This type of air-to-water heat pump is called a "split system" heat-pump water heater; it is designed to extract heat from outdoor air rather than indoor air. The main advantage of locating the compressor outdoors is that these water heaters don’t lower the temperature of the indoor air during the winter.

The only difference between a split system heat pump and a regular air conditioner is the ability to run backwards. So, instead of just taking the heat out, a split system heat pump can bring heat back inside when the weather turns colder.

Limited Effectiveness in very Cold Temperatures: Pool heat pumps are less effective in very cold temperatures and may not be able to keep the pool water at a comfortable temperature during winter months in colder climates.