The most common form of heating, a furnace is pretty easy to understand. It heats air, steam or water that is then circulated throughout the home.

Air conditioners and heat pumps don't so much cool or warm air as transfer heat from one place to another. The heart of these systems is the compressor. Its purpose is to compress and thus condense vaporized refrigerant back into its liquid state. As refrigerant vaporizes, it picks up heat from its surroundings. When it condenses back into a liquid, that heat is released.

In a standard air conditioner, this heat transfer goes in one direction. Heat is picked up inside and dispersed outside. In the process, humidity condenses on the cooling inside coil and is then is drained away. In a heat pump, this flow may be reversed by means of a reversing valve. During most of the heating system, the heat pump can gather heat from outside air because while cool, it is still warmer than the refrigerant. On really cold days -- only about small percentage of our relatively mild winters -- a supplemental resistance heater or the furnace in the case of a hybrid dual-fuel system kicks in.

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