Geothermal heat pump
Geothermal Heat Pump Cost Calculator
Installed-cost estimate for ground-source heat pumps by tonnage, loop type (vertical/horizontal/pond/open), ductwork, and state. 25D credit expired after 2025-12-31; state programs still apply where eligible.
Quick answer: 3-ton vertical-bore system installs for $25,000–$40,000 in 2026. Operating cost 50%+ lower than air-source heat pump. 25+ year equipment lifespan. The 30% federal 25D credit expired 2025-12-31; only state programs and operating savings carry the economics now.
25D credit terminated by OBBBA for property placed in service after 2025-12-31.
Installed cost · 3 ton · vertical loop · New York
$17,900
range $13,868 – $26,328 gross
Net after federal 25D credit (0%)
$17,900
Range $13,868 – $26,328 · 25D expired after 2025-12-31 — only state programs apply
Cost breakdown
- System install (vertical loop, fully loaded)$18,360
- Duct reuse credit-$2,500
- Permit + design engineering$2,040
- Industry consolidates indoor unit + loop into a single per-ton installed figure: $3,500–$5,500/ton typical (HomeGuide 2026), up to $11,700/ton premium.
Why geothermal
Geothermal uses the constant 50–55°F earth temperature as its heat source/sink. COP of 4.0–5.5 (vs 2.5–3.5 for air-source), so 50%+ lower operating cost. Equipment lifespan 25+ years (vs 15 for air-source). The federal 25D credit (30%) was terminated by OBBBA after 2025-12-31. The trade-off is upfront cost and yard disruption.
New to geothermal?
A geothermal heat pump uses the constant 50–55°F earth temperature (a few feet below grade) as its heat source in winter and heat sink in summer. A closed-loop polyethylene pipe filled with food-grade propylene glycol circulates through the ground, exchanging heat with the soil. COP of 4.0–5.5 means 50%+ lower operating cost than air-source. Equipment lasts 25+ years. The catch: upfront cost is high because of drilling/trenching ($1,200–$2,200 per ton just for the loop on vertical-bore installs). The federal 25D credit (30%) was terminated by OBBBA after 2025-12-31.
Read the full guide → 12-min read · loop type decision · sizing · 25D credit · brands · drilling reality · vs air-source
Frequently asked questions
How much does geothermal heat pump cost installed in 2026?
A 3-ton vertical-bore geothermal system installs for $25,000–$40,000 gross. The federal 25D credit (30%) was terminated by OBBBA for property placed in service after 2025-12-31, so 2026 installs see no federal credit — state programs and the lower long-term operating cost (50%+ less than air-source) carry the economics. Horizontal-loop installs (if you have ~1 acre) drop $5,000–$10,000 off.
Did geothermal qualify for the federal tax credit before 2026?
Yes — historically. Section 25D (Residential Clean Energy Credit) covered "qualified geothermal heat pump property" at 30% of cost with no cap through 2025-12-31. OBBBA (signed July 2025) terminated 25D for property placed in service after that date. This calculator does not subtract a federal credit for 2026 installs; if your system was placed in service in 2025 you may still qualify on your 2025 return. Source: https://www.irs.gov/credits-deductions/residential-clean-energy-credit.
Vertical, horizontal, pond, or open loop?
Vertical (~$20-30/ft drilled, 150-400 ft per ton): most common, suits any yard size, no trenching disruption. Horizontal (~$1,000-1,800/ton): cheapest if you have ~1 acre of yard to trench at 4-6 ft depth. Pond/lake ($800-1,500/ton): least expensive when you have water ≥8 ft deep year-round. Open-loop (well discharge): increasingly restricted; risks fouling; check state regulations.
How much does geothermal save on bills?
Geothermal heat pumps have COP of 4.0-5.5 (compared to 2.5-3.5 for air-source heat pumps and ~0.95 for gas furnaces). For a 2,000 sqft cold-climate home, expect $800-1,500/year operating cost vs $2,500-3,500 for gas. Without the (expired) 25D federal credit, simple payback typically lands 13-18 years on a gross install.
How long does a geothermal system last?
The ground loop has 50+ year design life (polyethylene pipe with heat-fused joints). Indoor heat-pump unit lifespan is 25+ years (vs 15 for air-source) because it sees no weather exposure. Pumps and circulators need replacement every 10-15 years (~$500–$1,500). Total system cost of ownership over 25 years usually beats air-source despite higher upfront.