A heat pump has four basic components: an outdoor unit that contains the compressor, condensing coil, fan, motor and electrical components; an air handler; a heater pack; and the line set that connects the air handler to the heat pump. Some heat pumps add a variable speed blower motor.
Most heat pumps work by transferring heat between the air inside a building and the air outside. To cool indoor air, the compressor pumps cooled refrigerant through its lines into the indoor side of the system, where it absorbs heat. The heated refrigerant passes from there to the outside coils where the heat is released and the cycle starts over, while the air handler's fan distributes cooled air through the building.
In winter, the heat transfer cycle is reversed to extract heat from outdoor air and transfer it into the house. Heat transfer is much more energy-efficient than generating heat directly, but in cold weather, there is not much heat outside for the heat pump to extract. The heater pack supplements the heat from heat transfer with heat generated by electric resistance coils. Alternately, heat pumps can be used with a backup gas furnace or oil burner for more efficient heating in sub-freezing weather.