What a geothermal heat pump does

A geothermal heat pump pulls heat from the ground beneath your house and moves it indoors during winter. In summer, it reverses and pushes indoor heat back into the ground to cool your home. The ground stays at a steady temperature year-round—roughly 50 to 60 degrees Fahrenheit depending on your location—so the pump doesn't have to work as hard as an air-source heat pump that pulls from outdoor air that freezes in winter or bakes in summer.

The system uses a loop of refrigerant (a fluid that changes between liquid and gas) buried in pipes underground. That loop connects to an indoor unit that distributes heated or cooled air through your ductwork. The ground loop is the key difference from other heat pumps: instead of exchanging heat with the air outside, it exchanges heat with the earth.

Key Takeaways

  • Geothermal heat pumps work by circulating refrigerant through underground pipes that stay at a constant temperature year-round, making them more efficient than air-source heat pumps.
  • The system requires either a horizontal loop (trenches dug across your yard) or a vertical loop (deep boreholes), and installation is more invasive and costly than air-source systems.
  • Geothermal systems can reduce heating and cooling costs by 30 to 70 percent compared to conventional furnaces and air conditioners, though the upfront cost is significantly higher.
  • The refrigerant cycle—evaporation, compression, condensation, and expansion—is the same as in other heat pumps, but the ground loop allows it to work efficiently even in extreme cold.
  • Most homeowners need a professional installer experienced in geothermal work, and your property must have enough space or depth for the ground loop.

How the refrigerant cycle works underground

Inside the indoor unit sits a compressor that pressurizes refrigerant gas. As the gas is compressed, it heats up—the same way a bicycle pump gets warm when you use it. That hot gas flows through a heat exchanger where it releases its warmth into your home's air. The refrigerant cools and turns into a liquid.

The liquid then travels down into the ground loop buried outside. As it moves through those underground pipes, it absorbs heat from the surrounding soil and rock. Even in winter, the ground holds enough warmth to heat the refrigerant. The warmed refrigerant returns to the compressor, and the cycle repeats.

In summer, the system reverses. The compressor pulls heat out of your indoor air, and the refrigerant carries that heat down into the ground loop where it dissipates into the cooler earth. Your home cools, and the ground absorbs the excess heat.

Ground loop types: horizontal versus vertical

A horizontal loop requires trenches dug 4 to 6 feet deep across your yard. Plastic pipes are laid in the trenches, then backfilled. This method works well if you have at least a quarter-acre of open land and don't mind temporary disruption to your lawn. Horizontal loops are less expensive to install than vertical ones because digging trenches costs less than drilling boreholes.

A vertical loop uses boreholes drilled 150 to 300 feet deep into the ground. Pipes are inserted into each borehole, and the holes are sealed. Vertical loops take up far less yard space—sometimes just a few spots near your house—making them the only option for small properties or rocky soil where trenching is difficult. Drilling is more expensive than trenching, but the smaller footprint often justifies the cost on tight lots.

Some installations use a pond or lake loop if your property has a body of water at least 8 feet deep. Coils are sunk to the bottom, and the water itself becomes the heat source. This is the cheapest option if you have suitable water, but most homeowners don't.

Why geothermal systems are more efficient than air-source heat pumps

An air-source heat pump must work harder in winter because outdoor air is cold, and in summer because outdoor air is hot. A geothermal system always exchanges heat with ground that stays between 50 and 60 degrees. That stable temperature means the refrigerant doesn't have to be compressed as much to reach useful heating temperatures, and it doesn't have to be expanded as much to absorb heat in cooling mode.

Less compression and expansion means the compressor uses less electricity. Over a heating season, a geothermal system typically uses 25 to 50 percent less energy than an air-source heat pump in the same climate. In very cold regions, the advantage is even larger because air-source pumps lose efficiency below freezing and often need a backup electric heater to keep up.

The tradeoff is upfront cost. Geothermal installation runs $15,000 to $30,000 or more depending on loop type and soil conditions, while an air-source heat pump costs $5,000 to $15,000. The lower operating costs recover that investment over 10 to 15 years in most climates, but you need to stay in the home long enough to see the savings.

What happens when the ground loop freezes or gets too hot

The ground loop itself does not freeze solid in winter because the refrigerant circulating through it is colder than the surrounding soil but warmer than freezing. The soil around the pipes stays above 32 degrees because the system is constantly pulling heat from it. However, if the system runs continuously without enough heat to pull, the ground temperature can drop over time—a problem called ground thermal exhaustion. This is rare in residential systems but more common in commercial installations that run year-round.

In summer, the ground can warm up if the system is pushing too much heat into it without enough time to dissipate. Again, this is uncommon in homes but can happen in climates with extreme cooling loads. Most residential systems are sized to avoid both problems, and the ground's thermal mass is large enough that seasonal swings don't cause trouble.

Installation and site requirements

Geothermal installation is not a DIY project. You need a contractor licensed in HVAC and experienced specifically in geothermal work. The installer must assess your soil type, groundwater conditions, and available space to design the right loop. Soil composition matters: clay and rock conduct heat better than sand, so loop length varies by location.

For a horizontal loop, you need clear yard space without major tree roots or underground utilities. The installer will call 811 (or your local utility locating service) to mark gas, electric, and water lines before digging. For a vertical loop, you need access for drilling equipment, which is usually a truck that fits in a driveway.

Your home's ductwork must be compatible, or you'll need to install new ducts. Some older homes with baseboard heating or radiators can use a geothermal system, but it requires additional work to add air distribution. Your contractor will evaluate this during the initial assessment.

Maintenance and long-term reliability

Geothermal systems have fewer moving parts than furnaces or air conditioners. The ground loop is sealed and buried, so it doesn't corrode or leak as easily as outdoor air-source equipment. The indoor unit needs the same maintenance as any heat pump: filter changes every 1 to 3 months and a professional inspection once a year.

The refrigerant should last the life of the system (20 to 25 years), but if a leak develops, a technician must locate and repair it, then recharge the system. This is expensive—$1,500 to $3,000—but rare if the system was installed correctly. The compressor itself typically lasts 15 to 20 years, and replacement costs $2,000 to $5,000 plus labor.

The ground loop itself is designed to last 50 years or more. Plastic pipes resist corrosion, and being buried protects them from weather and physical damage. If a loop fails (a crack or joint separation), repair is difficult because the pipes are underground. This is why choosing an experienced installer matters: poor workmanship during installation is the main cause of loop failure.

Frequently Asked Questions

Can I install a geothermal heat pump in a cold climate where the ground freezes?

Yes. The ground loop is buried below the frost line (the depth where soil stays above freezing year-round), so it doesn't freeze. In very cold climates, geothermal systems are actually more efficient than air-source heat pumps because they avoid the extreme temperature swings that reduce air-source efficiency in winter.

What if I don't have space for a horizontal loop?

A vertical loop requires only a few boreholes, each about 3 feet wide, so it works on small properties. The tradeoff is higher drilling costs. If your lot is too small or rocky for either option, a pond loop (if you have water) or an air-source heat pump may be your only choices.

How long does geothermal installation take?

A horizontal loop installation typically takes 3 to 5 days once digging begins, though site preparation and permitting can add weeks. A vertical loop takes 2 to 3 days of drilling plus 1 to 2 days for indoor unit installation. Your contractor will give you a timeline after the site assessment.

Do I need permits for a geothermal system?

Yes. Most municipalities require a building permit for the indoor unit and a separate permit for the ground loop, especially if drilling is involved. Your contractor usually handles permit applications, but confirm this before signing a contract. Permitting can add 2 to 4 weeks to the project timeline.

Will a geothermal system work with my existing ductwork?

Usually yes, if your home already has forced-air heating and cooling. If you have radiators, baseboard heat, or no ductwork at all, the system can still work, but you'll need to install new ducts or use a ductless indoor unit, which adds cost and complexity. Your installer will assess compatibility during the initial visit.