Typical Costs

A ground-source heat pump system is one of the most cost efficient methods of heating and cooling a home. A ground source heat pump system, including the underground loops, costs approximately $2,500 per ton of capacity, or roughly $7,500 for a 3-ton unit for a 2000 square foot home. Approximately half of this cost is related to the geothermal loop configuration. It can be expected to last from 20 to 30 years with minimal maintenance. A conventional heating and cooling system costs up to $4,000. At first glance, this price difference of $3,500 may seem impractical and too costly. However, buyers must carefully consider monthly energy costs over the life of the equipment when making a decision.

Rising energy prices can destroy annual budgets and geothermal systems are a good way to minimize future price shocks. Since these systems use from 25% to 50% less energy than conventional systems, users will spend less on their monthly energy bills. In fact, many homeowners could spend from $35 to $70 less per month, meaning that most ground source systems will "pay for themselves" in 2 to 10 years. The additional cost of $3,500 will be recovered from the monthly energy savings. After the "payback" period, the owner will simply pay much-reduced utility bills. Ground-source heat pumps can be retrofitted in existing homes that have traditional forced-air systems. In most cases, the heat pump can be connected to the existing ductwork while the loop system is installed outside in the ground adjacent to the home.

Cost Factors

The costs described above are only meant to be indicative.  The exact cost for your home will depend upon a number of specific factors:

1. Type of Ground Loop:  As a general rule a geothermal system that uses a horizontal loop near the surface is less expensive then a vertical ground loop.  This is because a vertical ground loop usually requires that a vertical shaft be drilled.  Like drilling a well, your contractor will charge you by the foot for drilling the holes for the ground loops
2. Landscaping: If you are putting in a ground loop and already have a lot of landscaping in place much of that landscaping will have to be re-planted or replaced after you have dug up the ground to put in the horizontal ground loop.  This can add significantly to the cost.
3. Capacity:  Costs will vary depending upon the size of the home you need to cool or heat.  Unfortunately the term used to describe heating and cooling capacity is archaic and a bit misleading.  Heat pumps are measured in terms of a "ton" of capacity which used to refer to a machine that could make a ton of ice in one day.  A "one-ton" heat pump can generate 12,000 Btu of cooling per hour at an outdoor air temperature of 95 degrees Fahrenheit or 12,000 Btu of heating at 47 degrees Fahrenheit outside air temperature. 
4. Soil Density: Ground loops work more efficiently in dense soils than in loose soils. 
5. Contractor Rates: There is usually a significant amount of labor involved in the laying of the ground loop whether or not it is a vertical or horizontal loop and labor rates can vary significantly by region. At minimum there is some excavating that will need to be done in any kind of system.  If you decide to go with a vertical loop you will probably need to use a contractor who can do drilling.
6. Duct Work:  If you already have a forced air heating system in your home then there is usually no need to add additional duct work.  If you don't this will be an additional cost.
7. Water Heating: Most heating and cooling contractors can offer the option of using the heat pump to heat your hot water, not just air.  While there is an additional up front cost this can also lead to a significant energy saving in the long run.