Geothermal heating and cooling (which is a heat pump) is the most energy-efficient system available. It typically saves up to 70% on energy costs compared to traditional HVAC (heating, ventilation, and air conditioning) systems. The EPA (Environmental Protection Agency) refers to geothermal heating and cooling as "the most energy-efficient and environmentally sensitive of all space conditioning systems." Since they are ENERGY STAR rated, they qualify for tax benefits and possible utility rebates. They also provide very comfortable, reliable heating/cooling for your home all year round and can also supply you with hot water.
A geothermal system uses the earth's natural thermal energy to supply the heating/cooling for your home. A concept that most people find difficult to understand is heat can be extracted from any material regardless of how cold it is. However warmer materials increase the energy efficiency of the system. In a typical system, water is circulated (usually with antifreeze depending on climate) through tubing that buried underground or submersed in a lake several feet under where the temperature remains relatively constant all year round. Once you reach about 5 feet, the temperature stays constant between 45F to 65F depending on your local climate. Therefore in the winter, you are absorbing the heat from the ground to heat the home and in the summer you are dissipating heat into the ground, which removes the heat from the home (cooling).
Geothermal heat pumps are two to three times more efficient than the most efficient gas furnace. This is possible by extracting the heat that already exists in the earth (free heat) instead of burning a combustible fuel (costs money). Another benefit of this type of system is it does not have an outdoor unit (they are noisy), which is typical on most homes since they are air-source heat pumps or air conditioners. The entire system (except the buried loop) is located inside the building, therefore, reducing the wear and tear of the outdoors and crawl space environments. Since they do not burn fuel, there is no flue or chimney and zero risk of carbon monoxide/fire.
Approximately 70% of the energy generated in a geothermal system comes from its loop (earth's thermal energy). Then only a small amount of electricity is needed to concentrate this thermal energy (the compressor & refrigeration cycle) and circulate high-quality heat or cool air throughout the home (the blower).
The reason more of these systems are not installed is because most people do not understand them or believe the installed cost is more expensive than traditional HVAC systems. If you factor in the 30% federal tax credit available and local utility rebates as much as $1,000.00 per ton, the installed cost can be equal to or less than a conventional system.
Regardless, if you plan on living in the home for more than 5 years, they are worth the additional cost, especially if you are building a large, expensive home, the payback is even sooner.
The additional benefits of the geothermal heat pump are low yearly maintenance costs and long life expectancy. A typical geothermal heat pump system's life is estimated to be 25 years for the components inside the home and more than 50 years for the loop system. No environmental impact. The EPA finds geothermal heat pump systems to be the most energy efficient and environmentally friendly system available for heating and cooling.