Homeowners in the U.S. average $1,900 a year on utility bills, with over 20 percent going to heating and cooling costs. So, it only makes sense to have the most energy-efficient HVAC system for your home — a geothermal heat pump.

What are Geothermal Heat Pumps?

Both the Department of Energy and the EPA endorse geothermal heat pumps. Also known as ground source heat pumps, they’re among the most energy-efficient and eco-friendly ways to heat and cool your home.

Geothermal systems are 50-70 percent more efficient for heating than traditional furnaces. They’re also 20-40 percent more efficient for cooling than standard air conditioners.

(jpproductions, Getty Images)

Unlike systems that burn fossil fuels – such as gas, fuel oil, coal, or wood – geothermal heat pumps don’t produce carbon dioxide greenhouse gas emissions.

About one million geothermal heating/cooling systems have been installed in the U.S. since 1980.

How Does a Geothermal Heat Pump Work?

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

A series of underground pipes absorb heat from the ground in the winter to warm your home.

In the summer, the process is reversed, with heat removed from your home and transferred back into the ground.

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

In a closed loop system, the heat pump circulates a mixture of antifreeze and water through the pipes and back again.

An open loop, on the other hand, draws water from a well or pond, then returns it to the ground after use.

Pipes for a closed loop geothermal system can either be buried horizontally 4-7 feet deep or vertically 150-400 feet underground.

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

A geothermal heat pump can also efficiently heat your home’s water. Waste heat from the compressor can be used to produce hot water at very little expense.

Is a Geothermal Heat Pump Worth It?

Geothermal heat pumps last 25 years on average while underground pipe loops can operate for over 50 years.

Over the life of the system, geothermal heat pumps cost 25 percent to 50 percent less than a traditional system. Homeowners can recoup the added installation expense in as little as five to seven years. Savings and longevity are important factors included in our full breakdown of the pros and cons of geothermal heating.

(Andy Dean Photography)

Find out how much you can save on your home’s heating and cooling with the Bosch Geothermal Savings Calculator.

Geothermal systems are also eligible for a federal energy efficiency tax credit of 30 percent of the cost, up to $2,000, of installing the system. This tax credit is available through the end of 2032.

Both principal residences and second homes are eligible for the federal tax credit, and you may also qualify for additional state and local tax incentives or rebates.

Beyond the tax incentive, you also could be eligible for up to $1,750 for a heat pump water heater and $8,000 for a heat pump for space heating and cooling through the High-Efficiency Electric Home Rebate Program. 

More information is available at Bosch Thermotechnology.

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Editorial Contributors
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Danny Lipford


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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