Pros and cons of geothermal heat pumps

Ground-source heat pumps are an innovative heating and cooling technology that uses the heat from the earth to regulate the temperature inside your home. There's a lot to like about that idea, but ground-source heat pumps (also known as geothermal heat pumps, GHPs, or GSHPs) may not be suitable for every property. It’s important to understand the pros and cons of ground-source heat pumps, and how your property’s unique characteristics can help determine whether a geothermal heat pump installation makes sense for you.

Most property owners can benefit from geothermal heat pumps, but it's essential to understand what makes a property more or less suitable for installation before signing a contract. Geographical and environmental factors, availability of rebates and incentives, and your present heating and cooling system can all help determine whether installing GSHPs on your property is worth it. 

Geographic and environmental factors

Many properties have enough physical space to install a geothermal heat pump. Before proposing a system, a geothermal heat pump installer will examine your property to determine whether it's best suited for a horizontal or vertical ground loop. While both system designs provide energy efficiency and savings benefits, installing a vertical loop system typically requires more time and money, as you'll need to bring a drilling rig onto your property and potentially bore through solid rock.

Your property's soil type also impacts the cost and time requirements for a geothermal heat pump installation. For instance, if the soil on your property is soft and easy to dig out, your installation will take less time and money than an installation in denser clay-based soils or rock formations. Additionally, consider the above-ground features of your property that impact available space. You'll need room for your installer to bring in heavy machinery and may need to physically alter your property's landscape during installation (mainly for horizontal loop installations).

If there's body of water is on the property, you may even consider installing a pond/lake geothermal system. While less common than underground loop setups, a pond/lake geothermal loop installation requires far less heavy machinery and time, thus cutting costs. More often than not, pond/lake installations are best suited for large commercial or industrial buildings.

Rebates and incentives

In most cases, a ground source heat pump system will save you money in the long run, but the upfront installation costs can look daunting. Suppose you are concerned about the price tag for geothermal energy. In that case, understanding the benefits of available rebates and incentives can help you determine if it's an investment that makes sense for you.

Some states and utilities offer financial incentives for geothermal installations. Often, these incentives fall under the "Energy Efficiency" category. Additionally, the Residential Renewable Energy Tax Credit (also known as the Investment Tax Credit or ITC) gives homeowners everywhere a tax credit equal to 30 percent of the total installed cost of a ground source heat pump system.

For more information on what rebates and incentives are available near you for geothermal heat pumps, visit the Database of State Incentives for Renewables & Efficiency (DSIRE).

Existing central heating/cooling system

A ground source heat pump will almost always save money on monthly heating and cooling costs compared to a gas or oil furnace. Still, your savings and payback period can vary based on your existing heating and cooling systems. For example, suppose you want to retrofit your property with geothermal and already have adequate ductwork. In that case, you won't have to pay for additional components or labor to install new ductwork or update your existing system, which can impact the total upfront cost of a new system.

Like other heating and cooling devices, there are multiple types of geothermal heat pumps to consider based on your needs.

Closed-loop systems

Closed-loop geothermal heat pumps work by circulating a solution of antifreeze through a closed loop that is buried or submerged. This allows heat exchange between the heat pump refrigerant and the antifreeze system that cools or heats the home. This type of system can be limited by location because it often requires digging underground.

Open-loop systems

In contrast to the more commonly used closed-loop systems, these systems use surface water for heat exchange. After the process is complete, the water returns to the ground via a well. The advantage of this type of system is that it doesn't require additional digging underground. However, it is only practical in areas with a readily available supply of clean, fresh water and that local codes and regulations around using fresh water are followed.

As with any important energy decision, there are a number of pros and cons to consider when examining your geothermal heat pump options. Here are some top ones to keep in mind.

Here are some of the top advantages of installing a ground-source heat pump:

Significant heating and cooling cost savings

According to the Environmental Protection Agency (EPA), property owners who install geothermal heat pumps can save up to 70 percent on heating costs and up to 50 percent on cooling costs, adding up to more than $1,000 in savings yearly. Given this level of energy savings, geothermal systems typically see payback periods between 5 and 7 years, making GSPHs a tremendous long-term financial investment.

Environmentally friendly

Compared to traditional fossil fuel-based home heating and cooling technologies, ground-source heat pumps are a more environmentally friendly option. Unlike boilers or furnaces, geothermal heat pumps don't require the combustion of fossil fuels to produce heat. GSHPs rely on electricity to run. If you don't generate your renewable electricity, you'll likely be running your heat pump with grid electricity, which often comes from a mix of fossil fuel and renewable sources.

Even if you run your heat pump on non-renewable electricity, the high efficiency of ground source heat pumps means that you'll still use less fossil fuel-produced energy than with a furnace or boiler. Ground source heat pumps can be over 400 percent efficient, meaning they can convert one unit of electricity to 4 or more equivalent units of heating or cooling on your property. For reference, traditional fossil fuel furnaces have around 70 to 90 percent efficiencies.

GSHPs work well in almost all climates

While the efficiency of air-source heat pump systems is impacted by outside temperatures (as they use the temperature of the air to collect and disperse heat), ground-source heat pumps are almost entirely unaffected by cold or warm climates. This is because the earth exists at a nearly constant temperature underground everywhere, regardless of the air temperature above ground. Extreme environments or areas with particularly wet soils may impact the type of heat pump you'll want to install, but in general, geothermal heat pumps work well no matter the climate, thanks to the constant heat of the earth.

Here are some disadvantages of installing a ground source heat pump to keep in mind as you're evaluating your heating and cooling options:

High upfront installation costs

Geothermal heat pumps can have significant upfront costs, especially if you need to install or upgrade ductwork on your property. You can expect to pay between $10,000 and $30,000 for a complete GSHP installation before accounting for local or federal tax credits and rebates. Air source heat pumps (ASHPs) are typically lower cost and offer benefits over traditional heating and cooling systems but are not nearly as efficient or long-lasting as GSHP systems.

Potential landscape alterations

Installing a geothermal heat pump involves installing a ground loop system, which can lead to significant above-ground alterations. Particularly with horizontal loop setups, your installer will need to dig trenches over a wide surface area of your property that can change your property's design and physical appearance. Vertical ground loops have a smaller footprint but still involve bringing heavy machinery onto your property.

Open-loop systems may contaminate groundwater

Open-loop geothermal systems are much less common than closed-loop installations, but if you opt for an open-loop system, be aware that groundwater contamination is possible. Because open-loop systems cycle natural groundwater directly, there's a chance that the water that passes through your heat pump and heat exchanger will contaminate the water source you pull from.