Before you decide to invest in a geothermal system, you’ll want to know the pros and cons. A geothermal heating and cooling system could be the biggest investment you make in your home, outside of the home purchase itself.

The advantages and disadvantages of geothermal systems boil down to this: if your home has the right site characteristics, and you have the stomach or the financial resources to handle a big up-front price tag, geothermal can be a great investment. If your site doesn’t lend itself easily to a geothermal installation, or you don’t want to fork out major money in exchange for savings in the long term, geothermal heating and cooling might not be your cup of tea.

First off, let’s be clear what we’re talking about in this discussion: we’re referring to the advantages and disadvantages of geothermal energy used to heat or cool your house. We are not discussing geothermal electricity generation, the other big use of geothermal energy. Geothermal electrical generation just isn’t doable on the scale of a household.

(If you came here from a search engine query, you may want to read my main article on Energy saving geothermal systems to get an idea of the various configurations and options available in home geothermal systems.)

Geothermal heating and cooling can be a great option in three situations: You are starting to build a new home, your current heating solution is unusually expensive or needs to be replaced anyhow, or you have more money than you know what to do with and you just want to find the most energy efficient or environmentally friendly heating and cooling solution regardless of up-front cost.

After the sections on Advantages and Disadvantages of geothermal systems below, I’ll cover each of the new home, needed replacement of an existing system, and efficient-at-all-costs scenarios.

The advantages of geothermal boil down to low operating cost, long life, flexibility, and sustainability. The disadvantages of geothermal are primarily up-front cost and temporary disturbance to your landscape if you’re installing your geothermal system in an established neighborhood. But even though the advantages far outnumber the disadvantages, the up-front cost is a disadvantage that keeps many people from taking the plunge.

One more thing before we look at the advantages and disadvantages of geothermal in detail. There are over one million geothermal heating and cooling systems installed in the United States alone. If you are sitting on the fence about whether or not to install a geothermal system, it helps to know that that many people have already decided that the advantages outweigh the disadvantages.

Advantages of geothermal systems

The advantages of geothermal systems boil down to efficiency advantages, reliability and safety advantages, flexibility and convenience, renewable energy advantages, and financial advantages. Let’s look at each in more detail.

Efficiency advantages of geothermal systems

  • Geothermal heating systems can extract up to six times the heat energy they use in electrical energy. In other words, compared to electrical heating, they are at least three and up to six times more efficient.
  • Geothermal heating systems use far less electricity than traditional electric heating systems – as little as one sixth as much.
  • Savings in heating mode can be up to 3/4 of the cost of electrical heating, and savings in cooling mode can be up to 1/4 to 1/2 of the costs of running a traditional air conditioner. When you factor in virtually free hot water, the overall efficiency can be even higher.
  • A 1500 square foot house equipped with a geothermal heating and cooling system costs $30 to $50 per month to heat or cool in most US climates.

Reliability and safety advantages of geothermal systems

  • Geothermal heating and cooling systems have few moving parts, so they are highly reliable. Failures are rare and minimal maintenance is required, other than regular forced air system maintenance (fan, filters) and some maintenance on the water loop in open loop systems due to mineral and sediment in the water.
  • Unlike central air conditioning systems, geothermal cooling systems have no parts outside. There is no wear and tear on an outdoor condenser. You do not need to worry about leaves, plants, or dirt getting onto the condenser fan. There is no risk of vandalism.
  • Geothermal heating systems can last far longer than most heating systems. The polyethylene pipe in most loop fields typically has a 25 or 50 year warranty and estimates are that it can last up to 200 years.
  • A geothermal heating and hot water system eliminates the risk of carbon monoxide poisoning associated with natural gas heating and hot water. The risk of fires is also much lower than in a house equipped with a gas furnace and/or gas water heater.

Flexibility and convenience advantages of geothermal systems

  • Geothermal heat pumps can be set up to supply hot water as well as space heating and cooling. In some cases (for example, with a de-super-heater that extracts heat out of the system when you are cooling your home), the hot water comes at no additional energy cost. Otherwise geothermal hot water can cost just pennies a day.
  • Geothermal heating systems can easily be extended to heat a pool, since they can heat water as well as heat and cool your home.
  • Geothermal heating and cooling systems create no noise outside the home, and almost no noise inside either.
  • The hardware for heating and cooling within your house requires less space than a conventional furnace or air conditioner (or combination furnace and air conditioner), so your equipment room can be greatly scaled down in size.

Renewable energy advantages of geothermal systems

  • Geothermal is a renewable source of energy for heating, cooling, and air conditioning. There is no pollution caused by home geothermal systems; even in an open loop water system that is properly designed, the small amount of heat extracted from your home during the hot weather cooling system is not enough to cause any adverse effects on flora or fauna.
  • If you buy your electricity from a green electricity supplier, you can heat and cool your home without creating any greenhouse gas emissions.
  • Geothermal heating and cooling systems do not contribute to global warming. Even with a conversion from a forced air natural gas heating system, to a geothermal heating system where the electricity is generated from coal, net CO2 emissions go down. See more on the CO2 emissions of geothermal heating and cooling below.

Financial advantages of geothermal

  • Although geothermal systems can cost several times what a conventional system costs, payback can be within 2-10 years according to some estimates. Obviously, the payback period depends on installation costs, which vary greatly by area, as well as on energy costs, which vary over time. Remember when calculating your payback (how long it takes for the energy savings to pay for the more expensive system) that energy costs keep going up faster than we expect.
  • Installations in the US may be eligible for up to a $300 Federal Energy Tax Credit as well as a tax credit of up to $2,000 through the Emergency Economic Stabilization Act of October 2008.
  • Installations in Canada may be eligible for up to $7,000 in Canada ecoENERGY grants, and matching provincial grants, provided you have a home energy audit performed before the installation is started and another after the installation is completed (typical cost $150-300). The Federal grant is up to $3,500; Ontario matches this with another $3,500, and British Columbia tops it up to a total of $4,750.


The disadvantages of geothermal systems are up-front costs, disturbances to your land during installation, environmental risks of direct exchange systems, legal conformance risks relating to open loop systems, and maintenance issues relating to open loop systems.

Installation cost disadvantages of geothermal systems

These systems can be very expensive to install. Price estimates for total systems for a typical US home range from $5,000 to $20,000 (there are wide variations in estimates from different sources). There may be other energy efficiency upgrades you can do in your home that cost a similar amount but have as great or greater an impact on your energy bill over the next twenty years. If you live in a leaky, poorly insulated house, you may be better off spending that kind of money on better insulation and draft sealing, energy efficient windows and doors, and other upgrades that reduce the amount of energy required to heat and cool your home. In fact, it’s a good idea to do this first even if you do install a geothermal system, since you can install a smaller geothermal system if you reduce the heating and cooling load through efficiency upgrades.

Installation disturbance disadvantages of geothermal systems

Because horizontal systems are the most cost effective, and because of the extensive trenching required for horizontal systems, most geothermal installations require some level of disturbance of the land around your home. Even open loop systems and closed loop pond or lake systems require some trenching to keep the water loop pipes buried below the frost line.

The installation type that causes the most disruption to your landscape is a horizontal installation, either in standard loops or in a Slinky configuration. This is because of the long, wide, and deep (4-6 feet) trench that needs to be dug to accommodate the heat bed. If you have a vacant lot and are building a new home, this type of installation is more cost effective and you may not mind the disturbance to soil and the possible damage to tree roots of surrounding trees.

If you are concerned about damaging the landscape or flora of your property, a vertical installation is more appropriate. Vertical installations require minimal disturbance to your landscaping other than a clear access path for the bore drilling equipment to the heat bed, and space to temporarily store for the bore holes and the material removed from the bore holes. However, vertical installations are typically much more expensive than horizontal installations because of the cost of drilling several hundred feet underground.

Environmental disadvantages of geothermal systems using direct exchange (DX)

Direct exchange geothermal systems are the cheapest to install and some installers claim they are the most efficient. In a direct exchange system, a single loop circulates a refrigerant such as that used in an air conditioner or refrigerator between the heat pump in your house and the geothermal sink or source under ground. There are two problems with direct exchange systems.

First, they use copper pipes to circulate the refrigerant, and copper pipes buried under ground can easily corrode over time, leading to leaks that are hard to locate and almost impossible to fix.

Second, they use up to 100 times more ozone-depleting CFCs or HCFCs than a double loop system, because the liquid circulating in the geothermal heat source or sink is a refrigerant. (In a double loop system, virtually all of the liquid circulates in the geothermal loop, not the refrigerant loop, and this liquid is a benign blend of water and antifreeze.) So if you install a direct exchange system you run the risk of a short-lived heat exchange system, and of releasing vast amounts of ozone-depleting chemicals into the atmosphere.

Building a new home

The perfect time to install a geothermal heating and cooling system is when you’re building a new home. There are two major types of geothermal installations: horizontal and vertical.

In horizontal installations, the geothermal pipes are placed underground on a horizontal plane through your yard, in a network of trenches dug in your yard. The pipes are buried deep enough – usually six feet or more – that there’s little risk of damaging the pipes if you are digging after the house is finished, unless you’re out there with your back hoe!

Vertical installations are more suitable where you have limited yard space, or where you don’t want to dig a lot of trenches, for example if you want to protect trees or other natural features of the landscape. The problem with vertical installations is that they are considerably more expensive to install, because of the deep drilling involved.

You need to replace your existing heating or cooling system

You may need to replace your existing heating or cooling system because it uses too much energy, or because it’s so old the maintenance costs are escalating. If you need to replace both your heating and cooling systems, geothermal is a great option because you can replace two existing, inefficient or failure-prone systems with a single new one.

When you do a payback analysis on geothermal, it always helps the geothermal side’s case if you would otherwise have to buy a new furnace and/or air conditioner in the new future. It is much harder to justify a geothermal heating and cooling system when your current system is working just fine. If the system works well but is energy-inefficient, then your payback analysis should include a full life cycle cost for both a more traditional replacement system (e.g. forced air natural gas system and traditional central air conditioner) and for a geothermal heating and cooling system. Remember that geothermal systems have lower maintenance costs and lower energy costs once installed.

You want the most energy efficient home heating and cooling system, at any cost

If you have relatively speaking unlimited financial resources and want the most energy efficient home heating and cooling system at any cost, geothermal heating and cooling is the way to go. If you make your home extremely energy efficient in terms of passive lighting, heating and cooling, using the most energy efficient lights and appliances, and installing solar electricity for homes or wind generation capacity, you may be able to install a geothermal heating and cooling system and make your home entirely self-sufficient in energy.

CO2 emissions of geothermal heating and cooling systems

Does a geothermal heating and cooling system contribute to global warming?

It’s true that you don’t use any natural gas to run your geothermal system. But you do use electricity. Where is that electricity coming from? If it’s coming from a coal-fired or natural-gas fired power plant, the generation of that electricity still contributes to global warming – but less so than heating with natural gas or cooling with central or room air conditioners. Let’s consider this scenario:

  • You currently heat with gas, using an 80% efficient gas furnace.
  • You switch to a geothermal heat pump, which produces 4 units of heat per 1 unit of electricity
  • The gas you no longer use is now used to generate the electricity to run your heat pump. Gas electrical turbines operate at about a 40% efficiency, meaning 60% of the energy in the burning gas is lost as heat.

You were getting 80% of the gas energy as heat with your gas furnace. You are now getting 40% of the gas energy as electricity from the natural gas generator. That 40% is then extracting 4 units of heat from the ground for each unit of electricity. So your net is 40% X 4, or 1.6 units of heat energy per unit of natural gas. Since originally you were producing 0.8 units of heat energy, you have effectively cut your CO2 emissions in half even assuming the same fossil fuel is used to generate your electricity as was used for your furnace. Of course, if you switch to a Green electricity supplier at the same time that you switch to geothermal, you’ll not only eliminate all CO2 emissions from your heating and air conditioning system, but you’ll probably still wind up saving on your monthly bills even with the premium green electricity suppliers charge for their fossil-fuel-free electricity.

2 replies
  1. Skylar Williams
    Skylar Williams says:

    I loved your points on when to install the new system. it does seem it’s more difficult to install it when a current system is already in place. I’m in the process of building a home. Soon I’ll have to make the decision of what system I want. I’m really leaning towards the geothermal.


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