How does a geothermal heat pump work?

The energy is used by a Geothermal Heat Pump (GHP), also called Ground Source Heat Pump, which takes this heat during the heating season at an efficiency approaching or exceeding 400%, and then, if cooling is used, return it during the cooling season. In residential homes however, most common solution is to use a GHP to provide heating and hot water.

The GHP uses one part of electricity to provide approximately 4 parts of energy in form of heat and hotwater. The electricity is used to circulate a water based solution through loops underground and to extract this energy through a compressor and a condenser. Some electricity may also be used for heating in very cold weather. The system can operate efficiently all-year as the temperature underground is stable and is therefore much more efficient compared to air source heatpumps.

GHP's are normally saving 30–70% of used energy for heating and hot water needs compared to conventional systems and have a payback time of about 5–8 years.