressor
The only part that consumes significant electricity. It squeezes low-pressure gas into a small, hot, high-pressure stream, the step that makes heating possible.
Reversing valve
A four-way valve that swaps which coil is the condenser (hot) and which is the evaporator (cold). Flip it and the identical hardware switches from heating to air conditioning.
Expansion valve
A metering device that drops the refrigerant's pressure right before it enters the cold coil, which is what lets it absorb heat from air that feels cold to us.
Coils (indoor & outdoor)
Simple heat exchangers. Whichever one is acting as the condenser this cycle releases heat; whichever is the evaporator absorbs it. Airflow across both is what makes them work.
The four kinds you'll be quoted
Which one fits depends on whether your house already has ductwork, how cold your winters get, and how much you can spend up front.
Ducted air-source
The straight swap if you already have a furnace and ducts. One outdoor unit, one indoor air handler.
Typical: $12k–$20k Best for: existing ducts
Ductless mini-split
Indoor heads mounted room by room. No ducts needed, and every room gets its own thermostat.
Typical: $4k–$6k per zone Best for: no ductwork
Dual fuel / hybrid
Heat pump handles most of the year; the existing gas furnace takes over on the coldest nights.
Typical: $14k–$22k Best for: cold climates
Ground-source (geothermal)
Trades heat with the ground instead of the air. The most efficient option and the most expensive to install.
Typical: $20k–$40k Best for: land + long stay
Cold-climate performance
A cold-climate model holds most of its rated capacity down to about 5°F. What matters is the balance point: the outdoor temperature where the heat pump alone can no longer keep up. Below that, backup heat, electric strip heat or a paired furnace, takes over automatically. See how the two compare in vs. furnace & AC.
Sizing it correctly
A heat pump sized off a rule of thumb instead of a room-by-room Manual J load calculation is the single most common cause of a system that runs poorly. Undersized and it leans on expensive backup heat; oversized and it short-cycles, hurting both comfort and efficiency. See decoding the ratings on the label for how tonnage and capacity actually work.
Choosing between the four kinds
Existing ducts point toward a ducted system; none point toward mini-splits. Dual fuel is worth a look if you already own a working furnace, and ground-source systems earn their much higher upfront cost mainly for long stays on land you control.
