Geothermal Heat Pump Costs 2021 (Installation, Replacement, Pricing)

Geothermal heat pumps began to grow in popularity in the mid 20th century. And while geothermal renewable energy can dramatically save you money on your home's heating and cooling costs, there has always been one major factor keeping homeowners from installing a geothermal heat pump: the initial sticker price.

A geothermal heat pump can easily cost double of what a conventional heating and cooling system costs. But there are many factors that can influence your final installation price, as well as cost-saving benefits after your new heat pump is up and running. 

If you're looking for the most accurate cost information for geothermal heating and heat pump installation, this heat pump estimation guide will help you to learn:

• The average cost of a geothermal heat pump system
• The average cost of a ground source heat pump
• The different configurations of a geothermal system (and how that affects pricing)
• The environmental and legal factors that contribute to the high cost of geothermal systems, such as your local regulations and your local soil composition and soil conditions
• The significant benefits of going with a geothermal system
• And most importantly, ways you can save money on geothermal heat pump systems

Let's dive in!

What Is A Geothermal Heat Pump? 

Before we begin, let's quickly break down the technical terminology. 

When people talk about geothermal energy and how it can help with heating and cooling your home, they're often referring to two distinct technologies:

• Geothermal heat pumps
• Ground source heat pumps

The two types of heat pumps are similar, but there are a few important things to know, plus key differences to keep in mind:

• Both types of heat pumps draw energy from the ground, in contrast with conventional heat pumps that focus on cooling or heating the air (known as air-source heat pumps).
• Geothermal heating utilizes heat from the core of the earth (similar to how natural hot springs are naturally heated deep below the earth's crust).
• Ground source heat pumps harness the energy stored in the shallow ground that's been heated from the sun's rays. 

What Is The Average Cost Of A Geothermal Heat Pump System?

We'll talk about the average cost of a ground source heat pump further down in this geothermal pricing guide. But first, let's dig into the average costs of geothermal heating.

According to the U.S. Department of Energy, the typical geothermal heat pump system will cost you approximately $2,500 per ton of capacity. 

All heat pumps use a BTU per hour (BTU/h) measurement to indicate their heating abilities (not to be confused with air conditioners, which use EER). A single ton equals 1,200 BTU/h, and you need one ton of capacity for every 500 square feet of your home. 

This means you're looking at:

• A 3-ton heat pump for a 1,500-square-foot home
• A 4-ton heat pump for a 2,000-square-foot home
• A 5-ton heat pump for a 2,500-square-foot home

Thus, you can expect the average geothermal heat pump system to cost approximately $10,000 for your typical 2,000-square-foot house. 

Keep in mind that the geothermal heat pump system is just one element of your total budget! 

You will also need to pay for ground excavation and installation (including labor, taxes, etc.), which can easily drive the total project cost to $30,000 or more for a 2,000-square-foot home.

What Is The Average Cost Of A Ground Source Heat Pump?

In general, you can expect to pay twice as much as a traditional heat pump, reports North Dakota State University, which notes that a ground source heat pump is essentially the same price as a geothermal heat pump.

Expect to pay around $7,000 to $10,000 for a ground source heat pump that can handle a home that's 1,500 to 2,000 square feet. 

It's the total cost of installation where you may see a bit of a savings. That's because ground source heat pumps don't require as much excavation and digging. Since the system is based on a more shallow installation, you may find it a little bit cheaper than the total cost of a traditional geothermal heat pump system.

Depending on factors like your soil composition, total ground source heat pump costs will be in the mid-$20,000s. 

What Are The Geothermal System Configuration Costs?

All geothermal and ground source heat pumps use a ground loop, which are buried pipes filled with fluid (often an antifreeze solution or refrigerant). The fluid heats up as it flows underground, and the system then carries that heat into your home.

The U.S. Department of Energy explains that there are four main configuration types for your future geothermal heat pump: 

• Open-loop systems 
• Horizontal closed-loop systems 
• Vertical closed-loop systems
• Pond/lake closed-loop systems

Installation of these loop systems can add a significant amount to your total geothermal system installation costs. 

Closed vs. Open Loop

Open loop systems are not very common, and may be illegal in many regions. With an open loop system, your geothermal or ground source heat pump pulls fresh water in from a well. The water circulates through the system, then it gets released into another well.  

Local regulations may ban or severely restrict your use of open loop systems because of the potential environmental risks to springs, lakes and rivers in your community. 

Closed-loop systems are the most common configuration. As its name suggests, the heat pump's fluids remain circulating endlessly within a closed piping system.

Horizontal Looping

The U.S. Department of Energy points out that using a horizontal loop is the "most cost-effective for residential installations." That's because your geothermal system's piping is buried horizontally in shallow ground (approximately four feet deep).

Average costs per square foot, according to a report led by the California Geothermal Energy Collaborative, fluctuate widely depending on where in the U.S. you're located:

• Midwest: $12.12 per foot of horizontal piping (an average of $18,533 per installation)
• Northeast: $2.33 per foot of horizontal piping (an average of $3,073 per installation)
• South: $9.24 per foot of horizontal piping (an average of $12,102 per installation)
• West: $11.38 per foot of horizontal piping (an average of $11,910 per installation)

Vertical Looping

Vertical piping is installed when you either don't have enough land to do a horizontal installation, or if you want to minimize how much surface area your geothermal installation requires. 

Because you're digging vertically into the ground, you avoid disturbing as much of the landscape. However, a vertical loop configuration is also more expensive to do.

Average costs per square foot are also dependent on where in the country you're in:

• Midwest: $12.99 per foot of horizontal piping (an average of $19,857 per installation)
• Northeast: $16.03 per foot of horizontal piping (an average of $21,162 per installation)
• South: $14.94 per foot of horizontal piping (an average of $19,575 per installation)
• West: $14.64 per foot of horizontal piping (an average of $15,333 per installation)

Pond Ground Looping

Pond/lake loop installations are the cheapest, notes the U.S. Department of Energy, with one caveat: You obviously need a pond or lake on your property. The geothermal system's piping runs underground to coils deep in the lake or pond.

Average costs per square foot ring in at around $2.30 for an average installation cost of the low to high $3,000s.

What Factors Contribute To The Cost Of Installing A Geothermal Heat Pump?

As you could see in the previous section of this guide, geothermal heating costs involve far more than the sticker price of the pump itself. During the excavation and installation process, other factors can impact the final cost of your overall installation. 

Climate

According to the University of California-Davis, climate plays a big role in how your geothermal system is installed, and thus the total cost of installation:

• Colder climates require changes to the fluids used in the underground piping, such as the addition of extra chemicals to prevent freezing. This can make installation more expensive.
• Very cold areas may require pipes to be buried deeper than normal, which drives up excavation and labor costs (as well as requiring more piping material)
• Areas with poor sun exposure may require extra piping when installing a ground source heat pump system.

Soil Composition

UC Davis points out that soil composition can contribute to geothermal heat pump installation costs in several ways:

• Very rocky or compacted soil requires more labor and work to excavate.
• Some types of rocks and soil conduct heat differently than others (also known as thermal diffusivity and conductivity). This may affect your underground pipe configuration or the amount of pipe you need to bury to generate the heat transfer you require. 

Local Regulations

State and municipal rules dictate the types of permits, licensing and testing you need to do in order to start your geothermal project. This can add a few hundred dollars to your total costs. 

Open Loop Regulations

If you choose to go with an open loop configuration, you're looking at added regulations, permits, and fees. Depending on your region, you may even need to do various assessments, such as environmental impact studies, to ensure your geothermal project doesn't negatively impact the land and water around you. 

Square Footage

It's quite simple: the larger the space that you need to heat (i.e. the bigger your home), the bigger your geothermal system needs to be. 

Heat Pump Maintenance 

A report by the University of Tennessee found that geothermal heat pump maintenance and repair tends to be cheaper than maintaining and repairing a traditional heating and air conditioning system. 

However, the maintenance costs are not exactly negligible. Regular maintenance inspections by an HVAC contractor can run you $150 to $300 a visit (depending on your system and your region), and repairing air compressors and similar parts can easily extend into the thousands. 

What Are The Benefits Of Geothermal Heating and Cooling Systems?

Despite the high cost of installing a geothermal heating system, the benefits are numerous. 

Check out this video below for a breakdown on heating costs: 

Here is a breakdown of the benefits: 

• It's far more energy-efficient and uses less energy: The U.S. Department of Energy estimates that a geothermal heat pump can be up to 600% more effective than conventional systems, representing significant savings on your utility bills.
• It requires low to no maintenance: Another report from the U.S Department of Energy notes that geothermal systems are naturally protected from damage (since they're buried deep underground) and have far fewer moving parts than traditional heating and cooling systems/HVAC systems. Not only does this save on maintenance costs, but that also results in extended longevity (many geothermal systems last 25 years or longer).
• It's better for your community and the greater world: Geothermal systems create numerous local jobs, especially because most systems are designed and built in the U.S. Using geothermal energy also reduces your impact on your local electricity grid and reduces your contributions to global carbon emissions and pollution.

How To Save Money On Geothermal Heat Pump Systems?

Despite its initially high installation costs, a geothermal heat pump system can pay for itself in just a couple of years thanks to its significant energy savings.

If you want to speed up how quickly you recoup your out-of-pocket upfront cost and expenses, there are additional ways to save money on your geothermal heat pump system.

1. Buy the Right Size

A pump that's too small for your home is inefficient, and a pump that's too big is a waste of money. Work with your HVAC contractor to ensure your system is configured for your home's size.

For even more savings on energy costs, look for heat pumps that carry an Energy Star certification.

2. Apply For Incentives 

State and federal government agencies offer numerous grants, rebates and tax credit. When applicable, these federal and state incentives can slash your initial cost by a significant amount.  

3. Think Beyond the Heat Pump

The less heat you need, the smaller the heat pump you need. While you can't shrink your current home, you can look at ways to improve your home's heating and energy efficiency (e.g., upgrading the installation, blocking drafts at your entryways, using the right ductwork, etc.) in order to avoid buying a bigger heating system.

4. Get Quotes

Geothermal heat pump installation is a complex task that's far beyond the range of even a skilled do-it-yourself homeowner. Always go with a licensed professional. 

When seeking professional installation services, solicit multiple quotes to get a better idea of the range of prices in your area. Many installers have relationships with different subcontractors for labor like excavation, and their own contracts and deals can lead to cost savings passed down to you.