A heat pump works in a building by moving heat instead of creating it. Using a refrigerant cycle driven by an electric compressor, it pulls thermal energy from the outside air, ground, or water and delivers it indoors for heating. In summer the cycle reverses, pushing indoor heat outside to cool the space.

That single piece of equipment can replace both a furnace and an air conditioner, which is why architects and engineers increasingly specify heat pumps in new construction and retrofits. Understanding the mechanics helps you design the building envelope, plant room, and distribution system around the technology rather than treating it as an afterthought. The sections below break down the cycle, the main system types, and the design choices that decide whether a heat pump performs well or struggles.

The basic principle: moving heat, not making it

A gas boiler or electric resistance heater turns fuel or electricity directly into heat. A heat pump does something different. It uses electricity to run a compressor that relocates heat that already exists in the environment, even when the outdoor air feels cold. Air at 0 degrees Celsius still holds usable thermal energy, and the refrigerant inside the system boils at a far lower temperature, so it can absorb that warmth and carry it indoors.

Because the device transfers energy rather than generating it, the heat delivered is several times greater than the electricity consumed. The U.S. Department of Energy notes that air-source heat pumps can cut electricity use for heating by up to 75 percent compared with electric resistance heating, according to its Heat Pump Systems guide. This is the central reason the technology matters for low-carbon building design.

How does the refrigeration cycle move heat through a building?

The refrigeration cycle is the engine behind every heat pump. A refrigerant circulates through a sealed loop, changing between liquid and gas to absorb heat in one place and release it in another. Four components do the work, and each one changes the refrigerant's pressure or temperature in a specific way.

The four core components

• Evaporator: low-pressure liquid refrigerant absorbs heat from the source (outdoor air, ground, or water) and boils into a cool gas.
• Compressor: an electric motor squeezes the gas, sharply raising its pressure and temperature so it becomes hot enough to heat the building.
• Condenser: the hot gas releases its heat to the indoor air or water loop and condenses back into a warm liquid.
• Expansion valve: the liquid passes through a restriction that drops its pressure and temperature, returning it to a cold state ready to absorb heat again.

A reversing valve is what makes the system work year round. Flip it, and the evaporator and condenser swap roles. The indoor coil now collects heat and the outdoor coil rejects it, turning the heating system into an air conditioner without any change to the building's distribution network. The International Energy Agency describes this same loop and its components in its explainer on how a heat pump works.

Types of heat pumps used in buildings

The source the system draws heat from defines its type, its installation cost, and how it integrates with the building. Three categories cover most projects, and the right choice depends on site conditions, available plant space, and the heating load.

Air-source heat pumps

These pull heat from outdoor air and are the most common and least expensive to install. They suit a wide range of buildings and come in ducted and ductless (mini-split) versions. Cold-climate models now operate at temperatures as low as 5 degrees Fahrenheit, per the U.S. Department of Energy, which removes a barrier that limited their use in northern regions a decade ago.

Ground-source (geothermal) heat pumps

These draw heat from the relatively stable temperature of the ground through buried loops, either horizontal trenches or vertical boreholes. They cost more to install because of the excavation, but they deliver higher and steadier efficiency. The Department of Energy reports that high-efficiency geothermal units use 61 percent less energy than a standard model, with typical payback in 5 to 10 years.

Water-source and air-to-water heat pumps

Water-source systems exchange heat with a nearby body of water or a shared building water loop, a common approach in larger commercial buildings. Air-to-water units take heat from outdoor air and deliver it to a hydronic loop feeding radiators or underfloor heating, which pairs well with the low-temperature emitters used in efficient European designs.

Comparing the main heat pump types

The table below summarizes how the three categories differ across the factors that matter most during design.

Factor	Air-source	Ground-source	Water-source
Heat source	Outdoor air	Ground loops	Water body or loop
Install cost	Lowest	Highest (excavation)	Moderate to high
Typical efficiency	Good, drops in cold	Highest and stable	High and stable
Space needed	Small outdoor unit	Large site or bores	Access to water source
Best fit	Most homes, retrofits	Long-term, larger sites	Commercial buildings

What design choices make a heat pump work well?

A heat pump rewards a building designed around it and punishes one that ignores it. The same unit can deliver excellent comfort in one project and disappoint in another, and the difference usually comes down to the envelope and the heat distribution system rather than the equipment itself.

Heat pumps run most efficiently when they supply heat at lower temperatures over longer periods, the opposite of a boiler that blasts hot water in short bursts. That favors a well-insulated, airtight envelope and large-surface emitters such as underfloor heating or oversized radiators. The same envelope thinking that drives good thermal performance also shapes finish decisions, including choices like eco-friendly flooring over underfloor heating loops.

Sizing is the other decisive factor. An oversized heat pump short-cycles, switching on and off too often, which wears the compressor and wastes energy. A properly sized unit matched to a calculated heat loss runs steadily and quietly. This is where early coordination between the architect and the mechanical engineer pays off, since the building form, glazing ratio, and orientation all change the load the heat pump has to meet.

Distribution temperature deserves attention too. A heat pump that supplies water at 35 degrees Celsius to an underfloor system runs at a much higher COP than one forced to push 55 degrees through small radiators sized for a former gas boiler. When retrofitting, replacing a few undersized emitters can lift seasonal efficiency more than any change to the heat pump itself. The building's airtightness then locks in those gains by reducing the heat that escapes before the system has to replace it.

Acoustic and visual integration also belong in the design conversation. Outdoor units carry a fan and compressor, so positioning them away from quiet rooms and screening them without choking airflow keeps both neighbors and inspectors satisfied. Treating the unit as part of the facade composition, rather than a service object hidden at the last minute, usually produces a cleaner result.

Heating and cooling from one system

The reversing valve gives a heat pump a practical advantage over separate heating and cooling equipment: one set of refrigerant lines, one outdoor unit, and one indoor distribution network handle both seasons. For a building, that means less plant space, a simpler service routine, and a single point of control.

This dual function also simplifies the architecture. Instead of finding room for a furnace or boiler plus condensing units for air conditioning, the design accommodates one compact system. In dense urban projects where mechanical space competes directly with rentable or living area, that reduction can change a floor plan. Pairing the system with on-site solar generation pushes a building further toward net-zero operation, a goal explored across many articles on the Architecture and Design blog.

The cooling side carries a practical implication that gets overlooked. Because the same unit handles summer comfort, regions that historically used a non-cooled boiler heating setup gain air conditioning as part of the switch. That changes occupant expectations and can shift glazing and shading decisions, since a building now actively rejects summer heat rather than just resisting it. Designing solar control into the facade keeps the cooling demand, and the electricity bill that follows it, in check.

Controls tie the whole system together. Weather-compensated controls adjust the supply temperature to the outdoor conditions, so the heat pump rarely works harder than the day requires. Combined with zoning that matches output to how rooms are actually used, smart controls protect the efficiency that the equipment and envelope make possible. The result is a building that stays comfortable while drawing the least electricity the design allows.

Technical specifications should be verified by a licensed mechanical engineer for your specific project, as loads, climate, and equipment ratings vary.

Frequently asked questions

Do heat pumps work in cold climates?

Yes. Modern cold-climate air-source heat pumps operate at temperatures as low as 5 degrees Fahrenheit, according to the U.S. Department of Energy. Efficiency does fall as outdoor temperatures drop, so very cold regions sometimes pair a heat pump with a backup heat source or choose a ground-source system, which draws from stable underground temperatures.

How much electricity does a heat pump use?

Far less than the heat it produces. With a Coefficient of Performance around 4, a typical unit delivers about four units of heat for every unit of electricity, per the International Energy Agency. Actual consumption depends on the building's insulation, the climate, and how the distribution system is designed and operated.

Can a heat pump both heat and cool a building?

Yes. A reversing valve switches the direction of refrigerant flow, so the same equipment provides heating in winter and cooling in summer. This is one reason heat pumps are attractive in regions with both cold winters and warm summers, since one system covers both needs.

Is a heat pump worth it for an existing building?

It often is, especially when the envelope is improved at the same time. Air-source units are the easiest retrofit, while ground-source systems carry higher upfront cost but stronger long-term efficiency. A heat loss calculation for the specific building is the only reliable way to confirm the fit before committing.

What This Means for Your Next Project

Your Next Step: Before sizing any equipment, commission a heat loss calculation for the building and review the envelope, because a heat pump performs only as well as the insulation and distribution system surrounding it.