A typical air conditioning or heat pump system is what is called 'air source'. It uses outside air as the source of heat for heating or to reject waste heat to in cooling. Most air source systems use an outdoor unit mounted on the roof, wall or on the ground, outside the building connected by pressurised refrigerant pipes to an indoor unit. VRF systems are more complex and connect multiple indoor units to a smaller number of outdoor units.
A Climatemaster water source system has no external refrigerant pipes. It has a water loop which acts as the source of heat in heating mode and where heat is rejected to in cooling mode. This water loop is connected to a heat source and method of heat rejection in a Water Loop system or to a series of pipes buried in the ground in a Geothermal system. Or both in the case of a hybrid system.
A Geothermal system is inherently efficient because it uses the stable energy in the ground for heating and cooling rather than the widely varying temperatures in the atmosphere.
Any water source system is also inherently energy efficient because the units in cooling supply heat to those units in heating.