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What Is HVAC and How Does It Work? (2024 Guide)

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Heating and air conditioning inverter used to climatize a home

Author Image Written by Brenda Woods Updated 06/21/2024

Your HVAC system—which includes your heating, ventilation, and air conditioning—controls your home’s indoor temperature and humidity. It provides ventilation and filters out particles such as dust, pollen, dander, and other allergens.

In this guide, we’ll explain the basic principles behind HVAC systems such as furnaces, air conditioners, and heat pumps, and identify important system components. HVAC installation and repair is best performed by professionals, but if you have a basic understanding of how your system works, you’ll be better prepared to maintain it.

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HVAC units next to a home
HVAC Installation

Installation costs for common air conditioning units range from $500–$2,500.

Man working on a HVAC system
HVAC Repair

Depending on the repair, the typical cost ranges from $100–$2,000.

Energy efficient heat pump next to a house
Furnace Installation

Installing an electric furnace will typically cost $1,600–$9,700.


HVAC is an acronym for heating, ventilation, and air conditioning. It’s an umbrella term for any system that heats or cools indoor air. HVAC systems also regulate humidity and improve indoor air quality. We expand on these terms below:
Heating: Furnaces, boilers, heat pumps, space heaters, and radiators are all potential components of home heating systems.
Ventilation: Many HVAC units are attached to a ductwork system to circulate treated air throughout a building. Vents and chimneys are also part of ventilation systems.
Air conditioning: A home can have a central air conditioner, but window and wall units or ductless mini-split cooling systems also keep the indoor temperature down.

What Do HVAC Systems Do?

Unless you live somewhere with perfect natural ventilation and moderate temperatures year-round, your home almost certainly has some kind of HVAC equipment. The function of an HVAC system is to keep the indoor temperature comfortable. This can even be a matter of health and safety in regions with extreme climates. As these systems heat or cool air, they may also filter out particles and debris or remove or add moisture.

How Do HVAC Systems Work?

Here are some common types of HVAC systems and how they function.

Air Conditioner

Furnace Heater

Heat Pump

An air conditioner uses refrigerant to draw heat out of your home. The refrigerant is a liquid as it travels through the air handler (the indoor portion of an AC unit). In the air handler, it pulls heat from the air until the refrigerant turns into a gas. Then it travels to an outdoor unit called a condenser, where the heat is released into the outside air. The compressor then turns the refrigerant back into a liquid so it can travel indoors and repeat the process.
Furnaces create heat by burning fuel. The most common fuel sources are natural gas, liquid propane, and heating oil. Some may run entirely on electricity, but nearly all require some electrical input to work the controls. Most furnaces are forced-air systems in which heated air is circulated by a blower through the home’s air ducts. A filter traps dust and debris, keeping the furnace running smoothly and purifying the air.
A heat pump is similar to an AC unit in that it uses refrigerant to move heat and keep a home cool. Unlike air conditioning systems, heat pumps can warm a house in the winter by bringing in heat from outdoor air—or from the ground if it is a geothermal heat pump. They don’t burn fuel like a furnace, so they don’t require pilot lights or exhaust vents. In colder climates, a furnace may be combined with a heat pump to generate heat on especially cold days.

Types of HVAC Systems

There are many different types of heating and air conditioning systems, but below we’ll list the ones most commonly found in residential buildings. An HVAC system may be ducted, meaning it requires a system of ductwork to distribute treated air throughout the building, or ductless, meaning it distributes treated air without requiring these special conduits.


Boilers work similarly to furnaces, but they heat water instead of burning fuel to heat air. Oil, gas, or electricity heats the water inside the boiler, which is circulated through your home’s radiators to heat each room. Some boiler systems circulate steam instead of water. As the steam or water cools, it returns to the boiler for reheating.

Boilers produce more heat while burning less fuel than furnaces, and they may be combined with a home’s water heater for extra energy efficiency. However, boiler systems are pricey to install and repair and require different maintenance and safety checks than other HVAC systems. Boilers create a lot of heat and pressure, and though most modern boilers have substantial safety features, they can still be potentially dangerous if they malfunction.

Central Air Conditioner

Central air conditioning units are hooked up to a duct system that allows cooled air to travel throughout a building. They’re controlled by a thermostat: When the temperature rises above a certain level, the system kicks on and cools the air until it drops again. 

Air conditioning units draw humidity out of the air by cooling it. As the refrigerant passes through the indoor system parts, moisture in the air becomes condensation that builds up on the evaporator coils. Eventually, this condensation becomes water droplets that fall into a drip pan and travel out through an external drain.

Central air conditioning systems are expensive but extremely helpful in regulating indoor temperatures in hot climates. As air is pushed through the system, air filters remove dust, pollen, and other potential allergens. Unfortunately, central AC systems and their accompanying ductwork are expensive to install and take a lot of energy to run. Air ducts also require professional cleaning occasionally, or they may grow mold, mildew, or pests.

Ductless Mini-Split System

Mini-splits are ductless systems that cool the air in one or more rooms. They require an outdoor condenser unit and one or more indoor air handlers like central air conditioning. However, no ductwork means less cleaning, and there is no need to open up the walls, ceilings, or floors to install air ducts. Most mini-splits are less expensive than other options and are easily installed on the wall. However, that also means they’re clearly visible and take up wall space.

Mini-splits are more efficient and use less energy than central AC units, but they’re not as useful in hot climates. A mini-split is usually the best choice if you live in a milder zone, your home doesn’t have ductwork, and you only want to cool one or a handful of rooms.

Electric Heat Pump

Despite the name, heat pumps provide heating and cooling. According to the U.S. Department of Energy, they use about 50% less electricity to produce as much heat as a furnace or baseboard heater. They can provide central heating through existing ductwork, though recent technological improvements have led to ductless heat pumps that look and function like mini-splits.

A heat pump will save you money on energy bills, though they work best in milder climates that don’t regularly experience freezing temperatures. They don’t burn fossil fuels, so there’s no risk of carbon monoxide, and they’re more eco-friendly than furnaces. However, they’re expensive to install.

Window AC Unit

A window air conditioning system is an all-in-one unit that houses the condenser and air handler in a single casing. The unit sits in the window and vents hot air outdoors while it cools the air inside the room. These units are more efficient than other air conditioners but can only cool one room at a time. They’re low-maintenance and easy to install.

They also take up window space, and not everyone likes the look of a large chunk of machinery in the window. If not properly installed, the unit could fall out and cause damage on higher floors. On ground floors, they can present a security risk because of the partially opened window. However, a window unit is usually the least expensive option if you need to cool a small space on a limited budget.

Packaged Heating and Cooling

Some central HVAC systems combine their heating and cooling elements inside a single unit—typically outdoors. It may consist of a heat pump with added evaporator coils to provide extra cooling or an air conditioner with added heat strips on the interior air handler to create warm air when necessary.

Packaged systems are less common than split systems, which have indoor and outdoor units. They’re most commonly used in small homes to save space and are usually less expensive to install than split systems. They’re also typically less efficient, and since all the components are outdoors, they’re subject to more wear and tear from weather and other natural elements.

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Different types of HVAC systems still share some of the same components. The dropdown tabs below describe some of the most important system components and their functions.

The system’s thermostat allows you to adjust the temperature of your home by automatically telling your HVAC system when to start and stop. Nearly all HVAC systems have thermostats as control systems, though they may be analog or digital. Smart thermostats allow you to regulate your home’s temperature from anywhere in the world.

This component improves ventilation by allowing fresh air to enter your home’s HVAC system. It pulls the humidity out to help prevent mold and mildew growth inside the ductwork. It also vents stale air outdoors.

Air conditioners and heat pumps use this substance to transfer heat indoors or outdoors. The machinery of an HVAC system uses a heat exchanger to convert refrigerant from a liquid to a gas and back again to transport heat.

When refrigerant is in liquid form, it flows through an air conditioner’s evaporator coils, which are located indoors, to draw heat and moisture from the air. As the refrigerant heats up, it becomes a gas. The evaporator coils are one of the most expensive components of an HVAC system.

Gaseous refrigerant travels to the air conditioner’s outdoor condenser unit. Within the condenser, the compressor pressurizes the refrigerant and turns it back into a liquid. Then it can return indoors to pick up more heat.

Both air conditioners and forced-air furnaces require a fan and blower motor to circulate air through the ducts or the living space in your home.

Professional vs. DIY HVAC Installation

In most cases, HVAC installation is a job best left to professionals. Here’s why.

Professional HVAC Installation

HVAC technicians need a current license to be able to install and repair HVAC systems. It’s a complex process that requires specialized knowledge and tools. Central heating and cooling systems typically need ductwork installed, which often requires cutting into the home’s structure. Even if you choose a ductless system, everything needs to be properly anchored, connected, and tested to ensure it runs efficiently. HVAC systems require a lot of energy to run; you may end up with high energy bills or a broken system if you try to install it on your own.

DIY HVAC Installation

There is one HVAC job within the ability of most homeowners: installing a window AC unit. Most of these units are sold in kits that contain everything needed, along with instructions for window anchoring. If the unit is too heavy or you want a more permanent, discreet installation, you can hire an HVAC technician to handle it.


Most homes and commercial buildings have an HVAC system to ensure proper airflow, temperature, and mechanical ventilation. Air conditioners, furnaces, heat pumps, boilers, and ductwork are all common parts of HVAC systems that must be installed, serviced, and cleaned by professional HVAC technicians. When looking for a reputable HVAC company, check the Better Business Bureau (BBB) website for ratings and reviews, and get quotes from at least three local providers before making your choice.

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FAQ About HVAC Systems

What is the difference between HVAC and AC?

The difference between HVAC and AC is that AC stands for air conditioning, and HVAC stands for heating, ventilation, and air conditioning. Thus, AC is a type of HVAC system, and its purpose is to cool and dehumidify indoor air.

How much do HVAC units cost?

The cost of an HVAC unit is heavily dependent on its type and cooling range. A window air conditioner could cost as little as $150, but a central heating or cooling system could cost $6,000 or more.

What does HVAC stand for?

HVAC stands for heating, ventilation, and air conditioning. It encompasses mechanical systems like furnaces, boilers, air conditioners, ductwork, and more.

What are the most common HVAC problems?

Here are some of the most common HVAC problems encountered by homeowners:

  • Continuously running blower
  • Dirty air filters
  • Dirty condenser or evaporator coils
  • Ignition problems
  • Lack of HVAC maintenance
  • Leaking water
  • Thermostat malfunction
  • Tripped circuit breakers
  • Wear and tear
  • Unusual noises

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