HVACR Consumer Information: How a Heat Pump Works
 
A heat pump is like a conventional air conditioner except it also can provide heat in winter. In the summer, the heat pump collects heat from the house and expels it outside. In the winter, the heat pump extracts heat from outside air and circulates it inside the house. The heat pump works best when the outdoor temperature is above freezing. Below that, supplementary heat often is needed. A heat pump can save 30 to 60 percent less energy to supply the same heat when compared to an electric furnace with a resistance heating element.
Refrigerant passes through the indoor coil, evaporating from a liquid to a vapor. As the liquid evaporates, it absorbs heat, cooling the air around the coil. An indoor fan pushes this cooled air through ducts inside the house. Meanwhile, the vaporized refrigerant laden with heat, passes through a compressor which compresses the vapor, raising its temperature and pressure. The reversing valve directs the flow of hot, high pressure vapor to the outdoor coil where the heat released during condensation is fanned into the outdoor air, and the cycle begins again.
Note that the slide inside the reversing valve has shifted, causing the refrigerant flow to reverse. Liquid refrigerant now flows to the outdoor coil picking up heat as it evaporates into a low pressure vapor. The vapor travels through the compressor where it is compressed into a hot, high pressure vapor, then is directed by the reversing valve to the indoor coil. The vapor turns into liquid as it passes through the indoor coil, releasing heat that is pushed through the ducts by the indoor fan.