How Does a Heat Pump Work

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Last updated: October 31, 2023

Are you looking to make your heating more environmentally friendly and self-sufficient? A heat pump might be a perfect solution. By transferring heat from one place to another and using a small amount of electricity to do it, heat pumps are highly efficient and clean heating systems. They’re also slowly rising in popularity in the UK, and the government is helping encourage the uptake of this and other renewable heat technologies through financial incentives. It’s also good to remember that by 2025, gas boilers will no longer be installed in new builds.

But is a heat pump really the right heating system for your home, and if it is, which type is best for your needs and budget? After all, there are at least three heat pumps to choose from – air source heat pumps, ground source heat pumps and water source heat pumps- and each type comes with its own pros and cons. To help you answer that question, we delve deep into how heat pumps work, how much they cost to run, and more in this article.

How Does a Heat Pump Work?

A heat pump works by taking the thermal energy out of the surrounding environment such as air, water or ground, and converting it into heating (and hot water) for your home. While this process may sound like magic, the science behind it is pretty simple. Here are the three major phases a heat pump goes through in order to provide heating and cooling for your home:

  • Extraction and absorption: the first thing a heat pump must do is extract and absorb the heat from the environment (a natural source of heat can be air, ground or water). This is done in the evaporator where the refrigerant changes its matter from liquid to gas.
  • Compression: once the refrigeration coolant changes from liquid to gas, the heat pump compresses it to further increase its temperature. This heat can then be used to warm your home via radiators or underfloor heating.
  • Condensation: as the refrigerant transfers the heat from the environment to your home, it slowly cools down, condensing back into a liquid. Thanks to this process, the colder water from your central heating system can continue to absorb the heat (this is one of the reasons why heat pumps are so efficient!).

Once the refrigerant has completely cooled down, it goes through an expansion valve, where its pressure gets decreased. Then, it returns back to the evaporator, and the whole cycle begins again. Of course, since there are different types of heat pumps, each pump works a bit differently, however, the basics remain. During the heating season, the heat pump system transfers the heat from a cool space (surrounding environment) to a warm space (your home), and during the cooling season, the pump transfers heat from a cool space (your home) to a warm space (the outdoors).

Quite similar to a regular AC unit, right? Except for one thing – because a heat pump simply moves heat from one space to another instead of generating it, it is infinitely more energy efficient.

Heat Pump Components

A typical heat pump consists of two major parts: an outdoor and indoor unit. Both of these units contain several important sub-components, including a refrigerant, compressor, reversing valve, expansion valve, and more.

Outdoor unit

As the name suggests, this component usually sits outside the house. It contains a system of coils with refrigerant in it and a fan or impeller, which draws the outside air in the pump. The refrigerant is what absorbs the heat and rejects it as it moves throughout the system.

Indoor unit

Also referred to as the air handler unit because it passes hot (or cool) air into the house, the indoor unit also contains a coil and a fan. The former acts as an evaporator when the heat pump is in cooling mode, and as a condenser when it is in heating mode. As for the fan, its function is to move the air across the coil and into the house.

Types of Heat Pump

There are three main types of heat pumps available:

Air Source Heat Pump

An air source heat pump extracts heat from the ambient air outside and uses it to heat the refrigerant. Absorbing the heat, the liquid in the refrigerant begins to evaporate and turn into gas, which is then compressed for maximum temperature.

This type of system is very much dependent on current ambient temperature and so, it varies throughout the year depending on your geographic location. This affordable-to-install system is recommended for moderate climates, so it’s no wonder why it’s quite popular in the UK.

Ground Source Heat Pump

A ground source heat pump, also known as a geothermal heat pump, takes heat from the ground. This is done via a system of pipes that are installed underground. The ground source heat pump also uses a solution of antifreeze and water which flows through the pipes, transferring heat from the ground and into your home.

Because the temperature is much more constant under the ground than in ambient air, ground source heat pumps are more efficient than air heat pumps. However, the installation is much more expensive as well as complex due to the need for excavation in order to lay down the piping.

Water Source Heat Pump

A water source heat pump works in a similar way to how a ground source heat pump operates, only instead of taking heat from the ground, it takes it from a body of water. This transfer of heat is done via a network of pipes that contain antifreeze solution.

While highly efficient, water source pumps are naturally not recommended for every property, but only those that have a substantial amount of water nearby. In fact, even if you have a pond or lake around your property, a water pump will not be suitable unless that body of water is large and deep enough. This is because, in smaller bodies of water, the water temperature can drop pretty quickly and significantly in winter, which can cause the antifreeze in the pipes to freeze (and therefore your pipes as well). The good news is that this should not happen if your lake is large enough for your house.

Do Heat Pumps Save You Money?

Because heat pumps don’t generate heat but only move it from one place to another, they are highly energy efficient. But are they better than the traditional heating systems? It depends on your current heating system and the heat pump type you’re interested in installing.

For example, if you’re currently using electricity to heat your home and are looking to replace it with a heat pump, the answer is a resounding yes – a heat pump will definitely help you save money on heating bills. If you’re looking to replace an old LPG or oil boiler, the answer is still yes, but the savings will be somewhat smaller. If you’re on the gas grid, however, the savings will be much smaller, if any, depending on the pump.

Now if you’re planning to use a heat pump along with a primary heating system, such as gas, oil or electric, you can save quite a bit of money by offsetting the use of your main fuel. For instance, one heat pump can offset up to 300 gallons of oil, which is quite a lot for an average home.

So, whether they use heat from the air, ground or water, heat pumps are quite efficient and can help save you money on heating bills, especially if you’re switching from an electric storage heater or an oil or LPG boiler.

Are Heat Pumps Worth the Cost?

When all is said and done, is a heat pump really worth buying? Unfortunately, there is no simple yes or no answer to this question as the decision to install a heat pump depends on several important factors, including the type of heat pump you want and can install on your property, the heating system you’re currently using to heat your home, the installation price of the installer you hire, etc.

When it comes to upfront costs, it’s easy to see why some may think the heating pumps are not worth it. After all, they are quite expensive, with air pumps costing on average around £6,000 and ground pumps around £10,000 with installation costs. But the good news is, thanks to the Renewable Heat Incentive, you can receive a large portion of this money back in tax-free payments. Furthermore, all heat pumps last on average between 20 and 25 years, which is much longer than your standard boiler (around 10 years). Another thing to keep in mind is that the installation only needs to be done once, so when it’s time for a replacement, you’ll only have to purchase the heat pump unit, which costs considerably less. Not to mention, by using a heat pump, you’ll reduce your home’s carbon footprint by a lot!


  1. How does a heat pump work? – Gorenje
  2. Heat Pumps Explained – Worcester-Bosch