A heat pump's refrigeration system consists of a compressor and two copper or aluminum coils (one indoors and one outside), which have aluminum fins to aid heat transfer. In heating mode, liquid refrigerant in the outside coil removes heat from the air and evaporates into a gas. The indoor coil releases heat from the refrigerant as it condenses back into a liquid. A reversing valve, near the compressor, can change the direction of the refrigerant flow for cooling mode as well as for defrosting the outdoor coil in winter.

The efficiency and performance of today's air-source heat pumps is a result of technical advances such as the following:

Thermostatic expansion valves for more precise control of the refrigerant flow to the indoor coil

Variable speed blowers, which are more efficient and can compensate for some of the adverse effects of restricted ducts, dirty filters, and dirty coils

Improved coil design

Improved electric motor and two-speed compressor designs

Copper tubing, grooved inside to increase surface area.