How Does Geothermal Heating Work?
Geothermal heat pumps 1 use the fact that Earth remains at a fairly constant temperature year-round. It is cooler beneath the surface in the summer. It is warmer in the winter.
Geothermal heat pumps, also called ground source heat pumps (GSHPs), use a series of coils that spread beneath the Earth’s surface. They carry refrigerant through the coils, exchanging heat. In the winter, they take warmth from the ground and compress it, raising its temperature. This heat is distributed through a heat exchanger that creates forced hot air or hydronic heating, efficiently warming your home. In the summer, the system runs in reverse, taking the heat from your home and depositing it in the earth, where it cools down.
The system uses electricity to operate, but much less than other HVAC systems. Only the fan and compressor run on electricity. The actual energy used to heat and cool your home comes from the earth. This is different from geothermal energy, which creates electricity from inside the earth.
Geothermal Heat Pump Costs by Type
The type of geothermal system you install depends on whether this is new construction or a retrofit, how much land you have, what surface soil you have, and whether you have an aquifer or lake near your home. There are two basic systems, closed and open loop. Closed loop systems are the most common. Open loop systems are less common and may only be installed in areas with an ample source of groundwater. Below are average costs for both open and closed loop geothermal systems.
| System Type | Average Cost (Installed) |
|---|
| Open Loop | $10,000 - $30,000 |
| Closed Loop | $12,000 - $40,000 |
Open Loop Geothermal Heat Pump
An open loop system is less expensive to install, costing between $10,000 and $15,000 if you already have a well. If you need to drill a well, additional costs bring the total cost closer to $15,000 to $30,000. However, open loop is not that common because it requires a sufficient amount of groundwater, at least 7.5 gallons per minute. It uses this water directly to heat and cool your home, taking water in, heating or cooling it, then dumping the water out again. There are no pollutants, but most municipalities do not allow the water to be dumped out again, so they do not allow this type of system.
Closed Loop Geothermal Heat Pump
Closed loop costs more than open loop, ranging from $12,000 to $40,000, depending on the type of closed loop system you have. Closed loop systems operate in three basic methods, horizontal in-ground, vertical in-ground, and lake loop installations. In a closed loop, refrigerant or water is continuously circulated through the system. It does not take in or dump liquid at any time during its operation. It does not need an aquifer to work like the open loop system, so you have more options for installation.
| Type of Closed Loop System | Average Cost Range (Installed) |
|---|
| Pond / Lake | $12,000 - $32,000 |
| Horizontal | $15,000 - $35,000 |
| Vertical | $15,000 - $40,000 |
Pond / Lake Closed Loop Pond Geothermal System
A pond or lake closed loop pond geothermal system costs between $12,000 and $32,000. If you have a pond or lake on your property and it is deep enough to handle the coils placed at least 6 feet below the surface at all times, you can install your system for slightly less money. Pond or lake closed loop systems do not rely on drilling, so you often have lower costs. They take energy from the lake water. However, unlike an open loop system, this system uses refrigerant. Not every property with a lake or pond is eligible for this system. Check with your local authority to determine if your home qualifies.
Horizontal Geothermal Heat Pump
Horizontal closed loop systems cost between $15,000 and $35,000 and are one of the most common if you have enough space because they are very efficient and less expensive to install. They require a lot of space, about 400 feet per row, to install the coils underground. But because they do not need to go down much deeper than the frost line, they are less expensive to install than vertical systems. However, the larger the system, the larger the area needed, and the colder the climate, the deeper it needs to go, increasing the total price.
Vertical Geothermal Heat Pump
Vertical systems cost between $15,000 and $40,000 and take up less space than horizontal systems, burying the coils much deeper into the earth. Typically, several wells are dug, and the coils are sunk into the wells, connecting the bottom. So, they are installed in smaller footprintsand smaller yards. They are also a good choice if the topsoil layer is not conducive to horizontal installations.
Geothermal Heat Pump Cost by System Size
When installing a geothermal heat pump, costs are based on the system size, measured in the number of tons. One ton equals 12,000 BTU, and the required size depends on how large your home is. For example, a small starter home of around 1,000 sq.ft. could use a 2-ton system. The average family home is around 2,500 sq.ft. and needs a 5-ton system. Heat pump designs are similar regardless of size, so it is best to consult a professional installer who can give you the best options for your required capacity. Below are common geothermal system sizes and the associated cost of installing a new geothermal heat pump.
| System Size | BTUs | Average Cost (Installed) |
|---|
| 2 Tons | 24,000 | $5,000 - $15,000 |
| 3 Tons | 36,000 | $10,000 - $25,000 |
| 4 Tons | 48,000 | $15,000 - $30,000 |
| 5 Tons | 60,000 | $20,000 - $35,000 |
| 6 Tons | 72,000 | $25,000 - $40,000 |
Cost of a 2 Ton Geothermal Heat Pump
The average cost to install a 2 ton geothermal heat pump is $5,000 to $15,000. This is a good choice for smaller townhomes and single-family homes under 2,000 sq.ft. with two or three residents. A 2 ton geothermal heat pump provides 24,000 BTU, so it is best used in places with relatively warm weather.
3 Ton Geothermal Heat Pump Cost
A 3 ton geothermal heat pump installation costs $10,000 to $25,000. Three tons is equivalent to 36,000 BTU, making this size heat pump ideal for tropical climates like Florida or Texas. Small to medium-sized single-family homes around 2,000 sq.ft. can use 3 ton geothermal heat pumps to stay comfortable.
4 Ton Geothermal Heat Pump Cost
Expect to pay around $15,000 to $30,000 for a 4 ton geothermal heat pump installation. This is the most common size for your standard American home, offering 48,000 BTU, so it works well throughout the Midwest and in warmer climates. If your home is 2,000 to 2,500 sq.ft., the 4 ton size is probably best for you.
5 Ton Geothermal Heat Pump Cost
A 5 ton geothermal heat pump costs $20,000 to $35,000 to install. Homes around 2,500 to 3,000 sq.ft. with three, four, or five residents can use a 5 ton heat pump for adequate heating and air conditioning. With a 5 ton heat pump, you get 60,000 BTU, suitable for the colder parts of the country with extreme winter temperatures.
6 Ton Geothermal Heat Pump Cost
If you want a 6 ton geothermal heat pump, be prepared to pay $25,000 to $40,000 for the unit and its installation costs. With 72,000 BTU, 6 ton geothermal heat pumps are ideal for homes over 3,000 sq.ft. with five to six residents. This size is commonly found in the northern U.S., where low wind chills mean there is a high demand for warm heating.
To figure out how many tons of geothermal heat pump capacity you need, consider the square footage of your home. As with any HVAC system, the larger your home, the larger the geothermal heating and cooling unit needs to be. In addition to size, the type of system, climate, and efficiency standards also play a role in the overall cost. For an estimate of your project costs, keep in mind the average cost of geothermal heating is $5 to $10 per sq.ft. Here are the costs of geothermal heating systems 2 based on average home sizes.
| Home Size | Average Cost (Installed) |
|---|
| 1,000 sq.ft. | $5,000 - $10,000 |
| 1,500 sq.ft. | $7,500 - $15,000 |
| 2,000 sq.ft. | $10,000 - $20,000 |
| 2,500 sq.ft. | $12,500 - $25,000 |
| 3,000 sq.ft. | $15,000 - $30,000 |
| 3,500 sq.ft. | $17,500 - $35,000 |
| 4,000 sq.ft. | $20,000 - $40,000 |
Heat Exchanger vs Direct Exchange
Closed loop systems operate in two ways: a heat exchanger changes refrigerant for an antifreeze solution with flexible plastic tubing, or a direct exchange system circulates the refrigerant through copper tubing. For direct exchange systems, the lack of a heat exchanger is made up of a larger compressor and the higher cost of copper, making costs about the same between the systems. Direct exchange is best in moist soil areas, while heat exchangers are best for corrosive soils that do not support copper. Heat exchangers are most common and more affordable, costing around $12,500 to $29,000 to install. Expect to pay $2,500 to $6,000 more for direct exchange systems because of the refrigerant circulated through copper pipes below ground.
| Type | Average Cost Range (Installed) |
|---|
| Heat Exchanger | $12,500 - $29,000 |
| Direct Exchange | $15,000 - $35,000 |
Heat Pump Package Unit vs Split System
When you purchase your heat pump, the area where you plan to install it may influence the type of system. If the area is easy to access and has room for the entire unit in one space, two heat exchangers and a compressor, then purchase a packaged unit. This is less expensive and easier to install because the entire unit comes together, factory welded.
If you do not have room for all three pieces to be installed together, you need a split system. Split systems need to be connected and welded on-site, so they tend to cost more but provide more flexibility in where the components are installed.
The cost for a packaged unit is around $3,300 to $8,000. The price of a split system is between $3,850 and $8,000. The real added cost comes during installation. Expect to pay around $3,000 more to install a split system. Overall, it is around $12,000 to $25,000 to install a packaged unit and $15,000 to $35,000 for a split system.
| Type of Unit | Average Cost Range (Installed) |
|---|
| Packaged Unit | $12,000 - $25,000 |
| Split System | $15,000 - $35,000 |
Geothermal Heat Pump Water-to-Water vs Water-to-Air
Your geothermal heat pump heats your home using forced hot air or forced hot water. The type of heat pump needs to change based on how it heats your home.
Water-to-air heat pumps use heated liquid inside the system to heat forced hot air that runs through your ducts. These heat pumps are efficient and renewable, making them a good choice for homeowners who want a sustainable investment. Water-to-water heat pumps use the liquid heated in the system to heat the water that runs through your hydronic heating system to your radiator or radiant floor heating. If you have forced-air heat with a furnace, you need a water-to-air heat pump. If you have a boiler for radiant heating, a water-to-water heat pump is required.
Water-to-water systems are more complex and cost more to purchase and install. The system itself costs between $4,000 and $8,000 and roughly $2,000 to $4,000 more to install than a water-to-air system, which costs $3,300 to $7,500. When looking at total installation costs, water-to-air may cost $12,000 to $25,000, compared to an average range of $15,000 to $35,000 for water-to-water.
| Type of Heat Pump | Average Cost Range (Installed) |
|---|
| Water-to-Air | $12,000 - $25,000 |
| Water-to-Water | $15,000 - $35,000 |
Geothermal Heat Pump Cost by Brand
Another way to look at geothermal heating costs is by brand. Many brands make geothermal heat pumps. Some are slightly more affordable than others. Overall, most brands offer all the most popular sizes and features for heat pumps, so you can choose the specific design that best suits your home requirements. These manufacturers provide warranty protection, usually around ten years but it may vary based on the brand and the specific product.
Lower-end and mid-range brands include Bosch, ClimateMaster, Carrier, American Standard, Trane, and WaterFurnace. These brands are more affordable but not quite as premium and high-tech as Bard and Lennox, which make more expensive geothermal heat pumps with enhanced energy efficiency and automated features. Here are the average costs of a 60,000 BTU (5-ton) heat pump from each brand.
| Brand | Average Cost (Materials Only) |
|---|
| Bosch | $3,000 - $5,000 |
| ClimateMaster | $4,000 - $6,500 |
| Carrier | $4,000 - $7,000 |
| American Standard | $4,200 - $7,000 |
| Trane | $4,200 - $7,000 |
| WaterFurnace | $4,500 - $7,000 |
| Bard | $5,000 - $7,500 |
| Lennox | $5,000 - $7,500 |
Heat Pump Compressor Cost by Type
The compressor is an important part of your geothermal heat pump system. It raises the temperature of the ground energy to heat your home effectively. They come in three different types, which impact the system cost, how well the system works, and how efficient it is. Below are the costs for heat pump compressor parts, which will be included in the overall geothermal heat pump installation labor costs.
| Compressor Type | Average Cost (Materials Only) |
|---|
| Single-Stage | $750 - $2,000 |
| Dual-Stage | $1,500 - $3,000 |
| Variable-Stage | $2,500 - $5,500 |
Single-Stage Compressor
A single-stage compressor costs between $750 and $2,000. Single-stage is the cheapest but the least efficient and comfortable of the three types. It runs at one constant speed, meaning it may run at a higher speed than necessary, using more electricity. Because it turns on and off more quickly, it produces cold and hot spots in the house.
Dual-Stage Compressor
Expect to pay between $1,500 and $3,000 for a dual-stage compressor. A dual-stage compressor runs at low or high speeds depending on the need. It runs at low speed during more moderate times of the year, only going to high when needed. This makes the temperature consistent and lowers energy bills without hot and cold spots.
Variable-Stage Compressor
A variable-stage compressor costs around $2,500 to $5,500. A variable-stage compressor switches among multiple stages to run at just the right speed for the temperature required. Therefore, it is much more efficient and produces more even temperatures. But some people in colder and hotter climates find that it does not save enough on energy bills to offset its higher cost.
Labor Cost to Install a Geothermal Heat Pump
The cost to install the entire geothermal heating system is between $12,000 and $30,000 for most homes, with installation making up roughly $7,000 to $22,000 of that cost. The system and supplies make up the rest of the price. Qualified installers from a local utility company need to install the geothermal heat pump, with hourly labor rates ranging from $50 to $100, depending on experience. Most heat pumps take at least four to five hours to install. Larger systems may require seven to eight hours of installation labor. It depends on your property and the complexity of the system, so your installer can give you a better estimate of the expected timeline and costs.
Most of the expense, roughly 50% to 75% depending on the system, comes from the installation. This is because it is extremely labor-intensive and requires a great deal of equipment to excavate, lay the pipes, weld the system shut, fill it with refrigerant, and then hook it up to your ducts or hydronic heating system. If you need ductwork or new radiators, this increases costs even more. Also, keep in mind that geothermal heat pump installations in new construction cost between 20% and 40% less than retrofit installations in older homes. Retrofits are quite complex and require modified ductwork, significant excavation, new electrical wiring, and old HVAC component removal.
Geothermal Heat Pump Replacement Cost
The outdoor portion of your heat pump lasts up to 100 years, depending on conditions, and likely will not need replacing during your lifetime. The indoor portion of the system may need to be replaced, but only after decades of use and if the heating/cooling starts malfunctioning or you want to lower energy usage bills. If you have an older system and are upgrading the interior portion, expect replacement costs to be around $2,000 to $6,500 for a 5-ton system, including installation and parts. Replacing the entire system could cost closer to $10,000 depending on how it is installed and whether it is open or closed sourced, vertical or horizontal.
Geothermal Heat Pump Size
Like any HVAC system, heat pumps come in several sizes, usually sold as tons. A 1-ton system equals roughly 12,000 BTUs. If you have a current system that uses 48,000 BTUs, you need a 4-ton geothermal heat pump.
While several factors determine the system size you need, calculate a basic approximation by checking your current system size or determining your climate zone and the amount of space in square feet you need to heat. Find your climate zone by consulting this U.S. climate zone map.
Because heat pumps heat and cool your home, the system size needed varies greatly depending on where you live because you need to size up for very hot or very cold climates to meet the demands of the space. To determine the size of the system you need, multiply the square feet of your home by the number of BTUs required by your zone.
| Zone | BTUs per Square Foot |
|---|
| Zone 1 | 30 - 35 |
| Zone 2 | 35 - 40 |
| Zone 3 | 40 - 45 |
| Zone 4 | 45 - 50 |
| Zone 5 | 50 - 55 |
| Zone 6 | 55 - 60 |
| Zone 7 | 60 - 65 |
Geothermal Heat Pump Efficiency Rating
All HVAC systems have varying degrees of efficiency, meaning how much energy they use to produce heat. Because heat pumps provide both heating and cooling, they have two different efficiency ratings, one for each.
The Coefficient of Performance (COP) for heating measures how well the unit uses energy to heat the home. A geothermal heat pump has a COP of 3 to 5, meaning that for every unit of electricity it consumes, it produces 3 to 5 units of heat. This is much more efficient than other systems, which may have COPs of just 1 or 2 in very high-efficiency systems.
For cooling, the system is rated on the Energy Efficiency Ratio (EER). The higher the EER on a cooling appliance, the more efficient it is at cooling your home. Geothermal heat pumps have an EER from 13 to 30. Anything above an EER of 12 is considered high efficiency, which makes all geothermal heat pumps high-efficient cooling appliances.
Geothermal Heating Monthly Cost
Geothermal heat pumps are much more efficient to run than other heating systems. They save you between 30% and 60% on heating and between 20% and 50% on cooling. According to Energy.gov, they pay for themselves in 5 to 10 years, depending on available energy incentives and power costs in the area. An appropriately sized and installed geothermal heat pump should cost around $100 to $200 in electrical fees every month. Bigger systems need more electricity and cost a little bit more. Remember that backup heaters during extremely cold spells increase usage and the cost, so it is best to talk with your energy provider for an updated estimate.
Benefits of Geothermal Heating
Geothermal heating is one of the most energy-efficient heating and cooling methods used for your home regardless of climate. This method sees savings year-round over other types of heating and cooling systems.
Geothermal heating is also better for the environment because it does not directly use fossil fuels and uses less electricity than other systems. Therefore, it does not contribute as much to greenhouse gasses. It is also safer with no risk of carbon monoxide or gas leaks. You do not need to store additional fuel on your property like oil or propane 3. In addition, if a desuperheater 4 is added, you may also use the system to heat your hot water.
Cost of Geothermal Heat Pump vs Conventional
The main difference between geothermal and conventional heat pumps is that geothermal collects heat from the ground while air-source or conventional systems source heat from the air. Geothermal heat pumps are more efficient due to the relative stability of underground temperatures compared to the fluctuation in above-ground air temperatures.
Consistency and efficiency make geothermal heat pumps ideal for regions with harsh winters or hot summers, as these systems handle temperature changes better. However, geothermal heat pumps are more expensive to install, so homeowners looking for a budget-conscious investment or those in mild temperate regions may be better off with a conventional heat pump. A conventional heat pump costs $5,000 to $20,000 to install, while a geothermal system has a higher initial cost of $12,000 to $30,000.
| Type of Heat Pump | Cost (Installed) |
|---|
| Conventional | $5,000 - $20,000 |
| Geothermal | $12,000 - $30,000 |
Enhancement and Improvement Costs
Duct Zoning
Zoning your home gives you better control over the heating and cooling of each area. It is more complicated to install with additional thermostats 5, a zone control board, and dampers. Expect to add at least 3,000 to $4,000 to the cost of the project.
Home Insulation
Adding more insulation to your home increases energy efficiency, which means that you may use a smaller-sized geothermal system. Home insulation costs $3,000 to $7,000 and can be added to existing walls or new builds with several options like blown-in, wet spray, and loose fill insulation.
Energy-Efficient Windows
Making your windows more energy efficient also lowers heating and cooling costs. A new set of replacement windows could be anywhere from $3,500 to $10,500. You can choose from fiberglass 6 or wood replacement windows to improve energy efficiency and keep geothermal costs under control.
Home Energy Audit
Before making any changes to your home’s HVAC or insulation, getting an energy audit pinpoints the exact changes you need to make to create a more energy-efficient home. The cost of an audit is around $250.
Programmable Thermostat
When installing geothermal heating and cooling or any type of HVAC system, you need a thermostat to control when the system turns on and off. This programmable device makes it easy to control the temperature inside your home, with an average cost of around $200 to $500 for a smart thermostat with built-in Wi-Fi.
Additional Considerations and Costs
- Sustainability. Geothermal systems are very eco-friendly and are becoming more popular with homeowners investing in the green building movement.
- Tax breaks. There are federal and local incentives, including tax breaks for installing these systems that offset 30% to 60% of the total costs, making these systems more affordable.
- Permits. You need a permit from your local municipality to install this system. Some system types may have additional regulations. There might be a long wait involved if regulations need to be followed. Expect the cost of the permit to be between $100 and $650.
- Installation method and landscaping. The system is installed using either drilling or trenching equipment, depending on the system type. Horizontal systems require trenching, while vertical systems require drilling. Keep in mind that installation is very disruptive to lawns and landscaping. The heavy equipment must be able to reach the site and may dig up more landscaping than the actual installation.
- Cost factors. Like any system, many factors affect the total system cost. These include location, climate, the energy efficiency of your home, soil type, yard space, install location, and whether this is a new installation or a retrofit. If you need ducts installed or have steam radiators, your costs are higher than if you already have usable ducts in your home. If you want to add multi-zone heating, you will pay more.
- Hybrid systems. Many hybrid systems are available, including geothermal and air pump combinations, for those in more moderate climates.
- Backup systems. You do not need backup heat with a geothermal system. However, some people in moderate climates may choose to use a smaller system with a backup option for the coldest days to save money.
- Lifespan. Geothermal systems last 100 years with little to no maintenance, making them a good investment.
- Steam radiators. While you may use geothermal heat pumps with a radiant heat system, they do not work with steam radiators. If you have existing steam radiators, replace them with hydronic models.
- Who should consider a geothermal system? Geothermal systems are best in climates with extreme temperatures, as you can enjoy lower energy bills for a greater return on investment. If you live somewhere cold or hot, you need your geothermal system more than somewhere with mild weather all year. There are also potential tax incentives and government benefits to switching to geothermal HVAC.
FAQs
- Is geothermal worth the cost?
A geothermal HVAC system is usually worth the cost because it can last for many decades and is incredibly reliable. It uses much less electricity to operate than systems with coal and other fossil fuels, so many homeowners are happy to pay more for the initial installation.
- What are three disadvantages of geothermal energy?
While geothermal energy has plenty of benefits, there are several disadvantages to consider, including environmental concerns due to greenhouse gases, higher costs, and the fact it is location specific.
- How long do geothermal systems last?
So long as they are installed and maintained properly, geothermal heat pumps last at least 20 years for the actual heat pump and 25 to 50 years for the underground components.
- How much does geothermal installation cost?
The average cost to install geothermal heating and cooling in a 2,000 sq.ft. home is around $25,000.
- Does geothermal use a lot of electricity?
It uses some but not as much as other types of HVAC systems.
- Can you put geothermal in an existing home?
Yes, retrofits are available and common. Their total cost depends on whether you have existing ducts or not.
- How much space is needed for geothermal heating?
This depends on the system type. Vertical systems do not use much space, so they may be used in homes with smaller yards.
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