A heat pump is an air conditioner that provides heating and cooling. It works by transferring heat between the inside and outside air. In the summer, the heat pump extracts heat from inside your home and releases it outside, just like a traditional air conditioner. In heating mode, it reverses this process, absorbing heat from the outside air (even in cold temperatures) and transferring it inside to warm your home. A heat pump could reduce your utility bills while providing year-round comfort.