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How Much Does it Cost to Install a Geothermal Heating or Cooling System?

Install a Geothermal Heating or Cooling System Costs
Average reported costs
$6,783
based on 95 cost profiles
Most homeowners
spent between
$3,479 - $12,711
Low cost
$800
High cost
$25,000
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The average national cost to install a geothermal heating or cooling system is $6,783, with most homeowners spending between $3,479 and $12,711. This data is based on actual project costs as reported by HomeAdvisor members.

Geothermal HVAC systems are growing in popularity as homeowners seek out ways to reduce their carbon footprints and lower their monthly energy bills. Although geothermal heating and cooling systems account for only 0.07 percent of residential heating and cooling sources, they are becoming a more common choice as the technology is improved and the systems become more affordable to purchase and install.

What Is Geothermal Heating and Cooling?

Geothermal heating and cooling involves the direct use of energy contained within the earth to transfer heat. In the winter months, heat from the earth's crust is pumped into the home. During the summer months, heat from the home is pumped into the earth's crust. This type of system includes equipment that is installed about 20 feet below the ground, where the earth's crust is about the same temperature all year long. A heat pump is positioned within a few feet of the home and transfers heat between the earth's crust and the home. The heat pump requires electricity for its fans, belts, motor and wiring to operate. However, since the system does not have to generate any of its own heat, it is more efficient than an air-source heat pump or a furnace.

What Are the Benefits of Geothermal Heating and Cooling Systems?

This technology is currently the most energy-efficient option available. These systems are 45 percent more efficient than air-source heat pumps. This means that consumers can see a significant reduction in their cooling costs in the summer and in their heating costs in the winter. While rates for natural gas may wildly fluctuate from season to season and electrical rates increase during peak seasons, heat from the earth?s crust is free. The U.S. federal government is currently offering a tax rebate of up to 30 percent for homeowners installing certain types of geothermal heating and cooling equipment.

The Payback and Lifetime of Installing a Geothermal Heat Pump System

The installation of a geothermal heating and air conditioning system will pay for itself after two to 10 years. The exact payback time depends on several factors including current utility rates, how energy efficient the rest of the home is and how much energy the home typically uses for heating and cooling purposes. Because most geothermal heating and cooling systems have an average lifetime of 18 to 23 years, homeowners choosing to invest in this type of system will enjoy about two decades of energy bill reductions of 40 to 60 percent.

Financing the Installation of a Geothermal System

While it is easy to see the benefits of installing a geothermal heating and cooling system, finding the cash to cover it can be a challenge. To help pay the up-front cost, homeowners can seek out financing such as interest-free loans. These loans may be available from the manufacturer, vendor or installation service company. State and local homeowner programs may also offer such benefits for those seeking to make energy efficiency improvements to their residences.

Other Energy Efficiency Improvements Needed to Realize the Benefits of Geothermal Systems

Although installing a geothermal heating and air conditioning system is a fantastic step in boosting energy efficiency and reducing a homeowner?s carbon footprint, other improvements will need to be made to the home to realize the benefits. Suggested improvements that homeowners can make to realize the maximum level of energy efficiency provided by geothermal heating and cooling include:

  • Air handler: The most important action that homeowners can take to improve air handler efficiency is to change the air filter every three months. The air filter becomes clogged with dust and blocks much of the heat or cool air from passing into each room of the home. The air handler should also be serviced twice per year by a qualified heating and air conditioning specialist who is familiar with maintaining geothermal systems. The air handler needs to be cleaned, lubricated and inspected for worn parts. Inspections should be scheduled for spring before the onset of air conditioning season and in the fall before the functions of the heating system are needed.
  • Heat pump: When the heat pump portion of a geothermal system is installed, it should be given sufficient room for air flow so the fans can operate properly. The pump should be situated on a concrete platform in a shaded area. The heat pump requires biannual inspections by a licensed and experienced heating and cooling system contractor.
  • Ground heat exchanger: Homeowners should select a ground heat exchanger made from copper for the greatest amount of conductivity. Any insulation should be removed from the heat exchanger for optimal performance. The heat exchanger should not be placed near plants, shrubs or grass. Set the heat exchanger to allow the air or water to flow through the pipes as slowly as possible. This allows for the greatest amount of transfer.
  • Pipes: To make the ground heat exchanger as efficient as possible, the pipes should be as long as possible for the greatest amount of surface area available for exchanging heat between the home and the earth. A horizontal orientation for the pipes is a more efficient option for geothermal heating and cooling than a vertical orientation.
  • Duct work: Homeowners should have a qualified heating and cooling specialist inspect their duct work for leaks. Leaky air ducts may waste up to 40 percent of the heated or conditioned air delivered by the geothermal heating and air conditioning system.
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Vaughn Murphie More than 1 year ago
My experience with geothermal pricing would show prices for an installation running at the bare minumum system of $20k to an average of $35k and a high of $45k for an elaborate high end system based upon multiple home show salesmens pricing of a 2000 sq' 3 ton heat pump project
Anne Fritts 9 months ago
Very helpful for someone just beginning to do research on a geo thermal system.
Carey Campbell More than 1 year ago
I installed geothermal heating and cooling in my house and it is terrific. Geothermal heating and cooling cut my monthly energy costs dramatically, by two-thirds. Once I installed solar panels, also, the house became a profit maker, a Green energy money maker.
Roger Shaw More than 1 year ago
I agree with the other comment that the cost data presented is not at all realistic. $20K and above is really the low end for a closed loop system including vertical well drilling and the rest of the work. We'll see what the contractors have to say.
Mike Csolak More than 1 year ago
One must look at the payback with these systems before they make a decision. Geothermal is not rocket science, just expensive. Its just another way of transferring heat. I could throw a couple of hoses in a pond and use the pond as your condenser and that is geothermal. Your just taking the fan away outside and using water to do your condensing. Yes that's efficient but commercial HVAC has been doing water cooled for eons. They just use cooling towers. So my advise would be to weigh your options. there are many fast talking sales people out there. Earths crust? lol whats that all about? There are also many 20 + seer units now to look at 

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