The ceiling fan can be a significant cost saver during the summer months. Traditional ceiling fans push hot air down and are estimated to save as much as 40% on air conditioning costs during hot weather. Since heat rises, designers developed a heated ceiling fan that not only redirects the hot air down, but also reheats it to provide greater efficiency during the winter months.

A heated ceiling fan is installed just like regular fans. Unlike the regular heating fan, though, the heated ceiling fan has a heating element, which can be turned on or off in order to redirect the flow of warm air downward. Most people, particularly those who live in two-story dwellings, have difficulty maintaining desirable warmth levels in their homes because of heat loss. Those who live in homes with high ceilings often find it takes much more energy to heat a home because the heat naturally escapes to the upper portions of the ceiling, or is released through windows that are not double-paned.

Even with the best traditional forced air, ducted heating systems, energy is wasted because the parts of the home that do not require heating, are heated nonetheless. Heat tends upward, so if one were to accurately measure the temperature of a room with 12 feet (3.66 m) ceilings, one would find higher temperatures toward the top of the ceiling.

A warm ceiling does not translate to warm people, as the bottom half of the room is the last part of the house to receive heat. The heated ceiling fan can at least partially correct this problem by redirecting the flow of air downward, and since it also reheats the air, temperature loss of air flowing downward is minimal.

In homes that are two or more stories high, often the upper stories are a great deal warmer than the lower stories. Thermostats frequently measure the temperature in the bottom half of the house with vented heating systems. So while people on the bottom floor may still feel the house is too cold, those in the upper stories are usually uncomfortably warm.