The trick

A furnace makes heat. It takes a fuel and burns it. The chemistry is the chemistry, and you get back, at best, almost as much warmth as you put in.

A heat pump does not make heat. It moves heat. That sentence is the whole trick, and once you have read it three times it stops sounding strange and starts sounding obvious.

Why moving is cheaper than making

To make something, you spend the full price. To move something, you pay the cost of the move. The cost of moving heat is the cost of running a compressor and a fan, and that cost is much less than the cost of producing the heat itself. The heat is already out there, in the air, in the ground, in the water. It is free. The machine just has to fetch it.

The way the machine fetches it is a closed loop of refrigerant. The refrigerant boils at a very low temperature, low enough that even cold outdoor air can warm it from a liquid to a gas. That gas is then compressed, which makes it hot. The hot gas runs through a coil indoors, which warms the air being blown over it. The gas cools back into a liquid, the loop continues, and the heat that was in the outdoor air is now in your living room. The machine never made any of it. It only moved it.

The number you will hear

The number you will hear is the coefficient of performance, abbreviated COP. It is the ratio of useful heat out to electricity in. A COP of three means that for every unit of electricity the machine consumes, it delivers three units of heat to the house. A COP of four means four. The good current machines run at three to five in the temperatures most people actually heat in.

There is a related number for the cooling side called SEER2, and a related seasonal number called HSPF2. They are not as catchy and you will mostly see them on a spec sheet rather than in conversation. You can mostly ignore the alphabet soup and remember the one thing. The COP is the multiplier.

This is why heat pumps lower bills in most places, even where electricity costs more than gas per unit. You are not paying for electricity to heat the house. You are paying for electricity to fetch the heat, and the fetching is much cheaper than the heating.

Where the multiplier shrinks

The colder it gets outside, the harder the machine has to work to find heat, and the COP drops. A machine that runs at four on a forty-degree morning might run at two on a five-degree morning. It still works. It is just less of a bargain on that morning. The current cold-climate models keep the COP above two even at temperatures most people would call brutal. The older machines did not, which is where the old reputation about cold climates came from.

In short. The furnace makes. The heat pump moves. The moving is cheaper. The colder it gets, the less cheap the moving is, but the moving is still happening. That is the whole story.