Ground source heat pump cost: How much will you pay in 2025?

The most efficient heating and cooling technology on the market can cost you more than a car—but it may also save you tens of thousands over its half-century-long lifespan.

Geothermal heat pumps—also known as ground source heat pumps (GSHPs)—typically cost $15,000 to $40,000 or more to install in 2025. That’s several times more than a traditional furnace and air conditioner combo, and well above the $16,000 average for air source heat pumps. Still, the long-term value is hard to beat.

Geothermal heat pumps are in a league of their own when it comes to efficiency, drawing on the earth’s stable underground temperature to deliver consistent, low-cost comfort year-round that can cut energy consumption by up to 50%. These HVAC systems eliminate noisy outdoor units, require minimal maintenance, and last far longer than conventional systems: The underground loop can operate for 50 years or more, while the indoor components typically last 20 to 25 years, offering generations of reliable, efficient heating and cooling.

On average, a geothermal heat pump installation costs $15,000 to $40,000 or more. Some systems can run much higher—Massachusetts-based YouTuber Matt Ferrell, for example, spent $78,000 on his installation in 2023. 

Ultimately, the price of a geothermal heat pump system can vary by tens of thousands of dollars, depending on your location, access to state and local incentives, property, and system design. Your region’s climate and soil type, the size and layout of your home, the type of loop system installed, and the specific equipment you choose all play a role in your final cost.

System size

The cost of a geothermal heat pump installation largely depends on how much space you need to heat and cool. Your installer will determine the correct system size based on your home’s square footage, insulation quality, number of windows, climate, and overall heating and cooling loads.

A system that’s too large will drive up your upfront costs without improving comfort, while one that’s too small will struggle to keep your home comfortable during temperature extremes. Proper sizing ensures the best balance of performance, efficiency, and cost.

Loop system type

The type of loop your property can support has one of the biggest impacts on overall cost. There are four main loop configurations: Horizontal, vertical, pond, and open loops.

If your property has a suitable water source, a pond or open loop system can significantly reduce excavation costs. However, most residential installations use horizontal or vertical closed loops, with horizontal systems generally being the more affordable option of the two.

System efficiency and quality

Ground source heat pump products vary widely in efficiency and quality. Two rating systems help you compare: Energy Efficiency Ratio (EER) and Coefficient of Performance (COP). In general, ground source heat pumps with higher EER and COP ratings cost more to install, but they heat and cool your home more efficiently.

• Energy Efficiency Ratio (EER) measures cooling efficiency. The number represents the ratio of the heat removed from your home to the amount of electricity used to do so, meaning that a higher EER rating indicates a more efficient system.

• Coefficient of Performance (COP) measures heating efficiency. This ratio indicates the amount of heat the system produces in relation to the electricity it consumes. 

In addition to EER and COP, you can look for a government-certified ENERGY STAR label on geothermal heat pump products, which indicates above-average efficiency. To qualify for this distinction, geothermal heat pumps must use 61% less energy than a standard model and include water-to-water geothermal heat pumps, which provide water heating for your home. 

Site conditions and additional costs

Your property's characteristics can add thousands to your installation cost:

Most ground source heat pump systems pay for themselves through energy savings within 10 to 15 years, according to the U.S. Department of Energy (DOE). Your actual payback period depends on several factors.

• Energy costs: Higher fuel or electricity prices may result in greater savings from an efficient system. If you're currently heating with propane or oil instead of natural gas, your payback period will be much shorter. And when energy prices rise over time—which they typically do—your payback period shrinks.

• Your climate: Homes in areas with extreme temperatures use more energy for heating and cooling, so they see faster payback from efficiency improvements.

• Your previous system: Replacing an ancient, inefficient furnace and air conditioner creates bigger savings than upgrading from a newer, high-efficiency conventional system. If your current system is running efficiently, your savings—and therefore your payback timeline—will be more modest.

• Available incentives: Some states and utilities offer rebates for geothermal installations. Check the Database of State Incentives for Renewables & Efficiency to find programs available in your area. 

Keep in mind that ground source heat pumps offer benefits beyond simple financial payback. You'll enjoy quieter operation, more consistent temperatures throughout your home, elimination of outdoor equipment that can be damaged by weather, and significantly reduced carbon emissions. These quality-of-life improvements have real value that's difficult to quantify.

Ground source heat pumps outlast conventional systems by decades. The underground loop can operate for 50 years or more, while the indoor components typically last 20 to 25 years—compared to just 15 to 20 years for a traditional furnace and air conditioner.

That said, geothermal systems aren’t the right fit for every homeowner. The high upfront cost and longer payback period mean you’ll need time to see a return on your investment. But for those who can afford the installation and plan to stay in their home long-term, few systems offer greater comfort, efficiency, or longevity.