How Much Does a Geothermal Heat Pump Cost in 2024?

Geothermal Heat Pump Cost Factors

Geothermal heat pump costs range significantly depending on the system size and capacity, land modification requirements, labor, and other primary cost factors.

Capacity

Geothermal heat pumps are generally measured in tons. One ton equates to 12,000 British thermal units (BTUs), a measure of heat energy that indicates the geothermal heat pump’s capacity and power. Each ton, or 12,000 BTUs, costs between $2,500 and $8,000, and most homes need about one to 1.25 tons per 500 square feet.

Based on those figures, the average 2,000-square-foot home needs a three- to four-ton system, which costs between $7,500 and $32,000. Keep in mind that these are estimates—your home’s layout, levels, insulation, and other factors may affect your contractor’s capacity assessment.

See further geothermal heat pump estimates:

Land Modifications

Soil, terrain accessibility, and other geological features influence the land modifications required to install a geothermal heat pump. Most homeowners pay between $5,000 and $15,000 for various labor needed to prep the installation site. Difficult soil conditions, challenging accessibility for heavy equipment, and larger systems generally result in higher costs.

In some cases, geothermal heat pump installations may require professional soil composition testing—which averages $1,300—to determine its heat transfer potential. Depending on their findings and the site, your contractors may have to treat the soil or dig deeper to find more consistent temperature and moisture. The deeper the ground loop piping, the higher the drilling and piping installation cost.

Labor

Labor typically constitutes between 50% to 70% of total installation costs. Geothermal heat pump installers must have highly specialized technical skills and knowledge to design a system. With specialized skills and fewer competing contractors, geothermal heat pump installers generally charge higher rates than the average HVAC technician.

Contractors for these major installations don’t always charge an hourly rate. More often, they estimate the number of workers and approximate hours of labor your project requires and build those expenses into the final cost. They may also include the cost of subcontractors, such as excavation companies.

New Construction vs. Retrofitting

Geothermal heat pump installation may require modifications to your home. For instance, replacing or installing new ductwork costs between $1,400 and $5,600. Some homes require electrical work, such as main panel upgrades or rewiring, to accommodate the new system.

It’s often more affordable to install brand-new ductwork systems in new construction—where walls are open and easily accessible—than to modify existing ductwork. Retrofitting ductwork, which may involve opening existing walls and making extensive modifications, costs $10 to $20 per linear foot.

Permits

Geothermal heat pump installations typically require permits and inspections to ensure compliance with municipal regulations. Contractors facilitate the permit process, but homeowners usually pay permit fees, which average $100 to $650, as part of the total installation price. Open-loop systems may require additional permits for groundwater discharge, ranging from $100 to $1,000.

Additional Geothermal Heat Pump Cost Factors

The following costs may not influence every installation, but they’re important for homeowners to consider when organizing their project budget.

Energy Efficiency

Varying across brands and models, most geothermal heat pumps are rated between 15 and 45 on the Energy Efficient Ratio (EER) scale, with higher ratings reflecting higher efficiency. High-efficiency systems may have variable-speed compressors and other features to optimize energy consumption. Higher EER ratings typically correspond to higher costs, but reduced energy consumption can translate to long-term savings.

Rebates and Tax Credits

Federal, state, and local rebates and tax incentives help offset the cost of qualifying geothermal heat pump installations. For instance, the Residential Clean Energy Tax Credit allows eligible homeowners to claim 30% for geothermal heat pumps installed between 2021 and 2033. States and cities often offer similar tax credit programs.

Maintenance and Repairs

Geothermal heat pumps are low-maintenance and durable compared to other types of heat pumps, but they still require periodic maintenance and repairs to run smoothly. Annual heat pump maintenance costs an average of $150 per service, ranging from $75 to $300. Heat pump repair costs average about $400, but costs vary widely depending on the issue. For instance, a compressor replacement averages $2,500, while a thermometer replacement averages $200.

Climate

Climate affects the efficiency and overall cost of a geothermal heat pump. Areas with significant temperature ranges rely more heavily on heating and cooling than mild climates. As such, homeowners in these areas may see more energy and cost savings with a geothermal heat pump and recoup their investment more quickly.

Geothermal Heat Pump Cost by Configuration

Four configurations make up the available geothermal heat pump systems. Three are closed-loop systems—horizontal, vertical, and pond configurations. These circulate water or a mixture of water and glycol through a closed loop buried in the ground or submerged in water. Open-loop systems drain groundwater after use rather than circulating it.

Each system carries unique costs, and the best geothermal heat pump system for your home largely relies on compatibility with your soil conditions and climate. Your installer can guide you through your options to determine the ideal configuration.

Horizontal

Horizontal geothermal heat pump systems range from $15,000 to $34,000 and are generally the most cost-effective for rural areas and new construction with land space to spare. This system features trenches at least four feet deep and needs between 0.25 and 0.75 acres for installation. Depending on the soil conditions, most configurations either bury one pipe at six feet and one at four feet or two pipes side-by-side.

Vertical

Vertical geothermal heat pump systems cost between $20,000 and $38,000. These systems feature four-inch boreholes drilled 100 to 400 feet deep and spaced 20 feet apart. Two pipes connect at the bottom with a U-bend to form the loop. The pipes connect to a horizontal pipe placed in trenches and linked to the heat pump unit. Vertical systems carry higher costs due to extra drilling complexity and labor, but they’re well-suited to installations with limited space.

Pond

Pond loops, which cost between $10,000 and $32,000, use water instead of soil for heat exchange. This system requires a body of water with the appropriate depth, volume, and quality. It uses an underground supply line pipe from the building to the water, so installation costs increase the further your home is from the water.

Open-Loop

With average costs between $10,000 and $28,000, open-loop geothermal heat pump systems work similarly to pond systems and require close proximity to a freshwater source. These systems may cost less than others since they don’t require as much digging, but homeowners may be subject to local regulations for groundwater disposal.

Other Home Energy Efficiency Improvements

Geothermal heat pumps can reduce energy consumption and costs, and other upgrades can maximize those benefits. Energy audits cost between $100 and $2,250, some of which the Inflation Reduction Act covers. These home energy audits analyze your home to identify opportunities for improved efficiency, generally with reports detailing costs and savings through suggested efficiency upgrades.

Maximize the efficiency benefits of a geothermal heat pump with these home energy efficiency improvement projects.

Benefits of Geothermal Heating and Cooling Systems

Geothermal heat pumps offer numerous benefits over other heating and cooling systems. These benefits include:

• Utility bill savings: Geothermal heat pumps use up to 65% less electricity than other systems, offering significant savings and a fast return on investment.

• Environmentally friendly: Geothermal systems may contribute to a smaller carbon footprint by reducing energy consumption and avoiding direct emissions of carbon dioxide, carbon monoxide, and other gases.

• Longevity: Geothermal systems last between 25 and 50 years, significantly longer than conventional HVAC systems, depending on maintenance and other factors.

• Quiet operation: With most of the operation happening underground, geothermal systems have much lower decibel ratings than others.

Does Installing a Geothermal Heat Pump Increase Home Value?

Homeowners can increase their property value with geothermal heat pumps. Low utility costs, environmental appeal, modern HVAC features, and other benefits attract potential buyers who prioritize sustainable and eco-friendly home features and systems.

The total impact on home value depends on various factors, but reports show that homes with modernized, energy-efficient equipment typically sell for 2.7% more than other homes. This may be especially true for geothermal heat pumps, which are a major investment and addition compared to smaller energy-efficient upgrades.

Budgeting for a Geothermal Heat Pump

Geothermal heat pump installation is a major investment. Try these strategies to help streamline and optimize your budget:

• Get quotes from multiple contractors and compare estimate details for the best value.

• Research tax rebates and incentives through federal, state, or local governments and utility companies.

• Opt for a home energy audit and efficient upgrades.

• Stay up to date with maintenance and repairs to maximize efficiency.

How HomeAdvisor Gets Its Cost Data

No place is more important than your home, which is why HomeAdvisor connects homeowners with local pros to transform their houses into homes they love. To help homeowners prepare for their next project, HomeAdvisor provides readers with accurate cost data and follows strict editorial guidelines. We surveyed over 30,000 real customers about their project costs to develop the pricing data you see, so you can make the best decisions for you and your home. We pair this data with research from reputable sources, including the U.S. Bureau of Labor Statistics, academic journals, market studies, and interviews with industry experts—all to ensure our prices reflect real-world projects.