The working principle of the organic Rankine cycle is the same as that of the Rankine cycle: the working fluid is pumped to a boiler where it is evaporated, passed through an expansion device (turbine, screw, scroll, or other expander), and then through a condenser heat exchanger where it is finally re-condensed.

The Organic Rankine Cycle's principle is based on a turbogenerator working as a conventional steam turbine to transform thermal energy into mechanical energy and finally into electric energy through an electrical generator.

An organic Rankine cycle (ORC), is fundamentally the same as a steam Rankine cycle; however, it uses a lower boiling point organic fluid to better match its operation to lower temperature heat sources. ORC systems can achieve better efficiencies than steam turbines for smaller systems (less than a few MW_e).

A heat pump upgrades lower temperature heat source and lifts it to a higher temperature, whereas the Organic Rankine Cycle (ORC) converts waste heat to power (mechanical or electrical). Waste heat sources occur in commercial and industrial operations, and mobile and stationary internal combustion engines.