A heat pump is part of a home heating and cooling system and is installed outside your home. Like an air conditioner such as central air, it can cool your home, but it’s also capable of providing heat. In cooler months, a heat pump pulls heat from the cold outdoor air and transfers it indoors, and in warmer months, it pulls heat out of indoor air to cool your home. They are powered by electricity and transfer heat using refrigerant to provide comfort all year round. Because they handle both cooling and heating, homeowners may not need to install separate systems to heat their homes. In colder climates, an electric heat strip can be added to the indoor fan coil for additional capabilities. Heat pumps do not burn fossil fuel like furnaces do, making them more environmentally friendly.