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Geothermal Heat Pumps: Efficient, Eco-Friendly Heating

Learn how geothermal energy can lower your heating costs and improve efficiency.
By the Westfalia editorial team · Updated on 28.07.2026
Created and reviewed by the Westfalia editorial team.

In brief: A geothermal heat pump uses the ground’s steady temperature to heat your home. It draws heat from the soil and raises it to a usable temperature with electricity. This sustainable heating technology can significantly reduce heating costs and lower CO2 emissions. Its high efficiency makes it a great choice for new homes and renovations.

How does a geothermal heat pump work?

A geothermal heat pump uses solar energy stored in the ground. It draws heat from the soil through ground loops or horizontal ground collectors. A refrigerant carries this energy to the heat pump inside your home.

There, the refrigerant evaporates even at low temperatures. A compressor pressurizes the vapor, raising its temperature significantly. The refrigerant transfers this heat to your heating water through a heat exchanger.

The cooled refrigerant condenses back into a liquid. An expansion valve lowers its pressure before the cycle starts again. The steady temperature underground helps the system operate efficiently year-round.

What types of geothermal heating systems are available?

There are two main ways to harness geothermal energy. The right option depends on your property and heating needs.

Ground loops: The space-saving deep-bore option

Ground loops are plastic pipes that extend vertically up to 100 meters into the ground. A brine solution made of water and antifreeze circulates through these closed loops, absorbing heat from deep underground.

This method requires very little land. However, it requires a permit. Deep drilling calls for specialized contractors and costs more to install.

Ground loops are the most efficient option. They benefit from the steady temperatures underground and provide reliable energy even during severe winters.

— Markus Weber, Graduate Engineer and Energy Consultant

Horizontal ground collectors: The larger-area option

Horizontal ground collectors are installed about 1.2 to 1.5 meters below the surface. A network of plastic pipes covers a large area. As a general rule, plan for an area about one-and-a-half to twice the size of the living space you want to heat.

This option is more affordable and usually does not require a permit. However, you need a sufficiently large, undeveloped property. Do not plant deep-rooted trees or build structures above the collectors.

Pro tip

Always plan for a buffer tank with horizontal ground collectors. It stores excess heat and reduces the load on the pump during peak demand. This can extend the system’s service life and improve comfort.

Why can a geothermal heat pump lower your heating costs?

Efficiency is measured by the seasonal performance factor. This value compares the heat produced with the electrical energy used. Modern geothermal heat pumps achieve values between 4 and 5.

That means one kilowatt-hour of electricity produces four to five kilowatt-hours of heat. The system gets three-quarters of its heating energy from the ground at no cost. This high efficiency can make a noticeable difference on your heating bill.

Compared with oil or gas heating systems, you can reduce operating costs by up to 50 percent. Relying less on fossil fuels also helps protect you from future price increases. Good home insulation is essential for the best efficiency. Find suitable materials for your heating system in our heating pipe insulation range.

How much does a geothermal heat pump cost to install?

The investment has two main parts. The heat pump unit itself costs between 10,000 and 15,000 euros. Tapping into geothermal energy is the variable and often more expensive part.

Horizontal ground collectors cost around 5,000 to 10,000 euros. Ground loops cost between 8,000 and 15,000 euros because they require deep drilling. The total investment is therefore between 20,000 and 30,000 euros.

Important note

Don’t skip a professional heat-source calculation. Only a qualified specialist can determine the exact length of the ground loops or the required collector area. An undersized system can freeze and lose efficiency. An oversized system wastes money.

These costs can pay for themselves over time. Government incentives can further improve the economics. For controlling your new, efficient heating system, a modern thermostat is a good choice, such as our

.

Many homeowners underestimate the long-term value. The higher upfront cost of a geothermal heat pump can pay off over a 20-year service life. You’re buying more predictable energy costs for the next two decades.

— Katrin Schmidt, Homeowner Advisory Service at the Consumer Advice Center

What incentives are available?

The Federal Funding for Efficient Buildings program is the main point of contact. You may be eligible for a grant toward the investment costs. Replacing an old oil heating system with a geothermal heat pump may qualify for funding of up to 40 percent.

You must submit your application before construction begins. An approved energy efficiency expert must support your project. Funding covers the heat pump, development of the heat source and any necessary related work.

Some states and municipalities also offer their own programs. Check with your local authority. Low-interest loans from KfW Bank may also supplement the available incentives. Careful planning with a qualified heating contractor is essential.

How do you plan a geothermal heating project?

Start with an energy consultation. An expert will assess your building’s condition and heating needs. This calculation provides the basis for sizing the entire system.

Next, check the geological conditions. A test borehole provides information about the thermal conductivity of the ground. This data helps determine whether ground loops or horizontal collectors are the better option.

Additional advice

Pair your geothermal heat pump with a solar panel system. The solar power you generate can run the pump’s compressor. This lets you heat your home with less reliance on outside energy and keep operating costs down. Find technology for your outdoor space in our Garden + Outdoor category.

Compare several quotes from qualified contractors. Look for references and membership in professional associations such as BWP. Planning and installation require specialized expertise. For your other home and property projects, explore our extensive Shop.

What are the benefits of this sustainable heating technology?

A geothermal heat pump can significantly reduce your carbon footprint. It doesn’t burn fossil fuels on site. Ideally, the electricity it uses comes from renewable sources, helping you heat your home with very low carbon emissions.

The technology operates quietly and needs little maintenance. There are no exhaust fumes, soot or odors. You don’t need a fuel storage room or chimney. It can also increase your property’s value.

Geothermal heat pumps are reliable. The ground stays above freezing at the required depth, providing a dependable heat source throughout the year. You can also use sustainable systems to water your garden, such as those in our garden irrigation range.

What are the alternatives to a geothermal heat pump?

Air-source heat pumps are the best-known alternative. They draw heat from the outdoor air and are simpler and less expensive to install. However, their efficiency drops noticeably when outdoor temperatures fall in winter.

Water-source heat pumps use the relatively constant temperature of groundwater. They can achieve seasonal performance factors similar to those of geothermal systems. Their installation requires approval under water regulations, so they are not an option everywhere.

The right choice depends on your location, budget, and long-term goals. A geothermal heat pump offers excellent efficiency and predictable performance. It is an investment in an independent, cost-effective source of heat for generations to come.

Frequently Asked Questions

How much does a geothermal heat pump cost?
A geothermal heat pump typically costs between 20,000 and 30,000 euros. This includes the heat pump unit and the extensive ground work needed to install borehole heat exchangers or ground loops. Over time, its high efficiency can offset the initial investment through significantly lower heating costs. Government grants can also substantially reduce the purchase cost.
Why is a geothermal heat pump so efficient?
A geothermal heat pump is efficient because the ground maintains a relatively constant temperature. At a depth of 10 meters, temperatures stay around 10 degrees Celsius year-round. The heat pump raises this temperature instead of drawing heat from cold winter air. As a result, it can achieve a high seasonal performance factor and produce more heat while using less electricity.
What types of homes are suitable for a geothermal heat pump?
Geothermal heat pumps are especially well suited to well-insulated new homes and energy-efficient renovations, particularly when paired with radiant heating systems such as underfloor heating. You will need enough yard space for ground loops or approval to install deep borehole heat exchangers. A qualified installer can assess the ground conditions and recommend the best solution for your property.
Can I cool my home with a geothermal heat pump?
Yes. Many geothermal heat pumps have a passive cooling function. In summer, cool water from the ground circulates through your underfloor heating system or specially designed cooling ceilings. Passive cooling uses very little electricity to run the circulation pump, making it an efficient, cost-effective alternative to conventional air conditioning.
What grants are available for geothermal heat pumps?
In Germany, the government supports geothermal heat pump installations through the Bundesförderung für effiziente Gebäude program. You may be eligible for a grant covering up to 40 percent of eligible costs. An energy efficiency expert must submit the application before work begins. This funding can make the investment considerably more attractive.
Geothermal Heat Pump: Benefits & Costs
Heat your home efficiently and independently with geothermal energy.