Heat pump hot water systems extract heat from the surrounding air and transfer it to the water to heat it up. This is similar technology to that of a split system air conditioning system that you may have on your wall at home. Heat pump systems utilise refrigerant gases to run through a process of Evaporation, Heat Absorption, Compression, Heat Exchange, Condensation and then repeat the cycle. Click here to view the process in greater detail or click here to check out a really insightful diagram and description from our brand partner Enviroheat.