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Ground source heat pump systems (GSHPS) vs. geothermal energy: What’s the difference?

04. February 2026 | 5 min read

When it comes to heating methods, the terms geothermal and ground source are often used interchangeably. There is, however, a distinct difference between them — in both function and application.

The misconception comes from a vague understanding that both systems use underground energy to generate heat. While this is technically true, it doesn’t explain the whole story.

In this article, we’ll try to unpick this confusion by breaking down the way each system works, why they’re used for very different applications and how their approaches to sustainability differ.

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AT A GLANCE: GSHPS VS. GEOTHERMAL ENERGY

  GSHPS Geothermal energy
Depth

1-150 m

500+ m

Application areas Heating and cooling inresidential, commercial or industrial buildings

District heating, industrial process heat, power generation

Function

Heating and cooling

Just heating

What are ground source heat pump systems?

Ground source heat pumps systems are used to heat or cool buildings by harnessing renewable energy stored in the earth. They consist of pipes buried 1-150 meters below ground (depending on horizontal or vertical collector configurations) that circulate a water-glycol mixture.

At these depths, ground temperature is relatively independent from the weather and remains between 8 °C and 12 °C all year. The hydronic fluid that runs through the pipe network interacts with the thermal ground energy for either heating or cooling. 

For heating:

  1. Ground-warmed fluid travels from the pipes to a heat exchanger inside the heat pump
  2. The heat exchanger transfers the heat from the fluid to a refrigerant
  3. The refrigerant is compressed, raising its temperature
  4. The additional thermal energy created is transferred to the building’s heating system to warm the room

Ground source heat pump systems work most efficiently up to 55 °C and therefore combine well with low-temperature heating systems, such as hydronic wall and underfloor heating.

For cooling, the cycle is reversed:

  1. In a building with hydronic cooling, surfaces with embedded pipe networks remove thermal energy from the room through radiant heat transfer. Fluid circulating through the hydronic pipe network absorbs radiant heat
  2. The warmed fluid travels to a heat pump where its thermal energy is transferred to separate underground collector pipes
  3. Thermal energy in the collector pipes dissipates due to the ground’s relatively lower temperature
  4. With its thermal energy transferred, the hydronic fluid returns to the surface pipe networks, where it absorbs more heat
  5. The cycle continues until enough heat has been removed from the room

What is geothermal energy?

Geothermal energy emanates from the earth’s core. This cannot be accessed at shallow GSHPS depths; it requires extremely deep bore holes (up to 500 meters). 

Instead of using this heat to warm fluid in a closed-loop system (like GSHPS), geothermal systems simply extract groundwater that is deep enough to be warmed by the earth’s core and use it for heating operations.

Natural examples of this phenomenon can be seen in the form of hot springs. Deep fractures in the Earth’s crust allow ground water to reach core-heated depths. The heated water then rises through the cracks to form a natural pool of warm water at the surface.

Man-made geothermal systems use pumps to draw heated groundwater to the surface. But, given the cost of deep drilling, geothermal systems are extremely expensive and mainly used for large-scale infrastructure projects, such as district heating or industrial power generation.

Environmental impact and sustainability

Both GSHPS and geothermal energy are great choices for operationally low-carbon heating solutions, but they achieve this in different ways and at different scales.

Rather than generating heat, GSHPS transfer thermal energy from ground to building using electricity. This process is extremely efficient, producing a 1:4 heat output ratio (four units of heat for every unit of electricity consumed). And, as electricity grids become increasingly decarbonized, or with local renewable systems such as photovoltaic panels, GSHPS become an even more sustainable choice.

Their relatively shallow installation depth also limits geological disturbance and helps keep installation emissions comparatively low.

On the other hand, geothermal systems can provide continuous low-carbon heat at scale. However, the deep drilling required is extremely energy-intensive and can have negative impacts on local geology, wildlife and groundwater. This is why geothermal projects are typically only justified where long-term, high-volume heat demand can offset the environmental and financial costs of installation.

A matter of depth

Although different in function and application, both ground source heat pump systems and geothermal energy provide reliable, low-carbon heating that is largely independent of weather conditions.

As the transition away from fossil fuels continues, the search for dependable eco-friendly heating methods is becoming more important for homeowners, businesses and municipalities. 

Ground source heat pump systems and geothermal energy offer potential solutions to this problem but highlight the importance of selecting the right system for the scale necessary. For individual buildings, ground source heat pumps offer an efficient and widely applicable option, while geothermal energy remains a powerful alternative where long-term, large-scale heat demand justifies its installation complexity.

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