The Daikin Compact Water Source Heat Pump Package Unit uses a water source heat pump to transfer heat between the refrigerant and the water loop, which can be a closed loop or an open loop system. The unit comes in a compact size and is designed for easy installation in tight spaces.

One of the advantages of this type of system is that it can provide both heating and cooling from a single unit, which can result in lower installation and operating costs compared to separate systems. It is also an energy efficient option, as the heat pump can extract heat from the water loop, which can be heated by a renewable source such as a geothermal well or a solar thermal collector.