Mother Earth Living

A Guide to the Basics of Geothermal Heating and Cooling Systems

New tax incentives and rebates make ground source heat pumps a no-brainer for the efficiency-minded.
By Linda Allen
November/December 2010
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In the middle of New York City, this 6,000-square-foot home and office is heated and cooled with a system of underground pipes burrowed 1,200 feet below the city streets.
Photo By Paul Warchol

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Though they don’t make any noise themselves, geothermal heating and cooling systems are booming these days as architects and homeowners recognize the wisdom in this decades-old, fossil fuel-independent technology. Once used mainly in commercial buildings, these efficient and durable systems are now installed in about 50,000 U.S. homes each year, according to the U.S. Department of Energy.

“Many people think geothermal is a new technology, which makes builders and homeowners reluctant to use it,” says Jim Bose, executive director of the International Ground Source Heat Pump Association (IGSHPA), a nonprofit that promotes ground source heat pump technology. “Actually, it’s an idea that’s more than 150 years old.”

Though geothermal systems can have a high upfront cost, savings in operating costs usually mean the systems pay for themselves in less than a decade. Most systems carry a 50-year warranty and operate at 50 to 70 percent higher efficiency than most other heating systems. As geothermal’s history of documented research and reliability grows, the technology will develop too, says Bose, who has worked in the geothermal industry since the 1970s. New tax incentives and rebates will drive residential use over the next five years, he predicts.

Geothermal basics 

Geothermal takes advantage of one of nature’s wonders—the earth’s nearly constant underground temperature of 45 to 75 degrees Fahrenheit—to provide year-round heating and cooling. Geothermal systems exchange heat with the earth using an underground network of pipes filled with water or refrigerant. In winter, the fluid pulls heat from the ground and transfers it to the house through a heat exchanger. An indoor fan system circulates air through the house. In summer, the system deposits heat from the house into the earth and brings cool air back in.

Nearly any home—old or new—can take advantage of versatile ground source heat pump (GHP) systems. Retrofits often use existing ductwork with minimal modifications, and the slinky loop system makes pipe installation possible even on small, tight lots.

Down to Earth 

Wondering if a geothermal heating and cooling system is right for you? It’s easy to weigh the pros and cons of this clever technology.


■  Efficient and eco-friendly. GHP systems transfer heat instead of creating it, so they don’t rely on fossil fuels. GHPs get high ratings from the Department of Energy and the Environmental Protection Agency. 
■  Durable. Underground loops are protected from external elements such as inclement weather and vandalism, and they rank high in safety with no open flame, flammable fuel or fuel storage tanks; no combustion is involved. Pipes are fusion-welded to prevent leaks. The pipes have a life expectancy of 50 years or more.
■  Inexpensivetooperate. With fewer mechanical operating components, GHPs require less service than conventional heating and cooling systems and have a high reliability rating, keeping maintenance costs low.
■  Space-saving. Hardware for GHPs is smaller than conventional heating and cooling systems and requires a smaller mechanical room, which frees up floor space for other uses.
■  Comfortable. GHP systems maintain humidity at a constant comfort level.
■  Quiet. GHP systems have no outside compressors, which eliminates exterior noise.


■  Expensive initial investment. Installation costs can be several times higher than comparable conventional systems.
■  Difficult to repair. Repairs to underground pipes, though seldom necessary, can be difficult and expensive.
■  Require backup. In extreme climates and rural areas, the systems require an emergency backup system.

Loop Groups 

Residential applications use closed-loop or open-loop systems, depending on land and water availability. In a closed-loop system, water or refrigerant circulates through pipes laid underground. Pipes for a closed-loop system can be laid deep underground in a vertical system or twist over a wider, shallower area in a horizontal system. An open-loop system requires a nearby water source such as a pond, lake or river. After the heat exchange, water from the system returns to its source or is released to an acceptable discharge site. 

System Type  Pros  Cons  Cost 
 Closed-loop – horizontal Most cost-effective for residences; simpler installation Requires more land for installation; requires longer pipe lengths  $$
 Closed-loop – vertical  Good for limited land availability; less disturbance of existing landscapes  Installation may be more difficult and expensive depending on soil quality and type  $$$$
 Pond/lake closed-loop  Takes advantage of available water sources  Requires adequate, quality water source with volume $$$
 Surface body water, open-loop  Takes advantage of available water sources; less expensive to install Requires recharge well or approved discharge site; requires more maintenance; regulatory issues regarding ground water $$$

Don’t Try This at Home 

Although geothermal is a simple concept, it’s an engineered technology that requires specialized training and equipment to install. It’s not a do-it-yourself project. To assure your GHP system performs properly and efficiently, choose an accredited installer. Visit for a list of installers by state. Then be sure to check references. 

For a problem-free, low-maintenance system, use a qualified HVAC designer. Each site must be evaluated individually for geology, hydrology and land availability
considerations, including:

■ assessment of the house’s heating and cooling loads
■ soil’s heat transfer rate
■ type of soil and rock, to determine trench depth
■ water quality test (for open-loop systems)
■ recovery rate of ground water (for open-loop systems)
■ amount of land required for the system
■ underground utilities and sprinkler systems
■ local building codes and regulations

Underground loops for both open and closed systems require a couple of days to install for most residences. Expect the installation to create some landscape disturbance. 

Tax Relief 

You can receive a one-time 30 percent tax credit on a complete ground source heat pump (GHP) system—including installation—through the American Recovery and Reinvestment Act of 2009. The system must meet or exceed federal Energy Star requirements. The tax credit, which has no upper limit, expires in December 2016. Check with an accountant for required forms and information. Some states and utility companies also offer rebates and lower utility rates for GHPs. The systems can help you procure an energy-efficient mortgage, which can help you to qualify for a larger loan.


Ground Source Heat Pumps 


Florida Heat Pump  

WaterFurnace Heat Pumps 


International Ground Source Heat Pump Association   

IGSHPA information videos: and search “IGSHPA”

Tax Incentives and Rebates Database of State Incentives for Renewables and Efficiency (DSIRE) 

The Tax Incentives Assistance Project  

Linda Allen practices ecological and economical green living and gardening in Oklahoma. 

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Post a comment below.


4/10/2014 10:00:56 AM
Geothermal heating systems are a fantastic way of cutting down on costs while maximising efficiency of power within your home. I recently changed over to an system which has worked wonders for me. It heats more efficiently then my previous central heating system, and keeps my feet nice and warm at the same time!

11/6/2013 9:05:32 AM
We built a new home in 1997 in Mississippi. Before building, we attended a multi-week workshop/course put on by the local utility company. We learned so much about insulation, energy efficiency, siting, etc. This helped us see the wisdom of injecting a bit more in construction costs up-front that would yield comfort & savings over the years of living there, especially since the house would be built on family land and we expected to live there a long time. We put in a Water Furnace Geothermal system with vertical loops. The installer first sat down with us to discuss our cubic air space, insulation R levels, types of windows, doors, orientation on the lot, etc. to determine the correct size system. Other contractors we knew just asked the square footage and said, "Oh you need about a ____ ton unit." We could not have been happier with our Geothermal unit. It was quiet, installed in an interior closet, thus was out of the weather & not steadily losing its SEER value, was extremely comfortable, not fluctuating hot & cold, hot & cold, like so many systems do. It was set up to heat our 80 gallon water heater for free with the waste heat from the air-conditioning, which of course in Mississippi is the much longer time of year. We NEVER ran out of hot water! Our house was totally electric, except for gas logs, which were more for emergency back-up than regular use, & our highest electric bill was $130 during an especially hot summer month. The one-story house was close to 2800 s.f. with 9 & 10' ceilings, lots of large windows, & built over a 42" crawl-space. Life has a way of changing our plans & I sold the house in 2008. All of the energy-efficient features were a real selling point too. If I ever build or extensively remodel a home again, I will choose Geothermal. I cannot highly recommend it enough! As an aside, I also had a central vacuum system installed during construction...another FANTASTIC decision!

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