Homeowners in the U.S. average $1,900 a year on utility bills, with over 20 percent going to heating and cooling costs. So, it only makes sense to have the most energy efficient HVAC system for your home — a geothermal heat pump.


Heat pump by brick home
Geothermal heat pumps don’t burn fossil fuels, so they’re eco-friendly. (jpproductions, Getty Images)

What are Geothermal Heat Pumps?

Both the Deptartment of Energy and the EPA endorse geothermal heat pumps. Also known as ground source heat pumps, they’re among the most energy efficient and eco-friendly ways to heat and cool your home.

Geothermal systems are 50-70 percent more efficient for heating than traditional furnaces. They’re also 20-40 percent more efficient for cooling than standard air conditioners.

Unlike systems that burn fossil fuels – such as gas, fuel oil, coal, or wood – geothermal heat pumps don’t produce carbon dioxide greenhouse gas emissions.

About one million geothermal heating/cooling systems have been installed in the U.S. since 1980.


Illustrated diagram of a geothermal heat pump, showing underground pipes that supply ground-source heat
A series of underground pipes absorb heat from the ground in the winter to warm your home. (DepositPhotos)

How Does a Geothermal Heat Pump Work?

While a standard heat pump uses the temperature of outside air for heating and cooling, a geothermal heat pump draws on the more constant temperatures found underground.

A series of underground pipes absorb heat from the ground in the winter to warm your home.

In the summer, the process is reversed, with heat removed from your home and transferred back into the ground.

The network of buried polyethylene pipes used to exchange heat operate as either a closed or open loop.

In a closed loop system, the heat pump circulates a mixture of antifreeze and water through the pipes and back again.

An open loop, on the other hand, draws water from a well or pond, then returns it to the ground after use.

Pipes for a closed loop geothermal system can either be buried horizontally 4- 7 feet deep or vertically 150-400 feet underground.

Once the heat has been extracted from the fluid, it’s transferred to an air handler and ductwork to your home similar to other forced air HVAC systems.

A geothermal heat pump can also efficiently heat your home’s water. Waste heat from the compressor can be used to produce hot water at very little expense.


House with stacks of money as background
Through the High-Efficiency Electric Home Rebate Program, you could be eligible for $8,000 to cover installation costs. (Andy Dean Photography)

Is a Geothermal Heat Pump Worth It?

Geothermal heat pumps last 25 years on average while underground pipe loops can operate for over 50 years.

Over the life of the system, geothermal heat pumps cost 25 percent to 50 percent less than a traditional system. Homeowners can recoup the added installation expense in as little as five to seven years.

Find out how much you can save on your home’s heating and cooling with the Bosch Geothermal Savings Calculator.

Geothermal systems are also eligible for a federal energy efficiency tax credit of 30 percent of the cost, up to $2,000, of installing the system. This tax credit is available through the end of 2032.

Both principal residences and second homes are eligible for the federal tax credit, and you may also qualify for additional state and local tax incentives or rebates.

Beyond the tax incentive, you also could be eligible for up to $1,750 for a heat pump water heater and $8,000 for a heat pump for space heating and cooling through the High-Efficiency Electric Home Rebate Program. 

More information is available at Bosch Thermotechnology.


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