An air conditioning and heat pump tower includes a main casing, a plurality of connecting pipes, a compressor, a front heat exchanger, a rear heat exchanger, a fan unit, and an energy efficient arrangement. The energy efficient arrangement includes a first pre-heating heat exchanger supported in a front compartment of the main casing, and positioned between an outdoor air intake opening and an outdoor heat exchanging portion of the front heat exchanger. The air conditioning and heat pump tower may be operated between an air conditioning mode for absorbing heat from the indoor space, and a heat pump mode for producing heat to the indoor space. A predetermined amount of ambient air may be drawn through the outdoor air intake opening and may be pre-heated by the energy efficient arrangement before delivering to the indoor space.