The HRV works by means of a counterflow heat exchanger, which maximizes the transfer of heat from the stale exhaust air to the fresh supply air from outside. With claims of 92% efficiency, it seemed to defy the laws of thermodynamics in my mind, so I was skeptical at first. But it works great! Inside the unit, the outgoing air flows one direction and the incoming air flows the opposite direction, so that the coolest outgoing air just barely warms the cold incoming air, and the warmest outgoing air warms the already-sorta-warm incoming air. By arranging the airflows in this way, the incoming air captures nearly all of the heat from the outgoing air before it leaves the house. Of course, I had to put a thermometer in the fresh air duct to see how well it was doing- On a day when the outside temp was around 10F, and the building was at 58F, the fresh incoming air was being 'preheated' to about 53 degrees. At this rate, the HRV will pay for itself in no time!