Geothermal Heat Pump Savings Calculator
Geothermal (ground-source) heat pumps leverage the stable temperature of the earth to achieve high efficiencies year-round. Because ground temperature stays between 45-75 F regardless of outdoor air temperature, GSHPs maintain high COP in both winter and summer. This calculator compares annual heating and cooling costs for a GSHP against a gas furnace with central air, an air-source heat pump, and electric resistance heating, using your local energy rates and annual energy needs.
Geothermal savings formulas
GSHP Heat kWh = (Heat MMBtu x 293.07) / GSHP Heat COP
GSHP Cool kWh = (Cool MMBtu x 293.07) / (EER / 3.412)
GSHP Annual Cost = (Heat kWh + Cool kWh) x Electricity Rate
Gas Furnace Cost = (Heat MMBtu x 10) / (AFUE/100) x Gas Rate ($/therm)
Net Install Cost = Install Cost x (1 - Tax Credit / 100)
Payback = Net Install Cost / (Gas Annual Cost - GSHP Annual Cost)
Conversion: 1 MMBtu = 1,000,000 BTU = 10 therms = 293.07 kWh. COP for cooling = EER / 3.412. Source: EIA Appendix A and ASHRAE Standard 90.1.
Why geothermal heat pumps are more efficient
- Ground temperature at 6-10 feet depth stays between 45-75 F year-round in most of the US, regardless of outdoor air temperature.
- Air-source heat pumps must work against outdoor temperatures that range from below 0 F (winter) to 95+ F (summer), reducing their COP significantly at extremes.
- The EPA has rated GSHP systems as among the most environmentally friendly heating and cooling systems available, producing less CO2 per BTU of useful heat than gas furnaces or electric resistance heating in most US states.
- GSHP systems also provide domestic hot water pre-heating through a desuperheater, adding additional savings of 25-50% on water heating costs.
Geothermal heat pump savings: frequently asked questions
What is a geothermal (ground-source) heat pump?
A geothermal or ground-source heat pump (GSHP) exchanges heat with the earth rather than the outdoor air. Ground temperature remains relatively constant (45-75 F depending on latitude), giving GSHPs a stable high-efficiency heat source/sink year-round. EPA rates GSHPs as one of the most energy-efficient heating and cooling systems available.
What COP should I expect from a geothermal heat pump?
GSHPs typically achieve heating COP of 3.0-5.0 and cooling EER of 13-25 depending on entering water temperature and equipment. DOE/NREL studies show average annual COP of 3.0-4.5 for closed-loop systems in most US climates, compared to 2.0-3.5 for air-source heat pumps. The IGSHPA (International Ground Source Heat Pump Association) and ASHRAE Standard 90.1 document GSHP performance.
What are the EER and COP of geothermal cooling?
EER (Energy Efficiency Ratio) is the BTU of cooling per watt-hour of electricity for a specific set of conditions. For geothermal systems, EER is measured at AHRI/ASHRAE standard conditions with 77 F entering water temperature. EER / 3.412 = COP for cooling. Typical GSHP EER ranges from 17 to 30, corresponding to cooling COP of 5 to 9.
How much does geothermal installation cost?
GSHP installation costs are higher than air-source systems due to drilling or trenching for the ground loop. DOE estimates residential GSHP installed costs of $15,000-35,000 for a 3-5 ton system (closed-loop vertical bore). The Inflation Reduction Act provides a 30% federal tax credit for geothermal heat pump installations through 2032 (IRS Section 25D).
What federal incentives are available for geothermal heat pumps?
The Inflation Reduction Act (IRA) extended the residential clean energy credit (Section 25D) at 30% of installed cost through 2032 for geothermal heat pump systems. There is no dollar cap on this credit. Many states offer additional incentives through DSIRE (Database of State Incentives for Renewables and Efficiency, dsireusa.org).
Official sources
- U.S. DOE: Geothermal Heat Pumps (DOE Energy Saver).
- EPA: EPA Geothermal Heat Pump Technology Assessment.
- IGSHPA: International Ground Source Heat Pump Association.
Reviewed by the CalculatorHub team, edited by James Graham, 14 June 2026. See our methodology.