Is Geothermal Expensive? – The Costs Of Geothermal Energy


This article is your complete guide to answering the question, “Is Geothermal Expensive?” If you have ever considered geothermal energy for your home, you might be wondering about the overall costs of investing in a system. Geothermal energy does have a higher price tag upfront but offers long-term benefits and savings. High-end geothermal energy systems can cost upwards of $45,000 for larger homes, but sometimes as low as $15,000 for smaller homes with less energy needs.

It’s important to remember that the total geothermal heating cost depends on factors such as home size, location, soil conditions, available land, local climate, existing ductwork, and the chosen heat pump. That’s why our guide is going to cover the costs of geothermal energy and everything you need to know when pricing one out!

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Is Geothermal Energy Expensive?

There are a few parts to this question, as there are many components that go into the costs of a geothermal system. First off, yes, installing a geothermal system in your home will be expensive. Even the cheapest of geothermal systems, with government incentives, will still cost you a few thousand dollars to install. The average lower-cost geothermal system is priced at around $17,000, with the actual average of all geothermal system installations costing around $25,000. High-end geothermal systems on larger homes could potentially cost a homeowner upward of $80,000. 

If you’re like me, those higher costs could drive you away from the installation of geothermal energy. With that being said, the long-term benefits of a geothermal system will save you money over time on your electric bill. That’s why we want to explain all of the costs and benefits involved with geothermal energy so you can decide what is best for your home. 

How much does geothermal installation cost?

The cost of geothermal system installation for homeowners typically falls within the range of $8,000 to $25,000 on average. However, it’s important to consider various factors that can influence the final cost, such as the size of the geothermal system, the type of loop system, and the specific heat pump chosen. Additionally, local geology, property accessibility, and the choice of installation company can also impact the overall cost of the geothermal system installation. It is recommended to assess these factors and obtain personalized quotes from reputable installers to get a more accurate estimate for your specific circumstances.

Specifically, the different types of systems can change the price significantly for your geothermal energy system. 

  • Horizontal loop system: $15,000 to $30,000
  • Vertical loop system: $25,000 to $40,000
  • Open loop system: $10,000 to $30,000
  • Closed loop system: $25,000 and $30,000

For the installation of a geothermal heating system, you also have to consider the renovations needed in your home to accommodate it. Such as, the ductwork in your home might require rerouting, repairing, or building brand new which could add on up to $5000 in costs. 

How much will a geothermal system cost to operate?

One of the best parts of the costs of geothermal systems is that once they’re installed, you start to see those benefits. Installing a geothermal system typically results in significant savings on heating fuel bills for homeowners, while moderately increasing their electrical bills. This trade-off leads to an overall reduction in monthly energy expenses. The extent of the savings will depend on factors such as the type of fuel used by your previous furnace and your specific heating requirements. In many cases, these accumulated savings can amount to thousands of dollars over the lifespan of your geothermal system, making it a cost-effective and financially beneficial investment.

What is the geothermal heating cost per month?

The operational cost of a properly sized geothermal heating system typically ranges from $100 to $200 per month in electricity expenses. It’s important to note that during extreme temperatures when backup heaters are required to supplement the geothermal system, the average electric bill may increase. Additionally, in cases where geothermal lines freeze, there may be added costs associated with running backup heating systems. These backup heaters can be up to twice as expensive to operate compared to the geothermal system alone. It’s advisable to ensure proper system sizing and maintenance to maximize energy efficiency and minimize potential additional costs.

How much does geothermal energy cost per year?

Geothermal power plants, when running at 90% availability, spend around one to three cents per kilowatt-hour. Even newer power plants that charge a bit higher still only cost around $0.05 per kWh. Experts state that with a geothermal system, you can expect a 30% to 70% reduction in your annual utility bill for heating, and 20% to 50% for cooling. Moreover, a geothermal pump with a desuperheater system can reduce water heating costs by 50%. Thus, while the per kWh cost might be slightly higher for geothermal energy, the overall savings in utility bills make it a more cost-effective choice in the long run.

Related post: How Does Geothermal Energy Work?

What Affects the Cost of Geothermal Energy?


 Many factors would affect the cost of geothermal energy such as the location, availability of resources, the type and size of the geothermal system, operation and maintenance costs, and even government incentives! The geographical location you’re in plays a big role in determining the cost of geothermal energy. If you’re lucky to be in an area with easily accessible geothermal resources, the costs tend to be lower compared to places where resources are scarce or harder to reach. The depth of the geothermal resources also affects the cost, as digging deeper requires more expensive drilling and infrastructure.

When it comes to the type and size of the geothermal system you install, that can impact the cost too. Generally, larger and more complex systems are pricier. The installation costs can vary quite a bit, covering things like drilling, system setup, and any modifications needed for your home.

Don’t forget about the ongoing operating and maintenance costs. These factors add up and contribute to the overall cost of geothermal energy. Luckily, there are government incentives and policies in place that can help offset some of these expenses.

Lastly, broader economic factors like labor, materials, equipment costs, and the overall state of the energy market can also influence the cost of geothermal energy. So, it’s a combination of different factors that determine how much geothermal energy will cost you each year.

Who should consider a geothermal system?

Geothermal heating and cooling can be a great choice for many homeowners, but it’s important to consider a few factors when deciding if it’s the right time to install a ground source heat pump system in your home. Let’s take a closer look:

  • Reducing Emissions: If you’re passionate about reducing your carbon footprint, geothermal systems are an excellent option. According to the Environmental Protection Agency, they provide an energy-efficient and environmentally clean solution, helping you contribute to a greener future.
  • Long-Term Investment: If you plan to stay in your current home for an extended period, a geothermal system becomes increasingly cost-effective over time. While the initial investment may seem higher, the long-term benefits and savings on energy expenses can make it a wise investment. However, if you’re planning to move shortly, it’s important to weigh the benefits against the initial investment.
  • Ideal Landscape and Retrofitting: The right location and available space for a horizontal loop system can help lower upfront costs. If your home already has existing ductwork or a hydronic system that requires minimal modification to accommodate a ground source system, it can further streamline the installation process and potentially reduce costs.

Related post: What is Green Energy?

Geothermal Energy Costs FAQ

Q: Is geothermal energy expensive to use?

A: The cost of using geothermal energy depends on several factors. While the initial investment for a geothermal system can be higher compared to other heating and cooling options, it offers long-term benefits and savings. Once installed, geothermal systems can lead to significant reductions in heating fuel bills for homeowners, although electrical bills may moderately increase. Overall, geothermal energy can result in lower monthly energy expenses, and the accumulated savings over the lifespan of the system can amount to thousands of dollars.

Q: Is geothermal energy expensive or cheap and why?

A: Geothermal energy can be considered relatively expensive upfront due to the initial installation costs. High-end geothermal systems for larger homes can range from $45,000 to $80,000, while smaller homes with lower energy needs may have systems priced as low as $15,000. However, it’s important to evaluate the long-term benefits and savings that geothermal energy offers. Despite the initial investment, geothermal systems can lead to significant reductions in heating fuel bills, making it a cost-effective choice in the long run.

Q: Why is geothermal power so expensive?

A: The cost of geothermal power is influenced by various factors. One significant factor is the geological location and accessibility of geothermal resources. Areas with easily accessible resources tend to have lower costs compared to regions where resources are less abundant or harder to reach. Additionally, the depth of geothermal resources impacts the cost, as deeper resources require more expensive drilling and infrastructure. The type and size of the geothermal system installed can also affect the cost, with larger and more complex systems generally being more expensive. Other factors include installation costs, ongoing operating and maintenance expenses, government incentives, and broader economic factors such as labor and materials costs.

Q: What is cheaper: solar or geothermal?

A: Both solar and geothermal energy systems have upfront costs associated with installation. Solar panels can be a more accessible option for many homeowners, with costs varying based on system size and quality. Geothermal systems, on the other hand, typically have higher upfront costs due to drilling and infrastructure requirements. However, geothermal systems can offer more consistent energy production and may result in greater long-term savings on heating and cooling expenses. Ultimately, the cost-effectiveness of each option will depend on individual circumstances and local factors.

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We hope you found this article helpful! If you are looking for ways to increase energy efficiency and sustainability in your home be sure to take a look at all of the latest renewable energy options in your area. The Energy Professor helps residential and small business owners find qualified energy suppliers in New YorkNew JerseyPennsylvania, Texas, Ohio, Maryland, Illinois, and Massachusetts

Nik Chapman

Nik Chapman is the Executive Editor of The Energy Professor with lifelong passion for studying and exploring the natural environment. Nik has a Bachelor of Science in Environmental Sciences and Biology and has specialized in work with Green Energy, Renewable Energy and Environmental Justice. Nik has worked directly with small communities and nonprofits to help make environmental education more accessible for everyone. Nik currently lives in Washington State and enjoys tide pooling on the Oregon Coast and taking hikes to local waterfalls!