How Much Does a Geothermal System Cost in 2024?

Equipping a mid-sized home with a geothermal heat pump can average cost $14,000 to $35,700. The price gap is driven by manifold factors, including the system setup, ductwork adjustments, heat pump type, contractor rates, and location peculiarities. If a 1-ton geothermal heat pump is enough to meet your home’s needs, your outlay can be as low as $5,000. However, large houses require units with 4 to 5 times higher capacity that come with different price points. Thus, a 5-ton geothermal heat pump costs up to $50,000. Nonetheless, most American homeowners stick to the middle ground, spending about $15,450 for a new unit installed. 

The geothermal heat pump installation cost

Geothermal System Cost Breakdown

From ground conditions to unit type, many factors affect how much you need to fork out on geothermal system installation. You should be aware of the major ones before switching from your good old HVAC to the geothermal system. Today, we’ll highlight all the top-priority nuances of geothermal heat pumps you should make allowance for when budgeting. 

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Cost of a Geothermal Heat Pump by Home Size

Your home size determines how powerful the befitting geothermal heat pump should be and whether you’ll spend $3,800 or $50,000 to get it installed. The unit must offer capacity within the 3- to 4-ton range to ensure the system can effectively manage an average house’s heating and cooling needs. In this case, the required investment can present a considerable financial commitment, landing between $7,700 and $33,000. Your outlay can vary based on the brand, the specific technology used, and the depth and length of the pipe installation, aka, its complexity. 

The cost of a geothermal system by home size

Geothermal Heat Pumps Cost by Capacity 

The effectiveness of the geothermal heat pump correlates with its capacity and determines the price, which falls between $2,450 and $8,100 per ton. Top-of-the-line models with advanced technology and better energy efficiency ratings may command a steeper price. Please note that the specific environmental considerations of your location can also influence the geothermal installation costs. Not only does the heat pump's capacity affect your initial investment, but it also impacts the long-term energy savings and performance of your heating system.

The price of installing a geothermal heating pump by capacity

Geothermal Heat Pump Price by Unit Type

If you have ample space in the basement, you can go for a packaged geothermal unit, running from $2,550 to $8,200. All essential components and refrigerant circuits are housed within one pre-assembled box, so its installation is straightforward and won’t take a toll on your budget. However, a split system can be a better choice for homes featuring attic ductwork or low basement ceilings. It features various elements interconnected by refrigerant lines and demands intricate on-site installation, resulting in extra expenses from $2,900 to $5,000. Plus, you will have to charge the system with refrigerants regularly to keep it up and running.

The geothermal heating system cost by unit type

Geothermal Heating Cost by System Type

Your expenses on brand-new geothermal heat pumps can vary based on the category they fall into. There are four of them, of which three are closed-loop systems, while the fourth is an open-loop one. When selecting the appropriate system for your home, you should evaluate soil conditions, available land space, and local weather conditions. You can put a geothermal installation cost calculator to good use, as labor rates can make or break your decision. Let’s view each system type in more detail. 

Horizontal Loop

Horizontal loop geothermal systems, typically priced between $15,000 and $33,800, are among the most affordable options for heating and cooling, provided the home has sufficient land. Named for their pipe configurations, which lie horizontally just beneath the surface, these systems are cost-effective because they do not require deep excavation. Installation involves digging trenches around two to ten feet deep, accommodating straight or "slinky" overlapping pipes. The latter design is best suited for soil with good thermal conductivity. While ideal for large, flat plots typically found in rural settings and new constructions, they are impractical for smaller or sloped properties because of their extensive land requirements. 

Vertical Loop

Vertical loop ground-source heat pump costs between $19,000 and $37,900 to install. They consist of vertically oriented heat exchanger pipes that delve deep underground, making installation in limited space a no-brainer. Despite the higher installation costs due to the necessity of a drill rig and grout machine, this system minimizes the disturbance to your landscape compared to horizontal setups. Contractors can complete the digging part of the process in one to two days. Due to these characteristics, vertical loops are commonly preferred for retrofit projects and can even be installed beneath driveways, offering flexible placement options.

Pond Loop        

A pond loop geothermal system can set you back $10,000 to $32,400 installed. It functions by utilizing heat from nearby water bodies rather than the ground. These systems are more energy-efficient than other ground loop types and generally have the lowest installation costs among counterparts. The set-up uses submerged loops in a water source, like a pond, close to the home. Unlike other systems, pond loops do not require extensive drilling or trenching, but the water body must have a surface area between 15,000 and 44,000 square feet to get things done. 

Open-Loop

Open-loop geothermal systems, which range in cost from $10,000 to $28,500, often represent a more affordable installation choice than horizontal systems. However, you need to double-check whether your property is eligible. Unlike closed-loop systems, which recirculate a liquid solution, open-loop systems use fresh water from nearby wells, ponds, or rivers. This water circulates through the system to transfer heat before being discharged back into the source or a separate recharge well. Hence, accessibility to the clean water supply is a must. Please note that discharging water in certain areas may incur annual fees ranging from $2,500 to $10,000, depending on the system’s size and local codes.

The cost to install a geothermal heat pump by system type

Geothermal System Cost by Energy Efficient Ratio

Geothermal heat pumps are measured by their Energy Efficient Ratio (EER), with typical efficiency ranging from 15 EER to over 45 EER for cooling. A higher EER signifies a more efficient and superior performing system, leading to long-term savings on energy bills despite a higher initial investment.

When considering different brands, it’s beneficial to look into additional features that might cater to your specific needs. Modern geothermal heat pumps can come equipped with advanced functionalities like Wi-Fi connectivity, allowing for remote system monitoring and control. Some models also offer integrated solutions for domestic hot water production, adding convenience by utilizing the system’s capacity to generate hot water alongside home cooling and heating.

Geothermal Installation Cost

Labor costs will swell the largest share of the geothermal installation budget, as the unit cost only accounts for less than 40% of the overall outlay. Experts need to evaluate the size and layout of the land, the soil composition, and accessibility for drilling or trenching, to name their rates. Moreover, the installation cost can be affected by additional factors, including: 

• Permits. Before installing a geothermal heat pump, you must obtain the necessary permits, which can cost between $100 and $2,000. The nature of the outdoor project is the main cost-shaping factor. Usually, the company you partner with for the installation undertakes the paperwork and navigates the permitting process, alleviating this administrative burden from you.
• Ductwork installation. Installing ductwork for geothermal heating and cooling costs $1,430 to $5,700. The investment depends on whether you need to adapt existing ductwork or install a system from scratch. Moreover, homes under construction offer fewer challenges to install ductwork as walls and floors are still open, meaning soon-to-be homeowners will spend the least. 
• Well drilling. The process of drilling wells for geothermal systems involves expenses ranging from $5.20 to $41 per foot, which cater to vertical installations. These boreholes typically measure between 4 and 8 inches in diameter and extend from 100 feet to 500 feet in depth while being spaced around 10 to 20 feet apart. For an average home, about 3 to 5 boreholes are necessary, with each borehole accommodating approximately 300 feet to 500 feet of piping for every ton of the system’s heating capacity.  
• Landscape repairs. Restoring your landscaping after drilling or excavation required for installing a closed-loop geothermal system can cost $4 to $12 per square foot. This pricing typically covers repairing damaged areas, relocating in-ground irrigation systems like sprinklers, and re-seeding lawns to bring the greenery back to its original state.

The geothermal cost by services

What Is a Geothermal System and How Does It Work?

A geothermal system is an environmentally friendly technology that leverages the stable underground temperature to heat and cool buildings. Unlike conventional HVAC systems that burn fuel or use fluctuating outdoor air temperatures, geothermal systems utilize the earth’s constant temperature, typically around 50 to 60 degrees Fahrenheit, a few feet below the surface, to exchange heat.

The system circulates a water-based solution through a loop of buried pipes. During winter, the fluid absorbs the earth’s heat and carries it indoors. Here, a heat pump extracts the warmth from the fluid, concentrates it, and distributes it throughout the building. In the summer, the system expels indoor heat into the earth, cooling the interior.

What Are the Pros and Cons of a Geothermal Heat Pump?

Are you considering investing in a geothermal heat pump? Let’s weigh all the main pros and cons of such a system to see whether it’s worth the effort. 

Geothermal Heat Pump Operating Costs

The geothermal heating cost per month can be between $100 and $220. The U.S. Department of Energy highlights that homeowners can cut heating and cooling expenses by up to 65% once they upgrade their houses with such a system. This efficiency stems from the system’s ability to utilize the consistent temperatures underground, markedly reducing energy consumption.

To ensure optimal performance, you must schedule an annual inspection of the system, which can cost between $85 and $240. Proper care and regular maintenance not only improve system performance but also save you the trouble of covering the water furnace costs and prevent big-ticket repairs in the future.