Heat pump system usually consists of two parts: an indoor unit called an "air handler" and an outdoor unit similar to a central air conditioner, but referred to as a "heat pump". A compressor circulates refrigerant throughout the system that absorbs and releases heat as it travels between the indoor and outdoor units. Heat pumps as energy efficient as central air conditioners and gas furnaces, while at the same time they simple and safe to operate, since they don't use combustion fuel.