How Much Can You Save with a Geothermal Heat Pump?

Hands holding money

How much can you save on average with a geothermal heat pump system?

You know that geothermal heating and cooling is one of the most environmentally friendly ways to regulate temperature at home. You also know that it’s the safest solution since you don’t have any combustion or fumes to deal with, as you do with gas and oil. But  Is a geothermal heat pump worth it?

At first, people can be somewhat intimidated by the thought of installing a geothermal system, simply because it’s different from the default of “getting the gas turned on” when they move into a new house. Really, a geothermal heating system is a well-established technology that offers dependable results and requires little maintenance.

Price can also seem daunting simply because you have an option for an initial investment up front, as opposed to sending back those familiar utility bills with a fresh-cut check every month.

The truth is, you do have options for financing geothermal if you’re not up for buying the system outright. Also, there are significant cost savings on a monthly basis by switching to a geothermal heat pump. We’ll address several aspects of the finances of a geothermal heat pump in this article.

Upfront Cost of a Geothermal System

The obvious number-one question for geothermal is: how much does it cost to actually buy the system up front?

Initial costs for a ground-source geothermal system include the heat pump itself and the ground-loop system. The ground-loop system costs can vary based on the site and what type of loop system will be installed.

Climate, soil composition, and local regulations can potentially affect the initial cost as well. For most ground-source geothermal heat pump systems, the average cost, including these components and in addition to the labor or digging and installation, can be anywhere between $50,000 and $100,000.

The cost isn’t so much about the heat pump, that’s pretty inexpensive. It’s the drilling and installation that’s a massive expense for most homeowners.

At Dandelion, we’ve perfected this process so that our geothermal system can cost anywhere between $18,000 and $25,000.

Financing Your Geothermal System

Another option is to finance your geothermal system rather than purchase it upfront. This allows you more flexibility if coming up with the whole amount seems unrealistic or simply undesirable for you.

There are several options for financing a geothermal home investment, including home equity loans, subsidized loans, and specialized or peer-to-peer loans. Interest rates on these loans will depend mostly on your particular credit situation and how much money you are able to put down on the loan, if any.

At Dandelion, we like to keep financing simple, with a $135 monthly cost over a 20-year period. Whether you purchase the geothermal system upfront or choose to finance it and spread the expense out over time, you’ll still be eligible for local and federal tax credits and incentives.

How Much Does it Cost to Run a Geothermal Heat Pump?

Once you have your heat pump and all the parts installed, what are geothermal heating monthly costs? The main operational cost associated with geothermal heat pumps is the electricity needed to run them. The great news is, they use 25 to 50 percent less electricity than traditional heating sources.

In fact, geothermal heating and cooling only requires one unit of electricity to move three to five units of heat into a home, or to remove heat from the home to cool it.

Other possible costs include the occasional heat pump maintenance needs that could arise. Though, for the most part, geothermal is a hands-off system, having a technician perform an annual checkup on your heat pump will ensure that your system is running at its best.

Should a heat pump need replacing at some point within the 20-year lifespan of the system, this can cost around the same as a new furnace.

Expected Payback Period for Geothermal Heating and Cooling

Geothermal heating and cooling systems are the most efficient options for homeowners. In fact, ground-source geothermal heat pumps can reach 300 to 600 percent efficiency. This boost in efficiency and reduced reliance on limited (and increasingly expensive) resources can make a big difference in your regular expenses, which adds up fast.

According to, these reductions in energy costs will help you recoup the costs of installing your geothermal system within between 5 and 10 years. This range is due, in large part, to energy costs where you live.

In some cases, the payback period for installing a geothermal heat pump can be as short as three years! Especially as utility rates continue to climb, the price for getting out of dependency on these resources will pay off more and more over time.

Regardless of whether you decide to purchase your geothermal heating and cooling system as an upfront investment or to finance your purchase, owning a geothermal heat pump will set you up for financial and physical comfort.

See if your home qualifies by taking our 30 second survey

New call-to-action