Geothermal heating: a complete guide

How ground-source heat pumps work

A few feet below the surface, and in boreholes drilled deeper, the earth stays at a fairly constant temperature year-round — typically somewhere in the 45–60°F range depending on location — regardless of whether it's a scorching summer day or a subzero winter night above ground. A geothermal (ground-source) heat pump exploits that stability: it circulates a water or water/antifreeze fluid through buried loops of pipe, where the fluid absorbs (in winter) or rejects (in summer) heat to and from the ground, then uses a refrigeration cycle — the same basic principle as an air-to-water heat pump — to concentrate that heat and deliver it into the building's hydronic distribution system.

Because the ground stays far more stable than outdoor air temperature, a geothermal heat pump doesn't face the winter efficiency drop-off that an air-source heat pump does. It's extracting heat from 50°F ground in January the same way it would in July, which is why geothermal systems typically deliver the highest and most consistent efficiency of any heat pump type, with Coefficients of Performance (COP) commonly in the 3.5–5+ range.

Loop types

Loop type	How it works	Best suited for
Horizontal closed loop	Pipe laid in trenches a few feet deep across a large area of land	Properties with ample open land, generally the lowest-cost loop option
Vertical closed loop	Pipe run down and back up through one or more boreholes, often 150–400+ feet deep	Smaller lots where horizontal trenching isn't feasible
Pond/lake closed loop	Pipe submerged in a nearby body of water of sufficient size and depth	Properties with adequate water access; typically the lowest installed cost when available
Open loop	Draws groundwater directly from a well, extracts heat, and returns it to the aquifer or a discharge point	Sites with abundant, appropriate groundwater and local permitting approval

Closed-loop systems (horizontal, vertical, or pond) are far more common than open-loop, since they don't depend on local water rights or aquifer characteristics and have fewer regulatory hurdles. The choice between horizontal and vertical loops usually comes down to available land — horizontal is generally less expensive per foot of loop but needs significant open area, while vertical boreholes cost more to drill but fit on small lots.

Efficiency and performance

Because ground temperature is stable, geothermal systems don't suffer the capacity and efficiency losses that air-source heat pumps experience on the coldest days. A geothermal heat pump sized correctly for a building's heat loss can typically supply 100% of both heating and cooling load year-round without a backup heat source — unlike many air-to-water heat pump installations in cold climates, which often pair with a boiler for the coldest days. Many geothermal systems also provide efficient domestic hot water as a byproduct ("desuperheating") during the cooling season.

Installation considerations

• Ground loop installation is the major upfront cost driver. Drilling boreholes or trenching a large horizontal field is specialized, equipment-intensive work, distinct from the mechanical work of installing the heat pump itself.
• Site conditions matter. Available land, soil or rock type, and local drilling costs all affect feasibility and price — a site with easy digging and open land will cost meaningfully less than one requiring deep rock drilling.
• Correct sizing is essential. An undersized loop field won't be able to reject or absorb enough heat over time, gradually degrading performance; a proper design accounts for soil thermal properties and the building's full annual heating and cooling load.
• Distribution compatibility. Geothermal heat pumps pair naturally with radiant floor heating and low-temperature hydronic distribution, though they can also serve ducted air handlers for whole-home heating and cooling.

Cost and payback

Geothermal systems generally carry the highest upfront installed cost of any residential heating option — commonly tens of thousands of dollars once loop field and equipment are both included, varying widely with site conditions and system size. That upfront cost is offset over time by very low operating costs (since the system moves rather than generates most of its heat) and, in the U.S., by a federal tax credit for qualifying geothermal installations that has historically covered a substantial share of system cost. Because the ground loop itself can last many decades with proper design, geothermal is best thought of as a long-horizon investment: higher cost today for lower, more stable operating costs for the life of the building.