The Hybrid System's straightforward design derives maximum efficiency from existing principles. The heating cycle consists of a high efficiency fan drawing air over a simple hot water coil. This is the same mechanism employed by common fan coil units. However, because water loop temperature is scheduled to outdoor air temperature , maximum heat output is available when it is most needed (ie. - when it is coldest outside). As the outdoor air temperature rises, loop water temperatures are lowered providing sufficient heating capability year round while maintaining lowest possible heating costs.