air source heat pumps vs geothermal heat pumps

Air source heat pumps vs. geothermal heat pumps

Did you know that you can both heat your home in the dead of winter and cool things down during the hottest day of the summer using the same system? Heat pumps are a highly efficient technology that serves the dual purpose of both heating and cooling spaces. But like other types of thermal technology, there are a variety of heat pumps to consider, and some may be better suited for you depending on your property, preferences, and heating and cooling needs. In this article, we’ll discuss the major differences between the two major types of heat pumps: air source heat pumps and ground source/geothermal heat pumps.

What is a heat pump?

Heat pumps are a technology you can use to both heat and cool your home. These technologies run on electricity, but take advantage of naturally occurring temperature differences to transfer heat into or out of buildings. Heat pumps have higher efficiencies than traditional heating and cooling systems because they transfer natural heat energy from one place to another, rather than generating it from scratch.

The two primary types of heat pumps are ground source, or geothermal, heat pumps (GSHPs) and air source heat pumps (ASHPs). What sets them apart is where they source their heat from: GSHPs transfer heat from the ground, while ASHPs transfer heat from the air. 

Comparing air source heat pumps to geothermal heat pumps

Both ASHPs and GSHPs are efficient and clean technologies, but there are a few factors to consider when deciding between using one or the other:

TechnologyAir source heat pumpGround source heat pump
CostLess expensiveMore expensive
EfficiencyLess efficientMore efficient
Space requirementsLess space requiredMore space required

We’ll dive deeper into these differences below.

Upfront cost

In most cases, you’ll spend more money upfront installing a GSHP than an ASHP. This is largely due to the additional outdoor components required and the installation itself: for GSHPs, contractors need to dig into your property to install a ground loop. This process involves bringing heavy machinery onto your property for digging a trench and installing piping. Air source heat pump installations are less labor-intensive and therefore require less time. Most people installing a ground source heat pump can expect to pay between $10,000 and $30,000 dollars for the system; air source heat pumps, on the other hand, cost between $3,500 to $5,000 per indoor head for ductless systems and between $12,000 to $20,000 for central, ducted systems. You can learn more about the differences between ductless and ducted air source heat pumps here.


Efficiency is what classifies heat pumps as a “clean technology” – in comparison to traditional heating and cooling systems, heat pumps use less energy to heat the same amount of space. That said, in the comparison between ASHPs and GSHPs, geothermal wins on efficiency: air source heat pumps generally have heating efficiencies around 300 percent, meaning every 100 kilowatts of electricity consumed produces roughly 300 kW of thermal energy. Geothermal heat pumps, on the other hand, can reach efficiencies as high as 600 percent. As this relates to your own utility bills, you’ll pay more for electricity when using ASHPs to heat your home than you would pay to heat the same space with GSHPs.


If you install either ASHPs or GSHPs, you’re likely eligible for a number of tax credits or rebates that can help decrease your upfront costs. Incentives can vary depending on your area: your local government or utility company may offer their own incentives, unique to their residents and/or customers. 

Between the two technologies, you’re likely to claim higher incentive benefits with a GSHP installation. This is because homeowners who install geothermal heat pumps that meet ENERGY STAR requirements are eligible for the Residential Renewable Energy Tax Credit, the same incentive available for homeowners installing a solar panel system. If you install a system in 2020, you can claim 26 percent of your geothermal installation costs as a credit towards your federal tax liability. There is no limit to this credit, and for applicable GSHP technologies, this means thousands of dollars in savings. ASHP installations, however, are not eligible for this incentive, but may be eligible for other energy efficiency incentive programs in your town or state.

If you’d like to learn about what incentives are available for heat pump investments in your area, the Database of State Incentives for Renewables and Efficiency (DSIRE) is a great place to start.


Most GSHPs have a longer lifespan than ASHPs. This is because the main components of the system are located underground or inside your home, protected from the weather and other outdoor disturbances. Air source heat pumps, on the other hand, are more exposed and therefore degrade at a quicker rate.

Many ASHPs last for up to 15 years; with GSHPs, indoor units last 12 to 25 years, while the ground loop located underground can last for more than 50 years.

Space requirements

GSHP installations require more space than ASHP installations. This is because GSHPs have additional outdoor components, and you need to dig into your land to install the ground loop components. The installation might require some alterations to the landscape on your property. In comparison, every component of an air source heat pump is above ground, and fits right alongside your building. The installation process and space requirements often make air source heat pumps a more suitable heating and cooling solution for city properties without yard space. 

Which is the right solution for you?

You can save money on your long-term heating and cooling costs by transitioning to either ASHPs or GSHPs, but the right solution for you depends on your property, budget and preferences.

In general, ASHPs are a bit more popular because of their lower upfront cost and minimal space requirements. The installation process for ASHPs is also simpler and less time-intensive than that for GSHP.  Additionally, if you’re worried about alterations to your yard or landscape, you can avoid excavation and trenching by opting for ASHPs over GSHPs. However, GSHPs are more efficient, so you’ll spend less money to operate a GSHP over time than you would an ASHP. If you have the budget to spend a bit more for a GSHP, you can end up saving more money long-term through electricity bill savings. 

Because heat pump solutions are unique to each property, we recommend talking to certified contractors about your options before making a decision. After evaluating your property, energy needs, and current heating system, they’ll be able to advise on the most suitable technology for you.

Power heat pumps with solar energy

If you’re considering installing heat pumps, you can save even more money by pairing them with a solar panel system. Sign up on the EnergySage Solar Marketplace to receive up to seven custom solar quotes to compare. You can add a note in your account to let solar installers know that you’d like to use solar electricity to power a future heat pump system so that they can size and design your solar panel system to meet these needs.

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About Kerry Thoubboron

Kerry is an expert in all things solar! She's worked in the industry for more than 6 years, starting her career as an Energy Advisor dedicated to helping customers compare their options and make well-informed solar decisions. She graduated from Boston University with a degree in Environmental Analysis and Policy. Outside of work, you can find Kerry snowboarding, watching The Office, or having passionate debates about which New England state is best (spoiler: it's Vermont).

4 thoughts on “Air source heat pumps vs. geothermal heat pumps

  1. bradley brooks

    I think your estimates for a ground source heat pump cost are low. While I realize it depends on differing parts of the country and I live in a high-cost area – Long Island NY, I have heard of the costs being between $50-$60,000 (before incentives) for a system in our area.

    I found this to be true of an article previously about residential solar with your estimates being about 25% below what I got quoted in our area.

  2. Lee vormelker

    I am in the process of buying a new home in old saybrook, ct. The home is 28 years old and it is using an oil boiler for heat and a central ac for cooling. The systems are 28 years old and are near end of life. I am researching upgrading to a high efficiency heat pump. The choices is air sources or geotherman. considering the installation cost premium of geothermal how do you choose? The existing ductwork would be reused. Regards. Lee. Bsee mba, cem

    1. Landis Rogers

      Normally GSHP is a low velocity high volume systems. This is because of the lower temperature of the source heat. This means the existing duct work will be undersized for switch to a GSHP. This can be corrected by adding additional supplies and returns to the existing system. I don’t know about ASHP as when I install my GSHP, ASHP wouldn’t work in cold climates.

  3. James Talley

    Thank you for a most informative article. It was also very well written and easy to understand the differing technologies.


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