What is Geothermal ?

Geothermal heat pumps (GHPs) use the constant temperature of the earth as the exchange medium instead of the outside air temperature for both heating and cooling purposes.

Though many parts of the country experience seasonal temperature extremes, a few feet below the earth's surface the ground remains at a relatively constant temperature.

Switching the direction of heat flow, the same system can be used to circulate the cooled water through the house for cooling in the summer months. The heat is exhausted to the relatively cooler ground (or groundwater) rather than delivering it to the hot outside air as an A/C does. As a result, the heat is pumped across a larger temperature difference, leading to
 higher efficiency and lower energy use.


Chart Source: CleanTechnica


Advantages of Geothermal Energy 



  • Geothermal energy is extremely reliable, requires minimal maintenance and is durable. 

Geothermal Energy is not always the same as Ground Source Heat Pumps

"Geothermal energy is considered a renewable resource. Ground source heat pumps and direct use geothermal technologies serve heating and cooling applications, while deep and enhanced geothermal technologies generally take advantage of a much deeper, higher temperature geothermal resource to generate electricity." -- Environmental Protection Agency

Geothermal Heat Pumps vs HVAC

Geothermal uses the ground as the source of the heat and as a medium to exchange heat, while an HVAC system or heat pump uses the air as the heat exchange source. However, a ground source heat pump is more energy-efficient and lasts longer than an air source heat pump or HVAC system.

There are some cases where it makes sense to get an HVAC/heat pump:

  • You need something installed quickly

  • The space you need to heat or cool is relatively small

  • Your property is not suited for geothermal


On an eight-foot-wide site in London, architect Luke Tozer cleverly squeezed in a four-story home equipped with rain-water-harvesting and geothermal systems.

Photo: Charlie Crane

Cost Comparison Heat pump/HVAC or Geothermal System

A ground source heat pump (geothermal) uses 50% less electricity than central air and lasts twice as long as an air source heat pump before it needs replacing. The following table compares some basics of Geothermal and HVAC/air heat pumps .

Geothermal system
Heat pump/HVAC
System Life before replacement 25 years to 50 years
15 years
Electricity usage 25% to 50% less than a HVAC
25 to 50% more than a geothermal system
Upfront cost $3,592 – $15,578
$3,875 – $10,000

Do I Need a Backup System with Geothermal?

You don’t need a backup system for a geothermal system. Before installing a geothermal system, complex calculations are done to determine the right size heat pump to give your home enough heating and cooling.

It can be a good idea to have a backup, such as a gas heater or electric heater, if there is ever an issue with your geothermal system.

A fan or portable air conditioning unit can be a good idea for the summer, but geothermal heat pump systems are made to the strict consumer and building standards and are very reliable. 


Source: WaterFurnace

Did you know the US is Leading in Geothermal?


Workers from Dandelion Energy work on a trench for geothermal loops at the home of Robert A. Culp and Vivian Linares
in Garrison, NY.Credit...Andrea Mohin/The New York Times

  • With more than 3,300 megawatts in eight states, the United States is a global leader in installed geothermal capacity. Eighty percent of this capacity is located in California, where more than 40 geothermal plants provide nearly 7 percent of the state’s electricity.

  • The lifespan of an underground energy collector can be more than 100 years. The upgrade costs will only be for the next indoor heat pump (25 year lifespan) 


A Farmhouse in Iceland’s Haukadalur Geothermal Valley. New York Times. 

What is The Cost of Installing a Geothermal System? 

For a 2,000-sq.-ft home or small-scale geothermal system, costs can range anywhere from $10,000 to $30,000. Some factors that change the cost of installation include: “soil conditions, plot size, system configuration, loop system, site accessibility, and the amount of digging and drilling required”.

The additional cost to upgrade to a geothermal system will have returns on the 5% to 8% annually at today energy prices for propane and heating oil. So if the system cost $10K more to install, it would be like getting 5% to 8% return annually on a $10K investment. 

Both heat pumps and geothermal systems cost on average the same amount, however, a geothermal system is 25% to 50% cheaper to run than an air heat pump.

There are many federal, state, and local incentives that can help to offset the initial up-front costs of going geothermal. Realty Sage offers a list of resources for finding these incentives.

Image via Dwell

How Much Space Does Geothermal Installation Require?


The actual geothermal heat pump unit is around the same size as a heat pump. But, a geothermal system takes up more space because of the hoses that are buried underground.


However, because they’re underground, you won’t notice a difference in the available space in and around your home whether you use a heat pump or a geothermal heating and cooling system.

Installation Time

It can take several weeks (6-8 weeks) to install a new geothermal system. 

Step in the installation                                               Time it takes

Permitting and Design                                                           2 to 3 weeks

Drilling                                                                                       3 to 5 days

Trenching between boring and hose                                   1 to 2 days

Piping connections                                                                 2 to 5 days

Duct modification or installation                                          1 to 2 weeks

Electrical connections                                                            2 to 3 days

Thermostat Set-up, zoning control, and start up              1 day

Where is Geothermal Energy Available? 

Places where the Earth’s heat is closer to the surface, or regions rich in hot springs and other natural hot water reservoirs, are more suited for finding and using geothermal.


The Pacific Rim, often called the Ring of Fire for its many volcanoes, has many hot spots, including some in Alaska, California, and Oregon. Nevada has hundreds of hot spots, covering much of the northern part of the state.

You’ll need to consult with a geothermal energy consultant or a company that installs geothermal to assess the specific area to determine if it is suitable. 


Blauhaus residence in North Carolina powered by geothermal energy. Source


What Are Some Installation Options?

Considering switching to geothermal for your home? Undecided explains in more-depth how Geothermal energy works. As you consider options, it is important to note there are 6 major types of geothermal heat pumps:

  • Closed loop

  • Horizontal

  • Vertical

  • Pond/lake

  • Open-loop

  • Hybrid

Scroll below to explore several companies offering geothermal energy installation. 

If your home is not suitable for geothermal, it's worth considering other options for energy. 

Realty Sage is partnered with Energy Sage to help you get estimates from local providers. Read more about alternative energy options such as wind and solar energy, as well as passive solar homes

1. Dandelion Energy


Cost: Financing payment starts at $0 down and $150/month‍. Dandelion Geothermal starts at just over $18,000 – $25,000 (after federal, state, and utility incentives) for a 3 - 5 ton heat pump system which includes all installation costs.


Pricing/ Savings Breakdown: https://dandelionenergy.com/geothermal-pricing-guide

Who Should Use Them: If you are a U.S. homeowner looking for a cheaper and cleaner solution to heat and cool your home, geothermal could be a fit for you. A five-ton Dandelion Geothermal System reduces a home’s carbon footprint by 60-85% when switching from natural gas, propane, or fuel oil, respectively. Check out Dandelion if your state, like New York, Massachusetts, Connecticut, Maryland, New Jersey, and Pennsylvania, offers special incentives for geothermal.‍

What They Do: Geothermal systems use the difference in temperature to transfer heat between your home and the earth. Whether it’s a winter cold snap or a summer scorcher, the ground five feet below the surface maintains a constant temperature year round. The Dandelion Energy home geothermal system replaces your air conditioning and heating equipment with a powerful heat pump and safe, underground pipes. In the winter, the ground loops move heat stored in the ground into your home. In the summer, the ground loops returns heat from your home to the ground.

2. Aztech

Financing Options: "The amount of funding available to each project will depend on its size and the heat pumps capacity. Smaller projects (e.g., residential and small commercial buildings) get $1,500 to $2,000 per 10,000 BTU of the heat pump for most utility areas we cover. So a typical 4 ton residential system will qualify for about $6,000"

Website: http://aztechgeo.com/

Who Should Use Them: Residents in Upstate NY.  For Upstate NY homes heated with Propane, Heating Oil, or Electric Baseboard:

  • A geothermal system will save 40-75% on annual heating and cooling costs.

  • The savings alone often cover any monthly loan payment or increases in mortgage.

  • Payback periods are typically 5 to 8 years for retrofit and 3 to 5 years for new homes.

  • Electricity used by the heat pump can be offset by renewable Photovoltaic (PV) Solar.

What They Do: Aztech Geothermal designs, installs, and services environmentally friendly geothermal heat pump systems in upstate NY. Aztech Geothermal is the only firm in Upstate New York to have the full complement of experienced geologists, professional engineers and their own highly trained field personnel all under one roof. Aztech Tech is an environmental services and remediation firm with crews that have drilled thousands of wells and excavated hundreds of sites since 1997 


3. Carrier

Cost: A geothermal heat pump, including installation, can range from $12,000 to $45,000. Your Carrier expert can help determine the exact cost based on your unique situation.

What They Do: Carrier® geothermal systems can save you up to 70% on annual heating and cooling costs.1 And, a single heat pump can reduce greenhouse gas emissions by 11 metric tons over its average 20-year lifespan.\

Website: https://www.carrier.com/residential/en/us/geothermal/

4. Water Furnace

Cost: Cost breakdown

What They Do: Headquartered in Fort Wayne, Indiana, WaterFurnace has been synonymous with geothermal and water source heat pump technology since they were founded in 1983. Our systems have been installed across all 50 states and in countries around the world. Over the years they've worked to innovate new technologies, integrate key trends and grow our core business to represent clean and sustainable solutions.

Website: https://www.waterfurnace.com/