A Geothermal heat pump is efficient because it uses the earth as a heat source in winter and as a sink for exhaust heat in summer. Since a condenser fan is not needed, the entire system (in a soundproof cabinet) is in your utility room or basement. Since it is indoors, there is little maintenance and risk of damage.

A closed-loop geothermal heat pump system circulates a water/antifreeze solution in a small plastic pipe buried in the ground. This long pipe can be laid horizontally in a very narrow, several feet-deep trench. Another closed-loop system uses a long vertical pipe in a hole drilled in the ground. An open loop system can use water from ponds or wells.