The GreenHP-project (www.greenhp.eu) aims at developing a new, highly efficient urban heating system based on a high-capacity air-to-water heat pump for retrofitting multi-family houses and commercial buildings. For this purpose, a comprehensive multi-level research approach ranging from new heat pump component designs to advanced system integration concepts is pursued. The proposed GreenHP system will be operated with a natural refrigerant, will interact with large (renewable) energy systems, like the smart grid in particular, and will include renewable energy sources, like photovoltaic and solar thermal. Combining the expertise from leading European research institutes and industry partners allows an integration of advanced fan, compressor and heat exchangers in a compact system. Using the natural refrigerant R290, the consortium aims for a heat pump system with minimum environmental impact and a high operating efficiency to provide a heating capacity of 30 kW (102364 BTU/h). The refrigerant charge of the system is minimised by using aluminium micro-channel tubes in both condenser and evaporator. The use of aluminium for the condenser allows an improved heat exchange compared to conventional steel designs. On the air side of the evaporator highly efficient air fins are developed that are less sensitive to icing. Also the fan is optimised for better handling of icing conditions. A bionic distributor will take care to evenly load the micro-channel tubes of the evaporator with refrigerant. Additionally a new compressor concept is developed, which is integrated in a holistic control strategy for most efficient energy management.