Electric air-to-air heat pumps are basically reversible air conditioners. They transfer heat from the air in one location to the air in another. They are referred to as "air-to-air" because they take heat from air and transfer it to other air. This is different from geothermal heat pumps or water-source heat pumps where the "heat source" or "heat sink" is something other than air like the earth or a pond.
In summer, air-to-air heat pumps operate as air conditioners, removing heat from the home. In winter, they reverse their operation, gathering heat from air outside the home and moving it inside. Most heat pumps deliver conditioned air to the home using ductwork. Packaged, "through-the-wall" systems with no ductwork are also available but not as common.
Since heat pumps transfer rather than generate heat, they can be extremely efficient, delivering more than three times as much heat as they consume in energy. In some parts of the country (especially in mild climates) they are the least expensive way to heat and cool a home.
Heat pumps have the additional advantages of providing heating and cooling in one unit using a single energy source. In addition, heat pumps do not require flues or their associated roof penetrations.