Geothermal is an efficient type of electric heat pump for heating and cooling that has enormous advantages. Geothermal actually moves heat in or out of a home just like a regular heat pump to both heat and cool the interior space. However the huge advantage of geothermal is the ground constant temperature like that of an underground cave.
The earth and a cave have a constant temperature of about 56-58 degrees F and this thermal mass of the earth or ground is the source of the energy. This is where the term “ground source heat pump” comes from in describing geothermal. Geothermal only has to heat or cool the difference between this 56 degree earth temperature and the interior house temperature of 70 degrees, or about 14 degrees of difference. This is a relatively small change to pay for in energy costs.
This 14 degrees is dramatically different than a traditional heat pump, gas furnace or traditional furnace which is heating from the exterior 30 degrees in the winter up to 70 degrees inside the house of about 40 degrees of heat change. Imagine a regular furnace trying to heat up this large difference, and then compare that to 14 degrees and you can see the potential energy savings.
Geothermal is a much larger up front purchase cost than traditional methods. There exists a tax credit of 30% of what you spend through 2016 for installing geothermal systems. This expands the already enormous financial benefit of geothermal systems. A geothermal system can cost from $15,000 to $40,000 so the tax credit is potentially large. Please consider this as an investment in energy savings when replacing your HVAC system.