How a heat pump actually works, without the jargon

A furnace works by burning a fuel. The chemistry of combustion releases heat, which the furnace pushes through your ducts. The efficiency rating you see on a furnace, like 92% AFUE, just tells you how much of the fuel's energy actually ends up as useful heat in your home and how much goes up the chimney as waste. By definition that number can never reach 100%, because you always lose something to the flue.

A heat pump skips combustion. It is a refrigerator running in reverse.

Think about what happens when you stand behind your fridge. The back panel is warm. The fridge is constantly pulling heat from inside the cabinet and dumping it out the back. The food gets colder; the kitchen gets a little warmer. The fridge does not destroy heat. It picks it up from one place and drops it off somewhere else. A heat pump uses the same components (a compressor, a refrigerant loop, two heat exchangers, and an expansion valve) to do the same thing on a much larger scale. In winter it picks up heat from the air outside your house and moves it indoors. In summer it does the opposite: it takes heat from inside and pumps it out.

Where does the heat come from when it's cold out?

This is the part people get stuck on. If it's –10°C outside, where is the heat?

The answer is that "cold" is relative. The absolute zero of temperature is –273°C. At –10°C, the air outside your house still has 263 degrees of heat in it compared to that absolute floor. There is plenty of heat to pump indoors. The trick is that the refrigerant inside the heat pump needs to be even colder than the outside air for heat to flow into it. Modern cold-climate refrigerants like R-32 and R-454B can be driven down to around –30°C inside the outdoor coil. As long as the air outside is warmer than the refrigerant, heat moves from the air into the refrigerant. From there, the compressor squeezes that refrigerant, which raises its temperature dramatically, and a fan blows air across the now-hot indoor coil to warm your house.

The compressor is where the electricity goes. You are not paying to create heat; you are paying to run the pump that moves heat. That is why a heat pump's energy output can be much larger than its electrical input.

What COP means, in one sentence

COP stands for Coefficient of Performance. It is the ratio of useful heat delivered to electricity consumed. A COP of 3.0 means that for every kilowatt-hour of electricity the unit draws, it delivers three kilowatt-hours of heat to your home. The other two kilowatt-hours did not come from electricity. They came from the outdoor air.

This is not magic, and it does not break the laws of thermodynamics. The total energy is conserved: electricity in, plus outdoor heat captured, equals heat delivered. The heat pump is just the device that makes the transfer happen.

Why a cold-climate heat pump is different

Older heat pumps tapped out around –5°C. The compressor could not maintain enough pressure to extract heat once outdoor temperatures dropped much below freezing. That is why the technology had a reputation for being unsuitable for Canadian winters until the last decade.

Three things changed that.

The first was the introduction of variable-speed inverter compressors. Older units cycled on and off at full power; modern ones spin slow when demand is low and ramp up only when needed. This makes the pump much more efficient at part loads, which is most of the heating season.

The second was the move to refrigerants that perform well at very low temperatures. R-410A worked but lost capacity quickly below –10°C. The newer mixtures like R-32, R-454B, and propane-based blends keep heating capacity higher at lower temperatures.

The third was better heat exchanger design and electronic expansion valves that adjust refrigerant flow in real time. Together these changes mean a cold-climate heat pump (CCHP) certified to the Canadian Standards Association SB-44 procedure can deliver more than 75% of its rated heating capacity at –15°C, and many operate down to –25°C or –30°C without backup heat.

What happens when it gets really cold

Even a top-tier cold-climate unit will run out of capacity at some point. Below the unit's rated minimum temperature, two things happen.

First, the heating output drops below what your house needs. A heat pump might be sized to provide 100% of your heat down to –20°C, but at –30°C it may only deliver 60% of what the house demands.

Second, the COP drops toward 1.0. At very low temperatures the pump still works, but the efficiency advantage shrinks to almost nothing. A COP of 1.0 means the heat pump is essentially acting like an expensive electric baseboard heater.

This is what backup heat is for. Most Canadian heat pump installations include either electric resistance heat strips inside the air handler, or the original furnace kept as a "dual-fuel" backup. The control system decides when to switch over. In a well-set-up dual-fuel system, the furnace only runs on the coldest 5% of hours in the year, which preserves most of the cost savings while guaranteeing comfort on the worst nights.

Air source versus ground source

An air-source heat pump (ASHP) is the type most Canadians install. It exchanges heat with the outdoor air. The outdoor temperature swings between roughly +30°C in summer and –30°C in winter, which is why the COP varies so much through the year.

A ground-source heat pump (GSHP), often called geothermal, exchanges heat with the soil through buried pipes. Soil temperature below the frost line stays around 8 to 12°C year-round in most of Canada. That stable source makes the COP much steadier (typically 3.5 to 4.5 in winter) and there is no need for backup heat in most homes. The trade-off is installation cost. Drilling or excavating the ground loop adds $15,000 to $30,000 to the project, which is why ground-source remains a small slice of the residential market despite its efficiency advantage.

The summer side

A heat pump is also a central air conditioner. The refrigerant cycle reverses with a four-way valve, and the same equipment that pumped heat indoors in January now pumps heat outdoors in July. The energy efficiency rating you see for cooling is called SEER (Seasonal Energy Efficiency Ratio); modern heat pumps achieve SEER values of 16 to 22, which is competitive with the best dedicated air conditioners.

For households that previously used window units or had no air conditioning at all, this is a quiet bonus. The heat pump pays you back in the winter and gives you summer comfort as a side effect.

What this means for your decision

A heat pump can replace a furnace or boiler, deliver two to three times as much heat per unit of electricity as a baseboard heater, and cool your house in summer. The cost-savings case depends on three local variables: what you pay for electricity, what you currently pay for heating fuel, and how cold your winters get. The greenhouse-gas case is almost always positive, but the strength depends on whether your provincial grid runs on hydro, nuclear, or coal.

If you want to see the numbers for your own home, run them through the check. It uses your actual heating bill rather than a generic average, which is the only honest way to estimate what you'd save.