Geothermal Vs. Heat Pump: What Are The Major Differences?

Dennis Howard
by Dennis Howard

When you face replacing the major components of your HVAC system, new technologies can offer some interesting options. Heat pumps have been around for years. With the introduction of the residential geothermal system, a lot of confusion has resulted. Many homeowners wonder about the differences between a geothermal and an air-to-air heat pump.

Geothermal heat pumps use the earth around your home to move heat energy. Traditional air-to-air heat pumps use air circulated around the coils of the heat pump to move energy. On average, air-to-air systems and geothermal systems are comparable in price. Geothermal systems tend to be more efficient and can cost 35 to 50 percent less to run.

There are other considerations if you see a heat pump system in your future. Both types of systems have their advantages and their disadvantages. Having a thorough understanding of both air-to-air and geothermal heat pumps will help you make an informed decision about which system best fits your needs.

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Air-to-Air and Geothermal Heat Pumps – The Same but Different

Both air-to-air and geothermal heat pumps work by moving energy available outside your home to the inside to provide heat. These versatile systems also work in reverse, removing heat from your home and transferring it outside when cooling is needed.

The difference is where these HVAC systems find this energy to transfer to your home to provide heat. While the technical details are very similar, the sources of this energy couldn’t be much different.

Heat pumps of both varieties tend to be very efficient and economical. Under normal circumstances, there is no need to burn fuel to produce heat. The only cost is the electricity required to run the refrigerant pump and the fans.

Air-To-Air Heat Transfer – The Traditional Heat Pump

A traditional heat pump circulates outside air over refrigerant coils that capture heat energy. The refrigerant circulates inside to a heat exchanger on the air handlings portion of the HVAC system. A fan circulates your inside air over the coil, and the heat energy is released to heat your home.

In all but the most extreme climates, traditional air-to-air heat pumps can keep your home warm and comfortable all winter long without any auxiliary or emergency heating.

Geothermal Heat Pumps – Going into The Ground

Instead of gathering heat energy from the air around your home, geothermal heat pumps look to the energy stored in the soil. If you measure the temperature of the soil six to ten feet underground, you find it is quite consistent. No matter the season or weather, the soil temperature stays between 45 and 60 degrees at this depth.

A field of vertical or horizontal pipes is installed in the soil around your home. Instead of a refrigerant material to carry the heat energy, geothermal systems usually use water circulating through these pipes to capture and transfer heat energy from the soil.

Like the air-to-air system, the liquid passes through coils inside the house, where the heat energy is transferred to your home. Geothermal systems are highly economical because the only electrical costs are running the pumps that circulate the liquid. There is no refrigerant pump to power.

What is the Cost of Installing These Systems?

In general, it is a bit more expensive to install a geothermal system than a traditional air-to-air heat pump. Most of this cost difference is installing the underground pipe system that is the core of the geothermal heat pump. On average, a geothermal heat pump costs approximately twenty percent more than a traditional air-to-air heat pump.

Type of SystemLow-End CostHigh-End Cost
Geothermal Heat Pump$3,600$16,000
Traditional Heat Pump$3,900$10,000

In many cases, the difference in the cost to install these systems is negligible. When the cost difference is not an issue, you must look at the advantages and disadvantages of each system to make an informed decision.

Traditional Air-To-Air Heat Pumps

Traditional air-to-air heat pumps have been around a long time. The technology has been proven over the years. Advances in technology and engineering have improved these traditional systems’ reliability, economy, and efficiency.

Advantages of an Air-To-Air Heat Pump

There are numerous advantages to installing an air-to-air heat pump. These advantages may affect your decision and should be considered carefully. Consulting with a trained and licensed HVAC technician is a great way to determine which system makes more sense for your situation. Some of the known advantages of an air-to-air heat pump include the following.

Lower Up-Front Costs

In general, it is cheaper to install a traditional air-to-air heat pump than a geothermal system. A traditional air-to-air heat pump doesn’t require an extensive underground network of pipes. There are no costs associated with deep trenching for the pipes. The tubing used can also be expensive, as can the skilled labor to install the pipes properly.

If your home already has suitable ductwork installed, a traditional air-to-air heat pump may be a simple retrofit where your old HVAC system previously existed. If no ductwork is installed, the new ductless systems may be a great choice.

These ductless systems place a small unit in each room of your home. A pair of small tubes to carry the refrigerant to and from the unit is required. AN electrical outlet is also necessary to power the fan.

No Trenching or Digging

Traditional air-to-air heat pumps gather heat energy from the surrounding air. These systems do not need the extensive underground network of pipes associated with a geothermal heat pump.

In some areas where the topsoil is thin over a deep layer of hard bedrock, installing the pipe network for a geothermal heat pump can get very expensive. Likewise, live on a small urban property. You may not have enough space to install a traditional horizontal geothermal field.

Traditional air-to-air heat pumps don’t require any more space than a standard HVAC condensing unit. Most homes can easily find the space to locate the heat pump on even the smallest urban plot. In some cases, the heat pump can be mounted on the roof of your home.

Quicker Installation

If time is a factor, a traditional air-to-air heat pump is probably a better choice. With no requirement to install an extensive field of underground pipes, in many cases, a traditional heat pump HVAC system can be installed in a single day.

Better in Small Spaces

Most HVAC technicians will advise selecting a traditional air-to-air heat pump if the space you are heating, and cooling is relatively small. If you install HVAC in a small apartment or a tiny house, an air-to-air heat pump is more cost-effective.

Traditional Heat Pump Disadvantages

Air-to-air heat pumps aren’t without their downsides. You must also consider the negatives of any major decision before committing your resources to the project. These are some of the most frequently cited disadvantages of a traditional air-to-air heat pump system.

Initial Cost

Traditional air-to-air heat pump equipment is initially more expensive than the usual standard furnaces and air conditioning systems. If you are on a tight budget, it may be better to stick with a conventional gas furnace and condensing unit air conditioner for your home.

This can be especially true if you are replacing an existing conventional HVAC system. Often, some of the equipment is still useable and doesn’t need to be replaced. A furnace may suffer mechanical damage while the condensing unit remains serviceable. Cost is always a factor in any home improvement decision.

Performance Issues to Consider

Air-to-air heat pumps depend on air temperature to provide the heat energy for your home. In some conditions, you may encounter weather and climate conditions that impact the performance of an air-to-air heat pump.

When outside air temperatures fall below thirty degrees Fahrenheit, air-to-air heat pumps begin to operate much less efficiently. In some cases, where the air temperature falls too low, the air-to-air heat pump cannot provide enough heat energy to keep your home at a comfortable temperature.

It is common practice to install an auxiliary or emergency heater with a heat pump in these regions. These emergency heat systems are usually electric radiant heat that can boost the heat pump during extreme cold events. Unfortunately, these systems add initial cost to the installation, and they are very expensive to operate.

Environmental Concerns

Environmental concerns have driven huge changes in the HVAC industry over the past few years. The main concern is the refrigerant material used to capture and transfer heat energy in these systems. The refrigerants used in older systems are known to be carcinogenic and a danger to our atmosphere and environment.

New systems use refrigerants that are much less dangerous. However, there are still concerns about the dangers of releasing these new refrigerant gasses into the atmosphere. For many people, a system that uses any sort of refrigerant gas is a concern. Air-to-air heat pumps rely on some type of refrigerant gas to capture and transfer the heat energy to your home.

Geothermal Heat Pumps

The latest models of geothermal heat pumps are amazing examples of technology and engineering. The advances in designs have produced increasingly efficient systems with long life spans, making them an even more attractive investment. However, before you opt for a geothermal heat pump system, you should understand the advantages and disadvantages of these systems.

Advantages of a Geothermal Heat Pump

Among the most advantageous features of the new models of geothermal heat pumps is their longevity. In some instances, a geothermal heat pump will outlast a traditional air-to-air heat pump by almost two to one. Other advantages also weigh in to make selecting a geothermal heat pump a good option.

Extreme Efficiency

Geothermal heat pumps based on new technologies are extremely efficient. The Department of Energy sources indicate that air-to-air heat pumps can easily produce up to 300 percent heating efficiencies. The same source of information shows that geothermal heat pumps can reach efficiencies up to 500 percent.

Low Operational Costs

Geothermal heat pumps consistently return the lowest operational costs for any system available. Some studies have shown that a properly installed and sized geothermal heat pump can reduce monthly operating costs by as much as fifty percent.

These kinds of operating reductions make it easy to justify the higher initial cost of these systems. In many instances, homeowners recoup the difference in installation cost at the halfway point of the geothermal system’s expected lifespan.

Consistent Indoor Comfort

It is a fact that there is very little variance in the temperature of the soil at the depth the heat exchange tubes are buried. This consistently available source of heat energy allows geothermal heat pumps to produce consistent indoor heating even during the most extreme cold weather events.

Climate Dependency is Almost Eliminated

Geothermal heat pump systems eliminate the problems that air-to-air heat pumps have with low outside air temperatures. A geothermal heat pump usually shows no loss of efficiency no matter how cold the outside air.

This makes geothermal heat pumps very attractive and useful in areas known for extremes in cold winter temperatures that make air-to-air systems unpopular. In fact, it is not necessary to install an auxiliary or emergency heating system with a geothermal heat pump under most conditions.

Environmental Considerations

Most geothermal heat pumps don’t use any refrigerant gasses. This eliminates many concerns about environmental damage from an unexpected release of the refrigerant. Most geothermal heat pump systems use a water-based liquid to transfer heat energy from the soil to your home.

Many people consider geothermal heat pumps a more environmentally sound option for other reasons. Geothermal heat pumps don’t burn any other kinds of fuel to provide heat energy. The technologies used to manufacture geothermal heat pumps typically don’t require exotic or rare resources.

Geothermal Heat Pump Disadvantages

Even the best of technologies and engineering have their negatives. Geothermal heat pumps are no different. You must consider both sides of the question as you debate which type of heat pump is best for your situation.

Higher Initial Costs

The upfront costs of installing a geothermal heat pump system can be much higher than other types of heating systems. The need to install the underground pipe network is the major factor contributing to the higher initial installation costs.

Trenching and installing the pipe network requires specialized machinery and training. The labor costs alone can add tremendously to the overall upfront cost of a geothermal installation.

If you don’t have the necessary space to install a horizontal pipe field, a vertical or stacked system may solve the space problem., but these add additional costs to the installation.

Space Requirements are Much Greater

A geothermal heat pump requires a relatively large open area where the pipe field can be installed. This can make installing a geothermal heat pump on a small urban lot almost impossible.

An average-sized home requires between .25 and .75 acres to install the pipe loop system to serve the geothermal heat pump. Most residential lots do not have this kind of space. A stacked or vertical loop system requires less space but raises the installation costs.

Your Terrain and Geology Can Be a Factor

In some areas of the country, the topsoil layer is only a few inches deep. If you want to install a geothermal heat pump system in this kind of geology, you can expect the costs to soar. Trenching through bedrock is expensive and time-consuming on its own. Adding the piping for the loop field requires additional preparation as well.

While a geothermal heat pump will certainly work in these areas, the additional costs to install the pipe field may offset any operational savings you may gain. In these situations, a traditional air-to-air heat pump may make more economic sense.

Landscape Damage and Disruptions

Installing a geothermal heat pump system will require that your home’s landscaping will be disrupted. Damage to plantings such as bushes and trees is almost guaranteed. An average-sized home will require 1,200 t0 1,800 linear feet of trench up to eighteen inches wide.

This doesn’t consider any damage done by the heavy equipment needed to dig the trenches or move the pipe into place. These possibilities may make a geothermal heat pump installation undesirable for many people.

Lengthy Installations

Installing a geothermal heat pump system typically takes much longer than other heating systems. In fact, the process can take several weeks. The installation of the pipe field itself can take two or more weeks, depending on the terrain and the makeup of your soil.

Permitting and Site Preparation

Many towns and cities have additional regulations and requirements for installing geothermal heat pumps. Special permits may be required to perform the excavations for the pipe field. In addition, most states require that a specialized team visit your worksite and mark any underground utilities that may exist.

In most cases, it is illegal to excavate without having this site inspection performed. In some cases, you may be responsible for moving utilities such as electrical service, water lines, or sewer lines before the pipe field can be installed.

How Do the Costs of a Geothermal Heat Pump and An Air-To-Air Heat Pump Compare?

Overall, you can expect a geothermal heat pump system to cost more than a traditional air-to-air heat pump. In the long run, you should see more savings from the geothermal system than the air-to-air system. Determining how these costs balance is a matter of doing your homework and getting some good advice.

Costs and ExpectationsGeothermal Heat PumpAir-To-Air Heat Pump
Overall Average Installation Costs $3,600 to $15,578#3,900 to $10,000
Expected Life Span25 to 50 years15 years
Installation Time Frames2 to 8 weeks1-week max
Space requirementsUp to .75 acres for the pipe fieldAbout the same space as a standard HVAC system
Heating Efficiency400 to 500 percentApp. 300 percent

Initial vs. Operating Costs

It is easy to see a geothermal system’s comparative costs and requirements over a traditional air-to-air heat pump. These are all factors that must be considered before selecting a new heating system for your home.

You should understand the long-term implications of selecting a geothermal heat pump. Comparing the net savings between the two types of systems may help you balance the initial costs with the long-term operating costs.

YearHeat Pump Initial CostGeothermal Initial CostEnergy Savings (estimated)Net Savings (Estimated)
1$3,900 – $10,000$3,600 – $15,600$300 to $600$450
2$300 to $600$900
3$300 to $600$1,350
4$300 to $600$1,800
5$300 to $600$2,250
6$300 to $600$2,700
7$300 to $600$3,150

If you extrapolate these savings out to the expected life of the geothermal system, you can see that the savings will almost certainly exceed the additional cost of the initial installation. These savings are one of the most attractive benefits of a geothermal heat pump system.

How Much Electricity Does It Take to Operate These Systems?

Surprisingly little is the answer. Geothermal heat pumps are the most electrically efficient. The only electrical requirements for a geothermal heat pump are fans for the air handling system and the pump or pumps that circulate the liquid through the pipe field.

Air-to-air heat pumps use more electricity due to the need to move the refrigerant through a compression cycle. In addition, air-to-air systems a customarily outfitted with auxiliary or emergency heating coils. If the situation requires using these auxiliary systems, the cost for electricity usually increased dramatically during that time.

Overall, estimates are that an air-to-air heat pump will use 3 to 6 kW of electricity while running. A geothermal system will use slightly less because it doesn’t utilize a condensing compressor to capture the heat from the soil.

Do I Need an Auxiliary Heat Source with these Systems?

If you install an air-to-air heat pump, you may need an auxiliary or emergency heat system. Air-to-air systems are very dependent on the outside air temperature. If the outside air temperature falls below thirty degrees Fahrenheit, the air-to-air heat pump’s efficiency begins to degrade.

Geothermal heat pumps usually don’t require a backup or additional heating capacity. The soil temperature at the pipe field’s depth is buried maintains such a consistent temperature that the need for emergency backups is eliminated.

How does the Cost of Geothermal, Air-to-Air, and Regular Central AC Compare?

In general, a standard central AC system is much less expensive than either a geothermal or air-to-air heat pump. In general, the cost comparisons layout is like this.

Type of SystemLow-End CostHigh-End Cost
Geothermal Heat Pump$3,600$15,600
Air-To-Air Heat Pump$3,800$10,000
Standard Central AC$3,000$7,000

You must also remember that a heat pump serves both roles by providing heat and AC. A standard central system only provides heat and may not provide AC services.

Do Geothermal and Air-To-Air Heat Pumps Qualify for Tax Incentives

Yes!. Most geothermal and air-to-air heat pump systems qualify for Department of Energy tax incentives, provided the systems have the proper SEER rating. If you are interested in qualifying for tax incentives while installing a new HVAC system, you should visit the DOE website for more information. You can follow this link to find what you need.

The SEER ratings are ratios between how much energy the heat pump uses per hour and how much heating or cooling it produces per hour. Every heat pump sold in the US has a SEER rating assigned. This SEER rating is usually on a label attached to the heat pump

When shopping for a heat pump of any sort, the target SEER rating is 16. This is about the best rating you can hope for. There are a few heat pumps with a SEER rating above 18 on the market, but the cost of these systems puts them out of reach of most homeowners.

Why Is It Important to Consult with an HVAC Technician when Choosing a Heat Pump?

An HVAC technician does much more than just install the equipment in your home. A good technician will perform a heating and cooling survey of your home to determine exactly what size system you should install. This survey considers several factors.

  • The size of your home
  • Your homes age and overall condition
  • The layout of your home’s interior
  • The adequacy of insulation in the ceiling and walls
  • How your doors and windows may affect your heating and cooling
  • The number of occupants and any special considerations they may require

In addition to these basic considerations, if you are looking at a geothermal or air-to-air heat pump, the technician will also evaluate things such as:

  • The climate where you live.
  • The orientation of your home on your lot
  • The type and depth of soil around your home
  • The space and geology available for the pipe field

Once the technician has evaluated your home, a report will be generated using sophisticated analysis software to give the best recommendations for your new HVAC system. This attention to detail helps ensure that the system you purchase is appropriate and capable of meeting your needs.

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So, Which Is Better, Geothermal or Air-to-Air Heat Pumps

There is no one answer for every installation situation. Overall, where your home and your lot meet the requirements, a geothermal heat pump offers more advantages, longer life, and greater savings than any other type of heating and cooling system. However, some issues may make a traditional air-to-air heat pump a better alternative.

Dennis Howard
Dennis Howard

Dennis is a retired firefighter with an extensive background in construction, home improvement, and remodeling. He worked in the trades part-time while serving as an active firefighter. On his retirement, he started a remodeling and home repair business, which he ran for several years.

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