Air Heat Pump Water Heater transfer heat by circulating a substance called a refrigerant through a cycle of evaporation and condensation (see following figure). A compressor pumps the refrigerant between two heat exchanger coils. In one coil, the refrigerant is evaporated at low pressure and absorbs heat from its surroundings. The refrigerant is then compressed en route to the other coil, where it condenses at high pressure. At this point, it releases the heat it absorbed earlier in the cycle. An air source heat pump has three cycles: the heating cycle, the cooling cycle and the defrost cycle