Geothermal heat pumps, or geoexchange systems, are the most common form of geothermal energy used in homes and commercial buildings. Heat is removed from a substrate during the winter to heat a building and then during the summer the heat is removed from the building and put back into the substrate. The substrate is usually the earth but can also be water.

Open loop systems require the drilling of one to two wells. One well is used to draw water and the second would be used as a recharge well if surface disposal is not allowed. Water is pumped out of the supply well and into a heat exchanger where heat is either removed from or added to the water depending on the season. The water goes into the recharge well or is disposed of on the surface. Once the liquid passes through the heat exchanger, heat or cold is then distributed through the building.

Open loop systems are limited to areas where there is adequate ground water supply and where allowed for by local codes and regulations for ground water use.