The consistent temperature (energy level) of the earth is a terrific place to pick up or expel heat energy.
Simplified, a heat pump system involves a loop of tubing running deep into the earth or through a large body of water. Energy carrying fluid (refrigerant in this case) is pumped through the loop absorbing energy or expelling excess energy. The fluid is then circulated through a conventional heat exchanger, circulating air is blown over the exchanger and is eventually distributed throughout the complex via regular air ducts.

Heating
In the heating mode, the water circulating in the earth loop is cooler than the ground or lake temperature. Heat is absorbed by the water utilizing a simple theory of physics called heat transfer. Energy is absorbed from the ground in the form of heat. The water returning from the ground loop is warmer than the water initially plumbed into it. The water returning from the ground is directed through a heat exchanger. In the heat exchanger, refrigerant absorbs the heat energy from the heated water . The water now leaves the heat exchanger at a colder temperature, and circulates through the earth loop to pick up more energy (heat).

Refrigerant gas which contains energy gained from the earth loop travels from the heat exchanger to a compressor. In the compressor the refrigerant temperature rises to 160 degrees. From the compressor, the super heated refrigerant travels to the heat exchanger. Here, the heat pump's blower circulates air across the air coil, increasing the temperature of the air which is blown through the duct work to heat the building.

Cooling

In the cooling mode, the water circulating in the earth loop is warmer than the ground or lake temperature. Heat is expelled by the water. Energy is expelled from the ground in the form of heat. The water returning from the ground loop is cooler than the water initially plumbed into it. The water returning from the ground is directed through a heat exchanger. In the heat exchanger, refrigerant absorbs the heat energy from the water. The water now leaves the heat exchanger at a warmer temperature, and circulates through the earth loop to release heat to the ground or lake.

The refrigerant, which has released its heat energy, and has become a cold liquid, now travels to the air / heat exchanger. Here, the heat pump's blower circulates warm humid air across the cold air coil. As the air blows across the air coil, the air is cooled and distributed via the duct work throughout the building.