Geothermal energy is heat extracted from the earth’s surface. This clean, renewable energy source relies on the consistency of underground temperatures rather than the fickle climate above ground. If you have ever taken a tour of a cave or a mine, then you have experienced this phenomenon.

Used for both heating and cooling, geothermal energy can be found almost anywhere. As more cities and countries across the globe work to reduce their dependence on fossil fuels, more areas are tapping this clean power source. Conventional geothermal systems work by using pumps to heat or cool fluid and bring it above ground to regulate the temperature in a home.

Although it sounds like a relatively new type of technology, this heat energy has been used successfully since the 1940s. Today, the U.S. Department of Energy estimates that geothermal pumps are installed in 50,000 American homes each year.

Understanding the Different Designs

All geothermal pumps operate under the same principle, but the design details differ. There are several basic types of ground-loop systems, all of which pump liquid through tubing between an underground space and the surface. The options fall into two main categories: closed-loop and open-loop.

Closed-Loop Systems

Among the closed-loop setups, the horizontal loop system is generally the most cost-effective for residential applications. The installation involves placing tubing in a trench between four and six feet underground. This normally requires a large surface area, but the size requirements for the trench are lower if the installer uses a coiled, “Slinky” layout that allows more tubing to fit in a smaller area.

Another closed-loop option, the vertical loop system, is more expensive to install because it requires drilling deeper holes. This system relies on uncoiled pipes that are looped deep underground. In order to transfer enough heat through these thinner single pipes, the holes for a vertical layout must be between 100 and 400 feet underground. A vertical loop is ideal for property owners who lack the space for a shallow but wide horizontal loop trench.

The cheapest setup for a closed-loop system is one that utilizes a pond or lake with deep water. This type—a water-based closed loop—is easier to install because it uses the consistent temperature of water to provide heat. If the body of water is deep enough, there is no need for an expensive drilling or digging project. However, this water-based system is only viable option with a pond or lake nearby.

Open-Loop Systems

The final option is an open-loop system. Less common than a closed-loop system, this design captures heat from an underground well, which means a property owner must have an ample source of water.

Unlike the closed-loop setups, the liquid is not continuously circulated through the system. Instead, the water is pumped through the pipes, the heat is extracted, and the water is directed to a return well. Regulations in many areas, however, do not permit open-loop systems.

The Pros of Geothermal Energy

Because of the digging or drilling and technical nature of geothermal pump projects, installation can seem like a complicated undertaking. Homeowners will need an experienced installer to handle the project, thereby increasing the cost.

The big question remains: is geothermal is worth it?

According to the DOE, a geothermal system can reduce energy consumption by around 25 to 50 percent compared to a traditional HVAC setup. What does this mean in dollars and cents? By one estimate, heating a standard 1,500 square-foot home with a geothermal heating system will cost about $30 to $50 per month in most climates.

Long-Lasting and Safe

The average lifespan of a geothermal pump is 20 years, with the underground infrastructure lasting anywhere from 25 to 50 years for the underground infrastructure, reports the DOE. Repair and maintenance costs are low because the pipes or tubing are underground, protected from the elements.

Unlike many forced air furnaces, there is no gas or combustion of any kind involved in geothermal heating. This is a major plus for people who are concerned about safety. It is also advantageous for those who want to use an eco-friendly source for their home’s heating and cooling. Pumps do need electricity to run, but there are no onsite emissions, as with a natural-gas-powered furnace or boiler.

What are the Drawbacks of a Geothermal Heating System?

The installation expense is the major drawback for this type of climate-control system. Digging or drilling may also disrupt the surrounding landscape—this is especially true with horizontal loop systems that require a larger excavated area to lay tubing underground. If you have invested money in your landscaping or worked to grow a green lawn, understand that you may have to reseed or resod your lawn after the installer buries the tubing.

If you live in an extreme climate where it either gets very hot or bitter cold, you may need a backup system to handle the heating and cooling needs in case of a power outage. In colder areas, the lack of heat could also cause water pipes to freeze and burst.

Finally, bear in mind that geothermal pumps require energy to operate. Therefore, the eco-friendliness of these systems depend, in part, on the home’s power source. If the electricity is derived from renewable energy (hydroelectric, solar, wind), the system will have a low environmental impact. However, if the electricity is produced by coal or some other non-renewable, high-carbon source, the home will still produce some carbon emissions.

Alternatives to Geothermal Heating

In the right situation, a geothermal heat pump is valuable in terms of both environmental friendliness and energy savings. If not, other heating options include furnaces, boilers, and air-sourced heat pumps. These appliances are offered in an array of Energy Star-certified models, designed to operate with maximum efficiency. A new Energy Star furnace, for example, will lower your carbon emissions and save you money on your natural gas or electricity bills compared to an older, less efficient model.

Financing a Geothermal System

While naysayers might claim that geothermal heating is too expensive to install, special financing options can make the project accessible for homeowners who do not have enough money to pay for the upgrade upfront.

PACE financing programs, such as YgreneWorks, cover the initial cost of a geothermal heating system. PACE, which stands for property assessed clean energy, is a special tax in which a property owner leverages their home equity to pay for energy-efficient upgrades. The amount financed is then repaid over time as a line item on the homeowner’s property tax bill. Because of the long average lifespan of geothermal units, the benefits often continue long after the project has been paid off.

Geothermal heating might not seem like the simplest option. But in certain circumstances, it can be the best option for efficient, eco-friendly heating and cooling.


PACE can help you finance an array of renewable and energy-efficient upgrades. Contact YgreneWorks to find out of this financing option is available in your area: (855) 901-3999; info@ygreneworks.com.