Unlike oil or gas furnaces that burn fuel to produce heat, geothermal heat pumps work by transferring heat from water or soil beneath the earth’s surface. The first geothermal or ground-source heat pump was developed in the late 1940s. Geothermal heating is now used in all 50 American states.
Geothermal heat pumps don’t lose efficiency in cold weather because heat is removed from underground water or soil that remains at a moderate temperature. Ground-source heat pumps boast energy efficiency performance ratings of up to 400%. When you install a new geothermal system, you may also qualify for a government tax credit that covers 30% of the overall cost of your heating equipment. According to studies conducted by the Environmental Protection Agency, geothermal HVAC systems are the most environmentally friendly heating and cooling systems available.
An air-to-air heat pump removes heat from outside air; a geothermal heat pump removes heat from underground water or the underground soil. Depending on the location, wells are used as the source of the water. In others, a grid of buried pipes removes the heat from the surrounding soil.
Air-to-air heat pumps lose efficiency as the surrounding air becomes colder. As the outside air gets close to freezing, the air-to-air heat pumps must be supplemented by a backup furnace or electric coils. Air-to-air heat pumps are very effective in temperate climates, but much less so in very cold climates. Geothermal heat pumps, on the other hand, do not lose efficiency as the weather gets below freezing because the heat is removed from underground water or soil that stays between 50 and 60 degrees. In our climate, air-to-air heat pumps have an estimated efficiency of about 200% versus an efficiency that can reach as high as 400% for geothermal units.
Geothermal heat pumps tend to be much more costly than air-to-air heat pumps. In cold climates, this initial cost is more than made up by their higher operating efficiency. In addition, there are government tax credits for geothermal equipment that amount to 30% of the cost.