Geothermal Heating and Cooling Cost




There are many good reasons to install a geothermal heating and cooling system. One of the most important is the low impact this type of system has on our environment. For many people, this is reason enough. However, cost can be a deciding factor whether to install geothermal or not. There are two ways to look at the cost of a geothermal heating and cooling system.

Geothermal Systems Cost Less to Use

Without question, geothermal heating and cooling systems are cheaper to use than fuel burning systems.


When you install geothermal, you eliminate your dependence on heating fuel companies. And who likes to see the  oil companies turn large yearly profits? Wouldn’t it be nice to watch the prices of heating fuel go up and down and not even care? This is what a geothermal heating and cooling system can offer. Because this type of heating and cooling uses the mild temperatures in the ground around us, no fossil fuels are needed. The only utility bill is for the electricity needed to run the ground source heat pump.

How much money can you expect to save? Naturally, this will depend on usage habits and the current price of fuel. You will read savings estimates of anywhere from 30% to 70%, which is quite a broad range. The reports I have for homes in the northeast indicate an average electric bill of about $160 – $200 per month for geothermal homes. This is for homes in the 2000 square foot range. You can count on these numbers going higher during months with high heating and cooling demand. But the costs will also drop during the more moderate weather months.

Higher Cost of Geothermal Installation

The installation cost of a geothermal heating and cooling system will be more than that of a conventional heating and cooling system. There a few reasons for this. First of all, because the source of heat is mild temperatures from the ground, significant work must be performed outside the house to make this possible. If the chosen system includes drilling a well, that can add $4000 to $6,000 right at the beginning of the project. (Although, it is not uncommon to drill one well to take care of both water for the home and geothermal heating and cooling). Horizontal loops require significant trenching outside the home, which can also be costly. Secondly, the most essential piece of equipment, the ground source heat pump, can cost in the $10,000 – $15,000 range. Finally, the costs of piping  the heat through the home are somewhat more expensive than those of a conventional heating system.

How much more will you pay? Estimates of at least double the cost of a more conventional system are commonly used. Most geothermal systems I have seen average in the $25,000 – $30,000 range for new construction. This price does not include the costs of trenching for a horizontal loop system or well drilling for a vertical loop. Prices will vary depending on the size of the home and the complexity of the system. While it may not be three times more expensive, the geothermal system may well exceed twice the cost. Keep in mind that prices will also vary from one installer to another. Like anything else, the cheapest price is not always the best one.

These costs estimates are meant only as general guidelines. When considering a geothermal heating and cooling system for your home, you should always contact a local installer for an exact quote and ask for an estimate for typical usage costs for your area.