The word “geothermal” comes from the Greek words geo (earth) and therme (heat); thus it refers to heat from the earth. It is the use of the natural temperatures contained in the earth or water to heat and cool buildings. Geothermal energy is broken down into three types: direct-use for heating; direct use for electricity generation; and indirect use by heat pumps (also known as geoexchange systems or ground source heat pumps).

Most direct-use geothermal relies on elevated temperature ground water to either heat buildings directly or to generate electricity. Direct-use geothermal heating is limited to areas that have naturally occurring hot springs or easy access to elevated temperature ground water in the 100 – 250 oF range. This water is good for use in spas, greenhouses, or building heating systems. Historically, direct use for electrical generation required water temperatures above 300oF, although technology has now made it possible to generate electricity with water temperatures lower than 300°F.

Geoexchange systems or geothermal heat pumps use the ambient temperature in the earth or water to heat or cool a building. These systems use heat exchangers to either pull out heat from or release heat into the substrate. For example, the ground normally stays at about 55oF year round. That heat from the ground is removed to heat the air in a house in the winter; in the summer, the heat is extracted from the air in a home and returned to the earth.

Geoexchange can save between 25 and 50% in energy consumption when compared to conventional heating and cooling systems. They also have comparable life-cycle costs and low annual operating costs.