Geothermal heat pump cost
A geothermal system costs $18,000 to $45,000 installed, or about $19,600 typical after the 30% federal credit. Between a third and a half of the bill is drilling or excavation rather than heating equipment.
National average
$28,000
per project
On this page
- What it costs
- The federal credit is the number that decides this
- Where the money goes back
- Whether your property can take it
- Frequently asked questions
- How long does the ground loop last?
- Does it work in cold climates?
- Will it heat my domestic hot water too?
- Can I retrofit it to existing ductwork?
- Is it worth it if I am moving in five years?
A geothermal heat pump costs $18,000 to $45,000 installed, typically around $28,000, before the 30% federal tax credit brings it to roughly $19,600. Between a third and a half of the bill is the ground loop, which is drilling or excavation rather than heating equipment.
It is the most efficient way to heat and cool a house and the most expensive to install. Whether it makes sense turns almost entirely on your land, your existing fuel and how long you intend to stay.
What it costs
| Component | Typical cost |
|---|---|
| Horizontal loop, trenched, per ton | $2,000 to $4,500 |
| Vertical loop, drilled, per ton | $3,500 to $7,000 |
| Pond or lake loop, per ton | $1,500 to $3,000 |
| Open loop, well water | $1,500 to $4,000 |
| Heat pump unit, 3 to 5 ton | $4,500 to $9,500 |
| Desuperheater for domestic hot water | $600 to $1,500 |
| Ductwork modification | $1,500 to $6,000 |
| Electrical, including any service upgrade | $800 to $4,000 |
| Permits and inspection | $200 to $900 |
| Typical whole job, 4 ton | $18,000 to $45,000 |
| Same job after the 30% federal credit | $12,600 to $31,500 |
A vertical loop needs 150 to 400 feet of borehole per ton. A horizontal loop needs roughly a quarter to a half acre of diggable land for a house-sized system, which is the constraint most properties fail.
The federal credit is the number that decides this
The residential clean energy credit covers 30% of the total installed cost of a qualifying geothermal system, with no dollar cap, through 2032. It then steps down to 26% in 2033 and 22% in 2034.
There is no cap. That is unusual, and it is why geothermal maths works now in a way it did not a decade ago. On a $30,000 system the credit is $9,000.
It is a credit against tax owed, not a rebate, though the unused portion carries forward. Many states and electric utilities add their own incentives on top, sometimes several thousand dollars. Check your utility before you sign; some pay per ton.
Where the money goes back
A geothermal system moves three to five units of heat for every unit of electricity, against roughly two for a good air-source heat pump in cold weather and one for resistance heat. It does that because the ground stays near 50°F while the outside air does not.
Realistic operating savings against what you have now:
| Replacing | Typical annual saving |
|---|---|
| Electric resistance or baseboard | $1,200 to $2,500 |
| Propane furnace | $900 to $2,000 |
| Oil boiler or furnace | $800 to $1,800 |
| Older air-source heat pump | $300 to $700 |
| Modern gas furnace with cheap gas | $100 to $500 |
That last row is why geothermal rarely pays back in a house with inexpensive natural gas. The payback is against expensive fuel, not against gas.
Whether your property can take it
Vertical loops need drilling rig access and work almost anywhere, including small lots. They cost the most.
Horizontal loops are much cheaper but need open, diggable land, and the excavation tears up whatever is above it. Best done before landscaping, not after.
Pond loops are the cheapest of all if you have a pond of adequate depth and area on the property.
Open loop systems draw from a well and discharge to another well or a surface outlet. Cheapest to install, and dependent on water quality and local rules that vary sharply by state.
Bedrock near the surface, high water tables, small urban lots and protected groundwater areas all change the answer, and only a site visit settles it.
Frequently asked questions
How long does the ground loop last?
The pipe is high-density polyethylene with a 50 year design life, and manufacturers warrant loops for 50 years or more. The heat pump itself lasts 20 to 25 years, which is longer than an air-source unit because it lives indoors and never runs in extreme temperatures.
Does it work in cold climates?
Better than an air-source heat pump does, and that is the point. Ground temperature at loop depth barely changes through the winter, so output does not fall away on the coldest night the way an air-source system's does.
Will it heat my domestic hot water too?
Partly, with a desuperheater: it takes waste heat from the cooling cycle and preheats the water tank. In summer it is close to free hot water; in winter it contributes rather than provides.
Can I retrofit it to existing ductwork?
Often, but geothermal systems move more air at lower temperature than a furnace, so undersized ducts show up as noise and uneven rooms. Budget for duct modification and expect it to be assessed properly.
Is it worth it if I am moving in five years?
Almost certainly not. The payback runs eight to fifteen years against expensive fuel, and while a geothermal system does lift resale value, it does not lift it by what it cost.
Read next
Heat pump cost$5,000 to $13,000per projectA ducted heat pump costs $5,000 to $13,000 installed, typically near $8,000. The federal tax credit most guides still describe is, according to the IRS, no longer available.
How to pay for an HVAC system$6,500 to $22,000per projectAn $11,000 replacement usually arrives on the day the system stops, and that timing is what makes the financing expensive. Incentives first, then a home equity line, then a credit union. The spread across that list is thousands.
Ductwork replacement cost$3,500 to $12,000per projectReplacing ductwork costs $10 to $35 per linear foot, and a typical house carries 150 to 350 feet. Sealing sound ducts costs far less and often recovers most of the lost airflow.
How long does an HVAC system last$6,500 to $22,000per projectA gas furnace lasts 15 to 25 years and an air conditioner 15 to 20. Those ranges are wide on purpose: two identical systems on the same street routinely differ by a decade, and almost none of it is brand.
HVAC cost by house size$6,500 to $20,000per projectA full changeout runs about $9,600 in a 1,100 square foot house and about $12,400 in a 2,800 square foot one. The house more than doubles; the bill goes up by less than a third, because most of what you pay for is the crew and the day.