Furnace, air handler, air conditioner, heat pump and HVAC (Heating Ventilation and Air Conditioning)- are all terms used by heating and cooling systems experts. The trick for the consumer is to understand how these pieces of equipment can keep their home comfortable, be it heating or cooling. Let's concentrate on furnaces and air handlers.
What a resident wants is either a warmer or cooler home than outside, with excellent indoor air quality. Various components work together to achieve this goal, but what you need depends on the climate you live in. You would not install the identical system in Florida as you would in Utah, as the climates are vastly different.
The main purpose of a furnace is to heat your home and it is usually located in the basement. There are several designs of furnaces. In the oil and gas burning furnaces, the central furnace works by blowing heated air throughout your home with a system of piping called ducts. The homeowner can feel this air coming out of the floor or wall registers (grates).
What differentiates various types of furnaces is how the air is heated. There are 4 basic heating systems: electricity, oil, propane and natural gas. Note that in every case, the same basic procedure is followed. The air is heated and then pushed along the duct work to every area of the home. With oil, propane and natural gas, a flame is used to heat the air. With electricity, the flame is replaced by a wire coil that is burning hot. One subset of furnaces is based on a hot water system instead of air being heated, whereas water is heated and then circulated throughout the home to radiators in every room.
While this method is very similar to the hot air system, it has the distinct advantage of not drying the air in the home. Older style furnaces used to require a chimney where the hot air was exhausted after it made its journey throughout the house. But modern day furnaces have increased their efficiency greatly by having a heat exchanger in the system. Instead of exhausting hot air, the only waste product is water vapour; so a chimney is no longer required. If you want to cool your home, you need to pair your furnace with an air conditioning unit.
However, an air handler is quite different. It assists in heating and cooling your home. The unit consists of a blower, filter racks, heating or cooling elements, and sound dampeners. It also hooks up to a series of duct work to blow the air throughout the home, just like the furnace.
But the air handler works best in warmer climates. If you live where the temperature drops below the freezing point, for the air handler to work reliably, it requires preheat coils in the system. Most of them are powered by electricity.