A heat pump is an HVAC system that can both heat and cool. It works by transferring heat between the inside and outside air. In cooling mode, the heat pump extracts heat from inside your home and releases it outside, just like a traditional air conditioner. In the winter, it reverses this process, absorbing heat from the outside air (even in cold temperatures) and transferring it inside to warm your home. Heat pumps are highly efficient for both heating and cooling, making them a good alternative to traditional furnaces and air conditioners, especially in mild to moderate climates.