Many homeowners want to know which heating or cooling system is best for their home. A number of energy-saving choices make it difficult to know which one to select.

Standard air-source heat pumps work well for warm to moderate climates. However, they can become expensive for home heating when the temperature drops below 35 degrees Fahrenheit. They draw heat from the air, causing backup electric heat strips to cut on, creating additional home heating as temperatures lower.

Some homeowners in colder climates look for a more efficient heating alternative. It turns out that source is right in their backyard — a geothermal heat pump.

In this article, I’ll explain how geothermal heat pumps work and their many benefits to help you understand this energy-efficient heat pump system.


How Geothermal Heat Pumps Work

While a standard heat pump uses the temperature of outside air for home cooling and heating, a geothermal one draws on more constant temperatures found underground as the medium of exchange.

Through a series of buried pipes, a geothermal heat pump absorbs heat from the ground to warm your home. In the summer, the process reverses, with heat removed from your home and transferred back into the ground.

A network of buried polyethylene pipes used to exchange heat operates as either a closed or open loop.

In a closed-loop system, a mixture of antifreeze and water circulates from the heat pump through the pipes and back again. An open loop draws water from a well or pond, which then returns to the ground after use.

Installers bury pipes for a closed-loop geothermal system horizontally 4 to 7 feet deep. Or they bury them vertically 150 to 400 feet underground.

Once the heat has been extracted from the fluid, it’s transferred to an air handler and ductwork to your home. This is similar to other forced-air HVAC systems.


The Benefits of a Geothermal Heat Pump

There are pros and cons of geothermal energy. One of the many benefits from geothermal heat pumps is they are eco-friendly and save on those utility bills.

First, unlike systems that burn fossil fuels — such as gas, fuel oil, coal or wood — geothermal ones don’t produce carbon dioxide greenhouse gas emissions.

Second, geothermal systems are 50% to 70% more efficient for heating and 20% to 40% more efficient for cold air than traditional furnaces and air conditioners. They offer high efficiency for homeowners.

Third, since a geothermal heat pump uses the constant temperature of water pumped from a well as the medium of heat exchange. They work better at lower temperatures than air-source heat pumps.


Long-Term Savings, Short-Term Solutions

Geothermal, or ground-source, heat pumps have earned endorsements from both the Department of Energy and the EPA as among the most energy-efficient and eco-friendly ways to warm and cool your whole-house.

While the initial cost of installing a geothermal system is $12,000 to $30,000, the cost is made up in home energy savings in 5 to 10 years.

In addition, Americans installing an Energy Star-approved geothermal heat pump are eligible for a 30% federal tax credit. The 30% tax credit runs through 2032 and then gradually reduces until expiring in 2034.

Want more ways to slash heating bills? You can turn down your thermostat and use the heating effect of paddle ceiling fans for warm air during cooler months.

Finally, a programmable thermostat — especially a smart thermostat with Wi-Fi connectivity — is another way to make your existing HVAC system use less energy. 

Simply set the control to turn the heat up when you’re home and down when you’re away. You can save up to 15% on your energy bill by using less electricity.

A smart thermostat learns your heating and cooling habits and finds additional efficiencies — ways to save on energy costs while keeping you comfortable.


Choosing the right heating and cooling system for your home can be challenging. A geothermal heat pump stands out as an efficient, eco-friendly solution and one I recommend.

Geothermal systems provide reliable heating and cooling while significantly reducing energy costs and carbon emissions. Despite the high initial investment, the long-term savings and federal tax incentives make geothermal heat pumps a smart choice if your seeking comfort and energy savings.

Article Update Log
6/3/24
Reviewed for accuracy, cost data, industry best practices, and expert advice by Laurie Engle.

Frequently Asked Questions

Whats the initial cost of installing a geothermal system?

The initial cost is $12,000 to $30,000 to install a geothermal heat pump.


Whats a good way to slash my heating bills?

Turn down your thermostat by a few degrees and use the heating effect of a paddle ceiling fan to force warm air down during cooler months.


How can I make my heating and cooling more efficient?

There are several ways to may your heating and cooling more efficient.

  1. Change your air filter regularly
  2. Have your HVAC system serviced
  3. Install a smart thermostat

Editorial Contributors
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Danny Lipford

Founder

Danny Lipford is a home improvement expert and television personality who started his remodeling business, Lipford Construction, at the age of 21 in Mobile, Alabama. He gained national recognition as the host of the nationally syndicated television show, Today's Homeowner with Danny Lipford, which started as a small cable show in Mobile. Danny's expertise in home improvement has also led him to be a contributor to popular magazines and websites and the go-to source for advice on everything related to the home. He has made over 200 national television appearances and served as the home improvement expert for CBS's The Early Show and The Weather Channel for over a decade. Danny is also the founder of 3 Echoes Content Studio, TodaysHomeowner.com, and Checking In With Chelsea, a décor and lifestyle blog.

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Laurie Engle

Expert Writer & Reviewer

Laurie Engle is a freelance writer who provides insights to homeowners on topics such as the home warranty industry, relocation issues, and real estate trends. As a licensed Realtor since 2001 Laurie has acquired extensive expertise in dealing with home warranty companies and navigating the intricacies of the real estate market. In addition to her commitment to helping clients with their home buying and selling needs, she maintains a sharp awareness of market dynamics, including property values, interest rates, and local regulations.

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