Heating systems such as heat pumps and combined heat and power cycle systems (CHP) represent a key component in the future smart grid. Their capability to couple the electricity and heat sector promises a massive contribution to the energy transition. Hence, these systems are continuously studied numerically and experimentally to quantify their potential and develop optimal control methods. Although numerical simulations provide time and cost-effective solutions for system development and optimization, they are exposed to several uncertainties. Hardware in the loop (HiL) approaches enable system validation and evaluation under different real-life dynamic constraints and boundary conditions. In this paper, a HiL system of a heat pump testbed is presented. It is used to present two case studies. In the first case, the conventional heat pump testbed operation method is compared to the HiL operation method. Energetic and dynamic analyses are performed to quantify the added value of the HiL and its necessity for dynamics analysis. In the second case, the HiL testbed is used to validate a model of a single family house with a heat pump participating in a local energy market. The energetic analysis indicates a deviation of 2% and 5% for heat generation and electricity consumption of the heat pump model, respectively. The model dynamics emphasized its capability to present the dynamics of a real system with a temporal distortion of 3%.