Geothermal Heat Pumps

New Commercial

What are Geothermal Heat Pumps?

Geothermal heat pumps (GHPs), also known as ground source heat pumps or geo-exchange systems, use the constant temperature (45°F- 75°F) of the earth to cool buildings in the summer and warm them in the winter. [1] Geothermal technology consists of open-loop or closed-loop systems. Open-loop systems draw water from a well or a surface water body to circulate as a heat exchange fluid through the system and then returns the water to the ground through a well or surface discharge.[2] Closed-loop systems, configured as horizontal, vertical, or pond/lake systems, use a non-toxic antifreeze solution as the heat exchanger.[3] Some GHPs have wells drilled vertically deep underground and can fit into space constricted areas, while others have horizontal loops a shorter distance below ground that require adequate space or land.[4]

Figure 1- Summer and Winter scenarios of GHPs (Source: NYSERDA)

Figure 1- Summer and Winter scenarios of GHPs (Source: NYSERDA)

How to Incorporate Geothermal Heat Pumps

The practicality of a geothermal heat pump for a specific project increases when considered early in the planning stages of the site and building design. Renewable energy systems are complex and require project team members with on-site renewable energy system expertise. The US DOE’s Federal Energy Management Program’s Guide to Integrating Renewable Energy in Federal Facilities offers advice on understanding renewable energy options, selecting appropriate types of renewable energy technologies, and integrating these technologies into all project phases. For implementation in New Jersey, project teams should contact the NJ Office of Clean Energy to learn about current programs, tools, and available funding. Critical project-specific variables to consider include location, space, energy costs, available project incentives, local net metering and interconnection policies. Pre-implementation steps for an on-site renewable energy system project comprise preliminary screening, a renewable energy feasibility study, sizing and design of systems. [5] For example, site assessments include analysis of geology, hydrology, and land availability to determine whether to install vertical or horizontal ground loops and opportunities to utilize local water bodies. [6]

Look for ENERGY STAR qualified geothermal heat pumps that use about 45% less energy than a standard heat pump.[7] Find qualified installers through your local utility company, the International Ground Source Heat Pump Association, or the Geothermal Heat Pump Consortium.


Atlantic County Utilities Authority (ACUA), Atlantic City and Egg Harbor Township, NJ

The ACUA’s clean energy initiatives include a geothermal heating and cooling system at its GeoBuilding. The system depends on heating well water through fifty closed-looped wells on a field adjacent to the building. The system extracts heat from the water in the winter and transfers heat to the ground in the summer.

Township of Montclair Clean Energy Municipality, Montclair, NJ.

The Rand School, serving grades K-5, in Montclair, NJ uses a geothermal heating and cooling system. A pump house manages the heat supplied from deep in the ground. The geothermal system heats and cools the building by utilizing liquid-filled tubes, cooled to 54 degrees Fahrenheit (cave temperature.)


Incorporating a geothermal system reduces greenhouse gas emissions, protects against the fluctuating costs of fossil fuels, and saves on purchasing energy from utility companies while providing additional ecological and user benefits. Geothermal pumps have a higher efficiency than air pumps and produce less noise pollution as most of the moving parts are underground.[8] Depending on the cost and type of fuel, heating with geothermal pumps can cost 25-50% less than that of conventional heating.[9] Compared to air-source heat pumps, geothermal pumps last longer, require less maintenance and do not depend on outside air temperatures.[10]


The capital cost of geothermal systems averages $7, 000.00 per ton including the bore field.[11] Highly site-specific, well field costs can quickly add tens of thousands of dollars to overall system cost. Life-cycle costs can deliver a relatively quick payback beginning at 5 years, based on significant heating cost savings.[12] Annual energy savings can vary from 25% to 50%.[13] Also, maintenance and upkeep cost less than traditional types of heating and cooling equipment.

  • Incremental cost (e.g., the cost of the green technology minus the cost of conventional technology) is around $3,957/ton.[14]
    • Annual cost savings (e.g., annual kWh saved * $0.14/kWh [the price of electricity])
    • According to US DOE Energy Savers, using GHPs reduce electricity consumption by 25-50%.

Scenario: Consider a 20,000 SF commercial building using 50,000[15] btu/SF over five years.

In one year:

50,000btu/SF ÷ 5 years = 10,000 btu

10,000 btu/SF * 20,000 SF = 200,000,000 btu

200,000,000 btu * (2.93×10-4 kWh/1 btu) = 58,614kWh consumed.

A reduction in electricity consumption of 50% means a savings of 29,307 kWh, or:

29,307 kWh * $0.14/kWh = $ 4,102.98

  • Payback (Capital Costs or Incremental Costs / annual cost savings)
    Incremental Cost = $3,957

Annual Cost Saving =             $4,102.98

$3,957/$4,102.98 =                 0.96

It will take less than one year to achieve a return on the investment in a geothermal heat pump.


Geothermal heat pumps increase grid resiliency by helping to diversify sources of clean and renewable energy and by providing a consistent and energy-efficient source of renewable energy to supply the grid in the absence of wind or solar. Geothermal heat pumps with thermal energy storage can operate off the grid and supply energy to emergency services and infrastructure during power outages.

[1] US DOE  “Geothermal Heat Pumps.” (accessed  April 4, 2018).

[2] ENERGY STAR. “Choosing and Installing a Geothermal Heat Pumps.” (accessed April 5, 2018).

[3] US DOE “Geothermal Heat Pumps.” (accessed April 5, 2018).

[4]  US DOE. “Guide to Geothermal Heat Pumps” (accessed April 4, 2018).

[5] US Dept of Energy’s (DOE) Federal Energy Management Program (FEMP). Guide to Integrating Renewable Energy in Federal Construction. (accessed May 8, 2018).

[6] ENERGY STAR. “Choosing and Installing a Geothermal Heat Pumps.” (accessed  April 4, 2018).

[7] ENERGY STAR. “Heat Pumps, Geothermal for Consumers.” (accessed  April 4, 2018).

[8] Ibid.

[9] US DOE. Energy Savers: Benefits of Geothermal Heat Pumps. (accessed April 20, 2018).

[10] US DOE | EERE. “Geothermal Heat Pumps.” (accessed April 4, 2018).

[11] Rutgers University Facilities Department – Based on estimates received for new buildings.

[12] US DOE. “Geothermal Heat Pumps.” (accessed April 18, 2018).

[13] US DOE. Choosing and Installing a Geothermal Heat Pump System. (accessed April 12, 2018).

[14] NEEP. “Mid-Atlantic Technical Reference Manual Version 7.” (accessed April 18, 2018).

[15] US DOE | EERE. Planning, Budget & Analysis: Commercial Buildings Total Energy Consumption. April 2008. Assume an average of 50k btu for all sectors. (accessed April 18, 2018).