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Geothermal vs. Air Source Heat Pumps – What’s the Difference?

Heating and cooling systems play a crucial role in maintaining comfortable indoor temperatures in homes around the world. With advancements in technology, homeowners have various choices for energy-efficient heating and cooling systems. Two popular options are geothermal heating systems and air source heat pumps (ASHP). This comprehensive guide will help you decide whether to install a geothermal heating system or an air source air-to-air/air-to-water heat pump in residential applications in Canada and the United States. We’ll discuss different types of geothermal systems, ground loop systems, borehole systems, lake loop systems, and cold-climate air source heat pump systems, along with potential grants and tax incentives for each approach.


Different Types of Geothermal Heating Systems
Geothermal heating systems use the Earth’s constant temperature to heat and cool buildings. These systems consist of three main components: the ground loop, the heat pump, and the distribution system. Geothermal systems come in various forms, including ground loop systems, borehole systems, and lake loop systems – learn all about geothermal heating here.


Ground Loop Systems

Ground loop systems use a series of buried pipes to extract heat from the Earth. These pipes contain a mixture of water and antifreeze that circulates in the loop and absorbs heat from the ground.


Borehole Systems

Borehole systems involve drilling deep holes into the ground and inserting pipes vertically. Such systems are suitable for areas with limited horizontal ground loop space.


Lake Loop Systems

Lake loop systems utilize bodies of water such as ponds or lakes as heat sources. Pipes submerged in the water extract heat and transfer it to the building.


Air Source Heat Pump (ASHP)

Air source heat pumps extract heat from outdoor air and transfer it to the building. They can also operate in reverse, extracting heat from indoor air and transferring it outside to cool the building. Cold-climate ASHPs are designed to handle lower temperatures without needing backup heating.


Comparison of Geothermal Heating Systems and ASHP

When choosing between a geothermal heating system and an ASHP, consider the following factors:


Geothermal systems are more efficient in colder climates, while air source heat pumps perform better in milder climates. Cold-climate ASHPs can handle lower temperatures, but their efficiency decreases as temperatures drop.


Available Space
Geothermal systems require more installation space, especially ground loop systems. If space is limited, borehole or lake loop systems might be more suitable. ASHPs require less space and can be installed on the side of a building.


Installation Cost
Geothermal systems usually have higher upfront costs due to the installation of ground loops or boreholes. However, their operating costs are lower and can result in significant savings over time. ASHPs have lower installation costs, but operating costs might be higher, especially in cold climates.


Energy Efficiency
Geothermal systems are generally more energy-efficient than air source heat pump systems, particularly in cold climates. They can save up to 70% of heating costs compared to oil or natural gas systems. ASHPs can also save up to 60% of energy costs, but their efficiency decreases as outdoor temperatures drop.


heat pump installation

Renovation vs. New Build – ASHP or Geothermal Heating System?

Geothermal systems are easier to integrate into new constructions, as ground loops or boreholes can be installed during the construction phase. Installing a geothermal system in an existing home might require extensive renovations and higher costs. ASHPs can be more easily retrofitted into existing homes without major renovations, and ductless mini-split systems offer a cost-effective way to add heating and cooling to old homes.


Grants and Tax Incentives for Geothermal and Heat Pumps

Both geothermal systems and ASHPs may qualify for grants and tax incentives in Canada and the United States, helping offset the initial installation costs. In Canada, homeowners can access grants through programs like the Canada Greener Homes Grant, offering up to $5,000 for energy-efficient renovations, including geothermal systems and ASHPs. Provincial benefits can raise the cost of pumps to $17,000 and geothermal systems to $56,250 (for a 75,000 Btu unit). In the United States, geothermal systems are eligible for federal tax credits, covering 26% of installation costs until 2022, reducing to 22% by 2023. ASHPs may also qualify for federal tax credits and state and local incentives, depending on location – it’s advised to check with local authorities for the latest funding information.


Logic-based Winner between Geothermal and ASHP?

To choose between a geothermal heating system and an ASHP for your home, consider these points:


Evaluate the climate in your area. Geothermal systems might be more effective in colder climates.

Assess available installation space. If space is limited, consider borehole or lake loop geothermal systems or ASHPs.

Compare installation and operating costs of both systems. Geothermal systems have higher upfront costs but lower operating costs, while ASHPs have lower installation costs but might have higher operating costs in colder climates.

Consider potential energy efficiency and heating cost savings. Geothermal systems usually offer more significant savings, especially in cold climates.

Determine if you’re renovating an existing home or building a new one. Geothermal systems are easier to integrate into new builds, while ASHPs can be more easily retrofitted into existing homes.

Research available grants and tax incentives in your area to help offset installation costs.

So, Is Geothermal Better than ASHP?

In conclusion, choosing between a geothermal heating system and an air source heat pump depends on several factors, such as climate, available space, installation and operating costs, energy efficiency, and whether you’re renovating an existing home or building a new one. By carefully considering these factors and following the logic flow outlined above, you can make the best decision for your specific situation and enjoy the benefits of energy-efficient heating and cooling systems. Remember to explore available grants and tax incentives to make your choice more cost-effective, saving significant funds and helping reduce the burden and carbon footprint. We also want to emphasize that the best return on investment for home renovation and upgrades often comes from the simplest and cheapest improvements, paying attention to details such as choosing the best sealing materials, ensuring good airtightness of the house, installing heat recovery or energy recovery ventilation systems (HRVs or ERVs), and ensuring proper insulation of attics and walls. Explore which home improvement measures can achieve the most significant improvements and energy savings at the lowest cost.


Now that you have learned more about geothermal heating vs. air source heat pumps and how to decide which one is best, explore our Green Building Guide and the linked pages for more information on efficient home heating systems in eco-friendly and sustainable home construction:


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