A heat pump uses technology similar to that found in a refrigerator or an air conditioner. It extracts heat1 from a source, such as the surrounding air, geothermal energy stored in the ground, or nearby sources of water or waste heat from a factory. It then amplifies and transfers the heat to where it is needed. Because most of the heat is transferred rather than generated, heat pumps are far more efficient than conventional heating technologies such as boilers or electric heaters and can be cheaper to run. The output of energy in the form of heat is normally several times greater than that required to power the heat pump, normally in the form of electricity. For example, the coefficient of performance (COP) for a typical household heat pump is around four, i.e. the energy output is four times greater than the electrical energy used to run it. This makes current models 3‐5 times more energy efficient than gas boilers. Heat pumps can be combined with other heating systems, commonly gas, in hybrid configurations.

The heat pump itself consists of a compressor, which moves a refrigerant through a refrigeration cycle, and a heat exchanger, which extracts heat from the source. The heat is then passed on to a heat sink through another heat exchanger. In buildings, the heat is delivered using either forced air or hydronic systems such as radiators or under‐floor heating. Heat pumps can be connected to a tank to produce sanitary hot water or provide flexibility in hydronic systems. Many of the heat pumps can also provide space cooling in summer in addition to meeting space heating needs in winter. In industry, heat pumps are used to deliver hot air, water or steam, or to directly heat materials. Large‐scale heat pumps in commercial or industrial applications or in district heating networks require higher input temperatures than in residential applications, which can be sourced from the waste heat of industrial processes, data centres or wastewater.