The key difference between a central AC and a heat pump lies in their functionality. A central AC system only cools, relying on a separate furnace for heating during colder months. A heat pump, on the other hand, provides both heating and cooling. It can extract heat from the outdoor air even in relatively cold temperatures (down to a certain point), providing efficient heating. In summer, it reverses the process to cool your home. Heat pumps are often a more energy-efficient choice than a separate AC and furnace, especially in mild to moderate climates.