In recent years the use of heat pumps for space heating has spread widely. The technology development allows building of very efficient heat pumps equipped with inverter driven variable speed compressors. Though several studies were carried out in the past comparing on-off and modulating strategies in heat pump units, only few works considered the whole heat pump system (which includes also heat source, tank, building and climate). Moreover, because of lack of knowledge about cycling losses, most of comparisons between modulating and on-off strategies did not consider the effects of the reduced COP of a system at start-up. In this work simulations were carried out considering both on-off and modulating air-to-water heat pump systems in a single family house located in Padua (North-East of Italy). The aim of this study is to evaluate how the heat-pump sizing, the tank sizing and the cycling losses phenomenon can influence the SPF of both the systems (on-off and modulating). To investigate what are the conditions which let modulating heat pump plants having better performances than on-off heat pumps is another main objective of the study.