Combining heat pumps with desiccant dehumidification enables the development of hybrid cooling, heating, hot water, and ventilation systems with improved functionality and reduced energy consumption. The efficiency and performance gains are achieved through independent removal of sensible heat (dry air temperature) and latent heat (heat of moisture). By removing moisture with the desiccant wheel, the compressor no longer needs to cool the air below the dew point, resulting in less electrical energy consumption. Regeneration of the desiccant wheel can be achieved with waste heat from the vapor compression cycle. The same waste heat produces domestic hot water when desiccant dehumidification is not needed.