The typical all-electric heating system is comprised of a furnace and a heat pump that are connected to a thermostat. The furnace is equipped with a fan that moves the air across a series of heating elements similar to those that you would find in a toaster. The heated air is then forced through the duct system to heat the home. The thermostat tells the system to kick on when the temperature falls below the desired setting. Since the heat pump is more efficient than the furnace, it will normally cycle on first. The heat pump extracts the heat that is already in the outdoor air and warms it to the desired temperature over the coils. When the outdoor temperature falls below a certain point, the furnace kicks in to heat your home.