A heat pump extracts heat from the surroundings (air, ground, or water) and, through the compression of refrigerant in the compressor, converts it into a higher temperature suitable for heating and hot water production—similar to how a pump inflates a tire. It can even extract heat from air at -20°C, although the process is slightly less efficient at such low temperatures.

Air-to-water heat pumps are popular due to their easy installation, as they do not require drilling or ground collectors. In contrast, ground-to-water heat pumps are the most efficient, but their higher investment cost limits their use. However, the ground maintains a stable temperature of around 10–12°C from just 10 meters below the surface.