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Geothermal energy

How Much Does A Geothermal Energy System Cost?

Water to water heat pump

If you want to heat and cool your home using renewable energy instead of fossil fuels, there are several systems available today that can help you reduce your energy bills and also the carbon footprint of your home or company.

Just bellow our feet, the earth is always at a consistent temperature of about 50°F (10°C), so a looped pipe filled with water or any antifreeze, can tap in that constant temperature of 50°F, to produce heating and cooling for your home.

A geothermal heat pump can use the constant temperature provided by the geothermal resource of the planet, to cool the home during the summer (by removing the excess heat from the house and replacing it with cooler air from the ground), and also to heat the house during the winter (by pulling heat out of the ground and using it inside the house to create a warm and cozy environment).

The same geothermal heat pump can also provide hot water for your showers and dishes, and because is a very efficient system, which doesn’t require the use of fossil fuels.

How Does A Geothermal Heating and Cooling System Work?

We already know that just below our feet, the ground has a constant temperature of about 50 degrees Fahrenheit all year round.

A geothermal heating and cooling system will harness the difference in temperature between the ground and the outside air to provide heating and cooling for your home.

All geothermal systems consist of two major parts:

1. A heat pump that sits inside the house (usually replaces the furnace in the basement).

2. An underground system of pipes (ground loops) that are usually installed in your yard.

How does the system work to provide heating and cooling for the house?


1. Step one

A pump is used to circulate a solution based on water (a mixture of water and glycol) through the underground pipe system to absorb the constant heat in the ground, and transport that heat to the geothermal heat pump.

2. Step two

Once it reaches the heat pump, the solution based on water exchanges its heat with a liquid refrigerant.

3. Step three

The liquid refrigerant turns into a vapor when passing through the vapor-compression cycle, and the heated vapor enters the heat pump’s compressor where the pressure is increased to raise its temperature — forces the vapor to enter into a small space.

4. Step four

The hot vapor obtained is sent to a heat exchanger where it will transfer its heat to the air.
The hot air will be then distributed through the entire house using the duct system of the building.

A second pump is used to move the cool air from the house and replace it with hot air.

An extra pipe is used to heat the hot water used inside the house for showers and for the dishwashing machine (domestic water).


During the summer, we have extra heat in the house, so the geothermal heat pump will work to remove that excess heat from the house, but before sending the heat to the geothermal well, the heat will be used to produce additional hot water for the house.

The cold water will be sent to a preheating tank (is not connected to any power) and will be heated using the excess geothermal resource before going into the traditional water tank.

During the summer, the geothermal heat pump will work in reverse, by extracting the heat from the house and transferring it through the loop system to be absorbed into the ground.

Types of Geothermal Configurations

When we talk about geothermal heat pump systems, we have two categories and three configurations.

Closed Loop Systems vs. Open Loop Systems

1. Closed loop systems

These are the most common loop systems used by geothermal heat pumps when water sources are limited, or there are prohibitive environmental regulations (regarding pond configurations).

These systems use a mixture of water and antifreeze, which transfers heat from the ground to the heat pump (to heat the house during the winter), or removes heat from the house to be absorbed in the ground (to cool the house in the summer).

2. Open loop systems

These systems use well or ground water, and work by taking clean water from one well (intake well), which is then discharged into the sewage system or in a different well.

What Factors Can Influence the Costs of a Geothermal Installation?

The costs of a geothermal installation can be influenced by factors such as: climate, soil composition, local regulations, open loop regulations, the square footage of your home, and the maintenance service of the heat pump.

1. Climate

A geothermal system can work well in every climate, however, in very cold climates (extreme weather), installing a geothermal heat pump could be difficult and more expensive (the pipes must be installed deeper in the ground, which will involve more materials, higher labor cost, and additional heating and cooling elements must be installed to assist during extreme temperature fluctuations.

2. Soil Composition

The composition of the soil in your yard is also important, because a soil rich in saline is very corrosive to metal pipes.

At the same time, a very dry soil will require additional irrigation (a moist soil can transfer heat better).

To understand what type of soil you have in your area, a professional soil test will be done, which will add to the general costs of the installation.

3. Local Regulations

Local and state regulations can vary greatly from state to state, and this is the reason why you should start by checking with your local regulatory agency and state environmental and building regulatory agencies, to see if they limit the types of materials used in geothermal installations, and if there are groundwater protection regulations in force that could prohibit open loops.

Any local or state regulation can limit the type of materials used, which could increase the costs of the geothermal system.

4. Open Loop Regulations

If you plan to install an open loop system, you have to gain state water rights and also discharge permits, which will again increase the cost of the system.

The Environmental Protection Agency (EPA), may also require a National Pollutant Discharge Elimination System Permit (NPDES), to install an open loop system.

States may charge fees for these permits, and this increases the costs with the installation.

5. Home Square Footage

A 2,000 square foot home (185 square meters house) requires a 3-ton geothermal system, and one ton equals about 12,000 BTU’s (British Thermal Units).

Knowing this value, you can easily calculate what geothermal system will suit your home.

What is important here is to understand that for two homes with similar square footage, the geothermal system installed may use heat exchangers with different sizes, and also different lengths of looping.

6. Heat Pump Maintenance Service

A heat pump requires inspections done two times a year done by a licensed and experienced HVAC contractor.

Costs Involved When Installing A Geothermal System At Home

In terms of prices, the average cost paid by homeowners to install a geothermal heating and cooling system is around $8,000.

For an average 2,000 square foot home, the United States Department of Energy (DOE) says that the price paid is around $2,500 per ton, which means that the installation of 3-ton geothermal system will cost the owner around $7,500.

For repairs and maintenance, the average service will cost about $350, but for simple maintenance issues you will pay only $50.

In case you have to replace the compressor, you will pay around $1,700.

Regarding the geothermal configurations, you have to know that for a 3-ton geothermal system you will need about $1,500 feet of looping.

For horizontal looping you will pay around $800 per ton, for vertical looping about $1,500 per ton, and if you use a pond (a body of water at least 8 feet deep) you have to pay about $800 per ton.

A professional soil test will cost the owner about $1,300, and for permits (the EPA fee), the owner can pay up to $2,500.


A geothermal system uses a renewable resource provided for free by the very hot core of our planet.

If we can use a heat pump to have heating and cooling in the house and also hot water for domestic use, why not to use such a renewable system?

Not to mention that a geothermal system can be one of the cheapest sources of heating and cooling available for homeowners today.

Having your own heat pump that creates a comfortable environment in the house, will not only help you save money on long term, but will also reduce the carbon footprint of your building.

Article written by:

I write about the renewable energy sector, electric cars and climate change issues. I love nature and good food, so I travel all over the world to see new places and meet new people. Magda Savin

1 Comment

  1. Dan

    I want to install a water to water heat pump in the basement of my house to heat my home during the winter because by now, I’ve paid pretty large electric bills using an electric water heater and AC units with inverter to heat the entire building (around 2,000 square foot).

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