Home › Guides › Heat pumps

Homeowner guide

Heat Pumps: Types, Geothermal Costs and Payback

Heat pumps heat and cool a home by moving heat instead of making it. The main types are air-source, geothermal, ductless mini-split and absorption. In moderate climates they can be an efficient alternative to a furnace and air conditioner. Geothermal systems cost several times more to install, but the extra cost may come back in energy savings in 5 to 10 years.

The main types

  • Air-source heat pumps, which exchange heat with outdoor air
  • Geothermal (ground-source) heat pumps, which exchange heat with the ground
  • Ductless mini-splits
  • Absorption heat pumps

In moderate climates, heat pumps can be an energy-efficient alternative to furnaces and air conditioners. [1]

How geothermal works

A few feet down, the ground stays at a fairly constant 40 to 70°F all year. That is warmer than winter air and cooler than summer air. A geothermal heat pump draws heat from the ground in winter and puts heat back into it in summer, so it does not depend on the outdoor air temperature. [2]

Geothermal cost and payback

A geothermal system can cost several times as much to install as an air-source system of the same size. Depending on energy costs and local incentives, the extra cost may be returned in energy savings in 5 to 10 years. Compared with air-source heat pumps, geothermal systems are quieter, more efficient, last longer and need little maintenance. The inside parts are estimated to last up to 24 years and the ground loop more than 50. [2]

Ground loop options

  • Horizontal: trenches at least four feet deep, usually the most cost-effective for homes with enough land
  • Vertical: holes drilled 100 to 400 feet deep, used when land is limited
  • Pond or lake: coils placed under water that meets depth and quality rules
  • Open loop, using well or surface water directly
[2]

What to ask an installer

  • Which type fits my climate and home, and why?
  • Do I need ductwork, or would a ductless system work?
  • What will it cost to run compared with my current system?
  • Which local incentives or rebates apply, and will you help with the paperwork?
  • Who handles service and warranty claims after installation?

Looking for a HVAC company? See the top rated hvac companies in 30 cities, ranked from public reviews.

Find one near you

Questions

What types of heat pumps are there?

The U.S. Department of Energy lists air-source, geothermal, ductless mini-split and absorption heat pumps.

Are geothermal heat pumps worth it?

They cost several times more to install than air-source systems, but the Department of Energy says the extra cost may be returned in energy savings in 5 to 10 years.

How long does a geothermal system last?

The Department of Energy estimates up to 24 years for the inside parts and 50 or more years for the ground loop.

Sources

  1. Heat Pumps, U.S. Department of Energy
  2. Geothermal Heat Pumps, U.S. Department of Energy

This guide is general information, not professional advice. It summarizes the sources above, which were last checked on October 22, 2026. Talk to a licensed contractor about your own situation.

Top rated hvac companies by city