In order to improve the system efficiency, a heat pump is retrofitted to a conventional run around coil ventilation heat recovery system.  The present paper aims at evaluating the annual performance of both existing run around coil system and the system to which a heat pump is retrofitted. The paper also makes a comparison between the efficiency of these two systems in two different climatic conditions. Dynamic modeling of the system was carried out over a year, using TRNSYS as the simulation tool and the results were presented for different climatic conditions. Results from the annual modeling shows that by retrofitting a well-designed heat pump unit to the system, there is a potential to increase the amount of the recovered heat up to more than 50%. By considering the energy used by the compressor of the heat pump, it can be concluded that the new system looks promising from the economic point of view and it can lead to save a large amount of energy use and money annually.