How Does a Heat Pump Work?

A heat pump works by moving heat from one place to another instead of burning fuel to create it. A refrigerant circulating between an outdoor coil and an indoor coil absorbs heat on one side, a compressor raises its temperature, and the other side releases that heat, with a reversing valve deciding which side does which.

That is the whole mechanism. Everything else, cold-weather performance, defrost cycles, auxiliary heat, running costs, follows from it. Below is what each stage actually does, what changes between summer and winter, and what it costs to run in Pennsylvania and New Jersey at current electricity rates.

The Refrigerant Cycle, Step by Step

Step 1: The outdoor coil absorbs heat from the air

This is the step that gives the technology its name in the refrigeration industry: the system extracts heat from a cold place and moves it to a warm one. Refrigerant enters the outdoor coil as a cold, low-pressure liquid, colder than the outside air even on a January morning. Heat always flows from warmer to cooler, so heat from the outdoor air is transferred directly into the refrigerant and boils it into a vapor. Air at 20°F still contains a great deal of heat energy; "cold" only describes it relative to a comfortable room, not relative to refrigerant sitting near 0°F.

Step 2: The compressor raises the temperature

This is the main component that consumes power. The vapor reaches the compressor, which squeezes it into a much smaller volume. Compressing a gas raises its pressure and its temperature together, so lukewarm vapor leaves the compressor genuinely hot. This is the step that does the useful work, and it is where nearly all of the electricity goes.

Step 3: The indoor coil gives the heat to your house

Hot, high-pressure refrigerant flows to the indoor coil, which is a heat exchanger like the one in a car radiator. A blower pushes house air across it, heat transfers into that air, and the air goes out through the ducts or the indoor head. Having given up its heat, the refrigerant condenses back into a liquid.

Step 4: The expansion valve resets the cycle

The liquid passes through an expansion valve, which drops its pressure sharply. Pressure and temperature fall together, so the refrigerant arrives back at the outdoor coil cold enough to absorb heat again, and the loop repeats.

Step 5: The reversing valve flips it in summer

One component separates a heat pump from an air conditioner: a four-way reversing valve that changes which direction refrigerant flows. Flip it and the indoor coil becomes the one absorbing heat, the outdoor coil becomes the one releasing it, and the same machine cools the house.

Cooling Mode: The Same Machine in Reverse

In cooling mode a heat pump is an air conditioner, and the comparison is exact rather than approximate. The reversing valve sends refrigerant the other way, so the indoor coil becomes the one extracting heat and the outdoor coil the one releasing it outdoors. Nothing else about the equipment changes.

That is why a heat pump replaces both boxes in a traditional setup. Homes on furnaces and separate air conditioners run two systems that share only the ductwork and the blower; a heat pump does both jobs with one outdoor unit and one refrigerant circuit. It is also why heat pumps are compared against air conditioners on the same efficiency scale, SEER2 for cooling, with HSPF2 added for heating.

The one practical difference in summer is dehumidification. Because a heat pump modulates rather than cycling hard on and off, especially a variable-capacity model, it tends to run longer at lower output and pull more moisture out of the air. In a humid Philadelphia August that is worth more day to day than a point of efficiency rating.

What Happens in Winter

The defrost cycle

When the outdoor coil runs below freezing, moisture in the air condenses on it and freezes. Frost insulates the coil and blocks airflow, so the system periodically reverses itself for a few minutes to warm the coil and melt the ice. During defrost you will see steam rising off the outdoor unit and hear the reversing valve change over. It looks alarming and it is completely normal.

Auxiliary and emergency heat

Below a certain outdoor temperature, a heat pump can no longer supply all the heat a house is losing. At that point auxiliary heat, usually electric resistance strips or a gas furnace in a dual-fuel setup, makes up the difference. Electric strips are expensive to run, which is the single biggest reason people see a shocking winter bill. "Emergency heat" on the thermostat bypasses the heat pump entirely and should only be used if the heat pump itself has failed.

Why capacity falls as it gets colder

In colder climates the physics works against you: the colder the outdoor air, the less heat there is per cubic foot for the coil to collect, so output drops just as the house needs more. Cold-climate models are engineered around this, and ENERGY STAR verifies their heating capacity down to 5°F through third-party testing. Sizing against local winter design temperature is what separates a system that carries the house from one that leans on auxiliary heat all season.

Why It Is So Efficient

Furnaces and boilers make heat by burning fossil fuels, and they can never deliver more energy than the fuel contains. A heat pump is not making heat at all, it is transferring it, so the ratio of heat delivered to electricity consumed can be far greater than one. ENERGY STAR puts it at up to three times more heat energy delivered than electrical energy consumed. Against electric resistance heating, the U.S. Department of Energy estimates a modern heat pump reduces electricity used for heating by about 65 percent.

Types of Heat Pumps and How They Differ

Ducted air-source

Uses the existing HVAC supply and return ductwork. The straightforward option when a home already has a duct system in reasonable condition.

Ductless mini-split

An outdoor unit feeding one or more wall-mounted indoor heads through a small line set. No ducts needed, and each zone has its own control. Common in Philadelphia rowhomes and older homes heated by radiators.

Dual-fuel (hybrid)

A heat pump paired with a gas furnace. Controls hand the job to whichever is cheaper at the current outdoor temperature. Practical anywhere gas service already exists.

Geothermal

Exchanges heat with the ground through buried loops rather than with outdoor air, so the heat source stays at a moderate temperature all winter. Ground temperature barely moves through the year, so winter performance is far more stable, at a considerably higher installed cost.

What It Costs to Run

The arithmetic is simple once you know your rate. Residential electricity in June 2026 averaged 21.73 cents per kWh in Pennsylvania and 24.95 cents per kWh in New Jersey, according to the U.S. Energy Information Administration.

A 3-ton heat pump operating at a coefficient of performance around 3 draws roughly 3.5 kW while running. At those rates that is about $0.76 an hour in Pennsylvania and $0.87 an hour in New Jersey, so two hours of runtime costs somewhere near $1.50 to $1.75. Worth adding to the comparison: none of that electricity is burned in the house, so a heat pump produces no combustion emissions on site and its greenhouse gas footprint falls as the grid gets cleaner, which is not true of any furnace or boiler. Those figures are an illustration, not a quote: your actual draw depends on the size of the system, its efficiency rating, the outdoor temperature at the time, and how well the house holds heat. The same system on a 20°F night with auxiliary strips engaged will cost several times that per hour, which is exactly why auxiliary heat runtime is worth minimizing.

How This Plays Out in Philadelphia and New Jersey Homes

Our winter design temperatures sit in the low teens, well inside the efficiency ratings that cold-climate equipment is tested to, so the technology is not the constraint here. Two other things usually are.

The two things that actually decide the outcome here

Ductwork running through unconditioned space

Cape Cods and split-levels across South and Central Jersey often run ducts through unconditioned attics, and a heat pump delivers milder supply air than a furnace, so heat lost in the attic shows up as rooms that never quite get there. Sealing and insulating those runs changes the outcome more than upgrading the equipment does.

What the house is coming off

Rowhomes and twins in Philadelphia frequently have no duct system at all, which points to ductless. Homes with gas service usually land on dual-fuel, because it uses the heat pump through the long mild stretch of the season and hands over to gas when gas is cheaper.

Synergy3 Home Solutions has been sizing and installing this equipment in local housing stock since 2006, with NATE-certified technicians and a load calculation on every job rather than a match to the old unit's tonnage. See Heat Pump Installation for how we scope it.

Considering a Heat Pump?

If you want a straight answer on whether a heat pump suits your house, Get in touch with Synergy3 Home Solutions. We are family-run out of Philadelphia, with 20 years in the trade, a 4.9-star rating, and 500+ Google reviews. Our hours are Monday to Friday 7:00 am to 7:00 pm and Saturday 7:00 am to 3:00 pm during peak season, with same-day service available on most calls. For installed prices and what moves them, see our guide to Heat Pump Cost in Philadelphia & NJ.