Heat pumps use electricity to capture heat and move it from one place to another. They don't generate heat.

As the pool pump circulates the swimming pool's water, the water drawn from the pool passes through a filter and the heat pump heater. The heat pump heater has a fan that draws in the outside air and directs it over the evaporator coil. Liquid refrigerant within the evaporator coil absorbs the heat from the outside air and becomes a gas. The warm gas in the coil then passes through the compressor. The compressor increases the heat, creating a very hot gas that then passes through the condenser. The condenser transfers the heat from the hot gas to the cooler pool water circulating through the heater. The heated water then returns to the pool. The hot gas, as it flows through the condenser coil, returns to liquid form and back to the evaporator, where the whole process begins again.

Higher efficiency heat pump pool heaters usually use scroll compressors versus the reciprocal compressors of standard units.

Heat pump pool heaters work efficiently as long as the outside temperature remains above the 45ºF–50ºF range. The cooler the outside air they draw in, the more energy they use. However, since most people use outdoor swimming pools during warm and mild weather, this usually isn't an issue.