It's not a fire, not a problem. In fact, it's normal. When low temperatures and high humidity conditions exist together, frost and ice may build up on the outdoor coil, similar to the frost that collects in your freezer. Since ice acts as an insulator on this coil, it needs to be removed. So the electric heat pump automatically defrosts by switching to the cooling cycle.
Hot gas travels to the outdoor coil and melts the frost and ice, resulting in billowing steam.
Defrost usually occurs when the outdoor temperature is between 30 to 40 degrees and when the humidity is above 60 percent. When defrost is complete, the unit returns to normal operation. The whole cycle only lasts a few moments, so you may never even notice it occurring. But to make sure you and your family stay warm and comfortable, supplemental heat is energized while the coil defrosts. Like any climate control device, the electric heat pump is operated by a thermostat.