Geothermal Power For Residential Homes


With soaring fuel costs, geothermal heating and cooling for residential homes is growing in popularity. This page briefly describes the various types of geothermal heat pump systems available to the average residential buyer, as well as describing the advantages and disadvantages of installing a goethermal system in your current residence. Lastly, this page includes information on the comparisons of financing a geothermal system versus conventional systems for a standard residential home.


Geothermal power is becoming an attractive option for new or existing home owners. Geothermal power can be used in residential houses to replace comparable HVAC systems and/or boiler systems via geothermal heat pumps. Geothermal heat pumps (GHPs) use the constant temperature of the earth as the exchange medium instead of the outside air temperature to help heat or cool a home1. These systems work on the principle that below the frost line, the temperatures stay relatively constant at 50oF year-round. A heat pump circulates conductive fluid between the house and the earth as a means of heat exchange.

Types of Geothermal Heat Pump Systems

Closed Loop Systems

Closed loop systems use conductive means of transfering the heat from the earth to the heat pump system. Closed loop systems are utilized when home-owners do not have access to wells or ponds on their property. There is no direct contact between the fluid (refrigerant or water) and the earth.



The horizontal closed loop system is most common in homes with yard space. The horizontal method utilizes The Slinky™ method of looping pipe allowing more pipe in a shorter trench, which cuts down on installation costs and makes horizontal installation possible in areas it would not be with conventional horizontal applications2.



The vertical closed loop system is used in areas where real estate is limited. Although more labor intensive, digging holes up to 175 feet deep per ton of cooling, the vertical method provides better overall heat transfer than the horizontal Slinky™ method. Since this method forces the pipes to travel very deep in to the ground, potentially exposing warmer areas than might be encountered with the relatively shallow slinky type systems.



Due to obvious restrictions, the Pond/Lake closed loop system is not as common. In larger bodies of water a true horizontal system is prefered. Although, if limited space is available, a Slinky™ method is utilized.

Open-Loop Systems


Unlike closed-loop systems, open loop systems use water (either wells or ponds/lakes) as the medium of heat transfer in the heat pump system. These systems are typically more efficient than closed-loop systems because the working fluid is constantly replaced with water at ground temperature. One concern in an open-loop system is the possibility of thermal contamination (where the source temperature is effected by the geothermal system). As expected, filters are usually necessary due to foreign objects clogging the system.

Direct Exchange (DX) Systems

Direct exchange systems are closed loop systems that circulate refrigerant through copper tubing in the earth. This eliminates the need for water pumps and large plastic tubing in comparable open-loop systems. The DX system configuration allows for a high heat transfer rate between the refrigerant and copper tubing with less buried tubing. The benefits of a DX system are the reduced installation cost compared to other geothermal heat pump systems. Also, with the smaller configuration, the DX system is more economical for various types of geographical areas.

Geothermal Hot Water Heaters



A desuperheater is a "waste heat recovery" device that recovers the "superheat" from a compressor's discharge gas in geothermal heat pumps for use in providing domestic hot water3. Typically, desuperheaters can provide useful high-efficiency water heating with 5 to 15% of the energy that would otherwise be given up by the system's condenser4. However, it provides hot water only when the system to which it's attached is operating; backup water heating is needed at other times5. Therefore, the desuperheater would not provide hot water during seasons, such as spring and fall, when the heat pump would typically not run.

Dedicated Hot Water Heaters

Unlike desuperheaters, dedicated hot water systems are a water-to-water or air-to-water heat pump dedicated to providing hot water to the residence at all times. Air-to-water types provide cooling and dehumidification, which is useful in summer. But even in winter, using air heated by a high efficiency source, the overall water heating system efficiency is higher than with alternatives. Water-to-water heat pump water heaters are particularly adaptable to ground source heat pump and water loop heat pump installations, where the ground-loop or circulating water-loop is the heat source for the water-heating heat pump6.

Multi-Function Full-Condensing Water Heating Systems

Multi-function full-condensing water heating systems incorporate factory-assembled refrigerant-to-potable-water condensers, in addition to the normal heat exchangers. These systems can operate in several modes: space cooling only, space cooling plus water heating, space heating only, and water heating only. In a residential installation the heat pump, pumping module and the connections to the water heater includes a built-in hot water circulator. The hot water generator is active throughout the year, providing virtually free hot water when the unit is in the cooling mode, or hot water at the COP of the heat pump during heating mode operation7.

Comparing Geothermal vs Conventional Systems


  • Geothermal heat pumps are incredibly efficient with CoP's of 3 to 4 (i.e. 1 unit of electricity input to 4 heating units out)8.
  • Operating costs are significantly cheaper than conventional systems, between 30-60% savings per month
  • Maintenance and utility costs are almost non-existant, with the expected heat pump life of 20-30 years and loop field life of 200 years9!
  • Renewable and emission free energy source


  • A high initial investment (Approximately $12,000-$16,000 for 2000 sq. ft. vs. $6000 gas furnace)
  • Limited installation preferences based on geographic location
  • Return on investment is typically 3-7 years

Considerations When Financing A Geothermal Heat Pump System

One way to justify installing a geothermal system in your home is to consider the total financial investment compared to conventional systems. Unfortuntately, converting your current system is not as advantageous as installing a new geothermal system at a residence that does not currently have an air handling system. If your home currently has an air-handling system, converting to geothermal systems have limited benefits:
  • Many electric utility companies provide financial incentives to any residential homes that convert to geothermal power
  • The enduring satisfaction that you are reducing CO2 emissions to this wonderful green earth :-)

Although, with the current technology, installing a new goethermal system in your home is much more advantages than installing a conventional air handling system.

Listed below are annual cost savings of geothermal systems to comparable propane and gas powered heating and cooling systems. As you can see, the size of your home is directly correlated to cost savings of your geothermal system.


Utilizing the data above, a 2000 sq. ft. home will incur a cost savings of approximately $69.92/month compared to a gas fired air handling unit. Let us assume a $50,000 home with a down payment of $5,000 has an initial cost of $15,000 for a geothermal unit versus $6,000 for a conventional system. A typical mortgage at 5% interest would result in the following monthly payments:

Mortgage Length Monthly Payment Gas Monthly Payment Geo Difference Savings
20-year mortgage $336.58 $395.97 $59.39 $10.53
25-year mortgage $298.14 $350.75 $52.61 $17.31
30-year mortgage $273.78 $322.09 48.31 $21.61

As you can see, with a $9000 difference in initial investment, the savings from the geothermal heat pump not only meets the cost of a conventional system, it exceeds it!


This page briefly describes the available geothermal energy systems for residential homes. Although there are advantages and disadvantages to installing geothermal systems, it is clear that the advantages outweigh the disadvantages when choosing between conventional and goethermal air and water handling systems. Overall, geothermal power for residential homes is an environmentally and financially wise investment when planning the heating and cooling needs of your home.

Unless otherwise stated, the content of this page is licensed under Creative Commons Attribution-ShareAlike 3.0 License