Geothermal Heat Pumps for Home Heating & Cooling

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Geothermal Heat Pumps for Home Heating & Cooling

Geothermal heat pumps provide heating and cooling at a fraction of the energy required by traditional fossil fuel burning methods such as boilers or furnaces. In this article we’ll explore how geothermal heat pumps work, types of geothermal heat pumps, and the range of costs and savings of using geothermal heat pumps. Feel free to skip to the section you need:

What is geothermal energy and where does the heat come from?
What is a geothermal heat pump?
How do geothermal heat pumps (and cooling) work?
Types of geothermal heat pump systems
Geothermal installation
How much will it cost to install a geothermal system?
What does it cost to operate a geothermal system?
What are the benefits of geothermal energy?
Pros & cons of geothermal energy

What is geothermal energy and where does the heat come from?

First, when we think of geothermal energy, some people may think of the 350°F blasts of steam shooting out of Old Faithful every 10 minutes or so in Yellowstone National Park.  Or, maybe you think of the 2,100°F molten rivers of lava flowing from the Kilauea volcano in Hawaii.  Both are great examples of the geothermal energy found on the planet.  For hundreds of years, we’ve been working to tap into these geothermal resources to power our world.  In the 1940s, Professor Carl Nielsen of Ohio State University, developed a way to tap into geothermal energy using the first ground source heat pump at his home. Fortunately you don’t need to live by a geyser or active volcano to take advantage of geothermal energy; the temperatures a few feet under the ground are sufficient to power geothermal heating and cooling.  Read on to find out how this amazing technology works and how it could help your home.

What is a geothermal heat pump?

Geothermal heat pumps, also referred to as ground source, earth-coupled, or geoexchange heat pumps use the earth’s ambient temperature to provide heating, cooling and hot water to homes and businesses as opposed to air-source or water-source heat pumps.  Geothermal heat pumps use a combination of underground loops and ground heat exchangers to capture heat from or dissipate heat to the ground.

How do geothermal heat pumps (and cooling) work?

The process of converting energy from the ground to heat your home begins with collecting low grade heat from an underground loop that is fed into a heat exchanger called an evaporator.  Within the evaporator a special refrigerant acts as a heat transfer fluid.  The heat from the ground loop boils the fluid turning it into a gas.  The gas moves into a compressor where it’s put under pressure increasing its temperature.  The gas flows into a second heat exchanger called a condenser, which delivers water to the space heating and supplemental hot water systems.  The gas turns back into liquid after the heat is transferred.  The liquid passes through an expansion valve reducing pressure and temperature before the cycle starts over.  

So, how does geothermal cooling work?  

During hotter months, the system effectively is reversed.  Your heat pump removes heat from the air circulating in your home and transfers that heat back to the refrigerant, which is dissipated back into the ground pushing cool dehumidified air back into your home. Pushing the heat into the ground has distinct benefits over a traditional heat pump or air conditioner. In the summer months when the air outside is already filled with heat, it becomes harder for these devices to operate. They get less efficient when you need them to get more efficient. The consistent underground temperatures help the geothermal system operate more efficiently year round.

Source: U.S. Department of Energy

Geothermal heat pumps provide heating and cooling at a fraction of the energy required by traditional fossil fuel burning methods such as boilers or furnaces.

Types of geothermal heat pump systems

When it comes to the different types of geothermal heat pumps systems you can categorize them into open loop and closed loop systems.

Open Loop Geothermal
Open loop geothermal systems use groundwater rather than the refrigerant that is used in closed loop systems.  Groundwater is very close to the ambient temperature of the surrounding ground and has excellent thermal conductivity.  Open loop geothermal systems can use well water, or water from a pond or lake.  

Closed Loop Geothermal
Closed loop geothermal systems use a network of sealed polyethylene pipe and heat exchangers. When cooling, fluid temperatures rise and heat is dissipated into the cooler earth. When heating, fluid temperatures fall, and heat is absorbed from the earth. A benefit of a closed loop system compared to an open loop system is that it does not require a groundwater supply.  Open loop systems using groundwater can get mineral build up over time from outside contamination. Closed loop systems are typically installed vertically or horizontally or are submerged in a pond or lake.

There are three basic types of geothermal closed loop systems, horizontal closed loop, vertical closed loop and pond or lake closed loop.

Horizontal Closed Loop
A horizontal geothermal closed loop system is when polyethylene piping is laid horizontally 4 to 6 feet underground in a trench ranging from 100 – 400 feet per system ton with 1 to 6 pipes per trench.  A traditional closed loop configuration can take up a lot of space, so an alternative configuration where multiple pipes are coiled, resembling a flattened slinky is an option where there is less land available.  You can use the ground above the piping for driveways, lawns or shallow rooted landscapes without affecting the piping.

Vertical Closed Loop
A vertical geothermal closed loop system, as you may have guessed, is where pipes are run vertically by drilling several 100 – 400 feet deep wells.  The pipes are connected at the bottom of the well by a U-bend and the boreholes are filled with grout with good thermal conductivity properties. Vertical closed loop systems are used where there isn’t enough land and drilling wells is relatively easy and cost effective.

Pond / Lake Closed Loop
Geothermal pond or lake loops use water in which heat is absorbed and dissipated.  Coiled pipes are placed at the bottom of the pond or lake to a minimum depth of 8 feet.  Pond or lake loops typically cost less because there is less need for excavation.  However, you need to have access to a pond or lake and will likely need to navigate local code and permitting requirements.

Geothermal installation

Installing a geothermal system is a major project whether it is part of a home energy retrofit or new construction.  Geothermal projects require specialized skills that aren’t typically within the reach of the home DIYer.  There are roughly 5 major phases to the project that need coordination.  Geothermal projects can take several weeks to several months to complete.  Qualified geothermal contractors can help you navigate each phase of the project.

  • Feasibility & Budgeting – geothermal systems are site dependent, so each site needs to go through a thorough inspection before committing to the project.  During this phase of the project initial research into the project goals (rough heating and cooling load calculations are made), type of heating and cooling system (radiant, ducted or ductless, water heating), current electrical service capacity and condition of the soil is reviewed.  Based on this research an initial project budget can be developed to determine the overall viability of a geothermal system for the site.
  • System Design – once the project budget and feasibility phase are complete, system design begins.  During this phase of the project specific heating and cooling calculations are made which, based on the land and soil conditions, are used to determine the location and dimension of the trench (for horizontal systems) or number and depth of the boreholes needed (for vertical systems).  The heating and cooling load calculations, type of system, along with decisions around heating water will help determine the equipment needed to complete the system design.
  • Excavation & Installation – after a system design is finalized excavation and installation can get scheduled and started.  Excavation generally takes several days of work from start to finish.  Concurrently, the geothermal heat pump, piping and related equipment needed for the project are ordered.  Once excavation is complete, the complete geothermal system is installed, which takes several more days depending on the complexity of the design.
  • Priming & System Test – once the installation is complete the system is primed with the refrigerant (in closed loop systems) and is tested to make sure everything is working before backfilling begins. If everything is working as expected the excavation contractor will backfill and leave the site ready for landscaping.
  • System Training – now we’ve got a working geothermal system that is ready to handover to the owner. Geothermal systems are relatively easy to operate and require very little maintenance so training doesn’t typically take much time.

How much will it cost to install a geothermal system?

Geothermal installation costs typically range in the tens of thousands of dollars and are driven largely by the following four factors:

  • The type of geothermal system you are installing i.e. closed loop (horizontal, vertical or pond/lake) or open loop
  • The suitability of your soil for trenching or drilling i.e. free of large rocks
  • The heating and cooling loads
  • How you plan to use the geothermal energy captured i.e. radiant heating vs. forced air

Currently, there is a 26% federal tax credit through 12/31/2022, which drops down to 22% in 2023.  Geothermal systems that qualify for credit must meet Energy Star standards.  Equipment and labor for the geothermal system are covered under the federal tax credit.  Geothermal heat pump systems solely for heating pools and spas aren’t covered under this tax credit.

What does it cost to operate a geothermal system?

Alright, so you are ready to figure out how much you can save by installing a geothermal system.  Much like the geothermal installation costs there are a few factors that will determine how much it costs you to operate your geothermal heat pump and how much you can expect to save each year and over the life of your geothermal system.

  • Cost of electricity in your area
  • The type and size of your geothermal system
  • Geothermal tax rebates and incentives

Heat pump technology is rated on its coefficient of performance often referred to as COP.  It’s not uncommon for geothermal heat pumps to have a COP of 2.5 to 3.5 or more.  What this means is that every unit of energy used to power the geothermal system, you get 2.5 to 3.5 units supplied as heat.  Most fossil fuel burning furnaces range from 50% to 90% efficiency.  Let’s say you have an old 50% efficiency furnace, you’d have to pay for 2 units of energy to get one unit of heat.  With heating and cooling your home being the largest expanse on your utility bill you can see how the savings start to add up quickly. According to industry groups, ground source heat pumps can provide up to 50% savings on heating and cooling costs compared to conventional systems and The Department of Energy says it takes between five and 10 years to recoup the initial investment in a geothermal heat pump system.

Unlike traditional fossil fuel burning technologies used to heat your space you don’t have annual servicing or maintenance costs to worry about either.  Geothermal systems require very little maintenance and last 4 to 5 times longer than traditional HVAC systems.

What are the benefits of geothermal energy?

OK, so we’ve seen that it’s possible to get a relatively short payback period if you are able to invest in a geothermal heat pump system, but what are the other benefits of geothermal energy?

Sustained Renewable Energy
With geothermal energy you don’t have to worry if the sun is shining or the wind is blowing because you are tapping into an unlimited supply of energy stored below the Earth’s surface.  The constant temperature year round ensures you will have heat or air conditioning when you need it.

No Greenhouse Gas Emissions
Geothermal energy itself produces no greenhouse gas emissions since it doesn’t rely on burning fossil fuels to heat your home.

Free Hot Water?
Well, nearly free hot water.  Some geothermal heating systems can connect a hot water preheater that uses the excess heat from the system.  These geothermal systems are capable of generating up to 50% of the hot water an average home uses.

Pros & cons of geothermal energy


  • A geothermal system provides substantial cost savings compared to other heating and cooling systems
  • Properly designed and installed geothermal systems can last 50 years compared to 10-15 years for a traditional HVAC system
  • Geothermal systems require very little maintenance compared to the annual maintenance required for furnaces and boilers
  • Geothermal systems are a renewable, environmentally friendly source of energy that burn no fossil fuels
  • Geothermal systems produce no carbon monoxide, which eliminates the risk of poisonous gas leaks
  • Geothermal systems work well in nearly all climates and is suitable for all homes and businesses


  • Geothermal system have high upfront installation cost due to the need for skilled contractors, which can be offset by local and federal incentives and financing programs
  • Geothermal systems are highly dependent on your building site
  • Geothermal systems may alter your landscape
  • Geothermal systems aren’t always carbon-neutral because the heat pumps do require electricity and depending on the source of that electricity greenhouse gas emitting coal or gas-fired power plants may provide the electricity you use
  • Open loop geothermal systems may contaminate groundwater

Contractors for Hybrid Heat Pump Hot Water Heater Installation

Finding the right contractor can be the key to having a hybrid heat pump water heater installed correctly and safely, and is certainly easier than doing it yourself. Beyond word-of-mouth recommendations, local building inspectors or trade groups may have a list of licensed contractors in your area.

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