What Does a Geothermal System Cost?

Considering a geothermal heating and cooling system for your Washington home?

Be prepared to pay more than you have for a gas furnace, air conditioner, or air-source heat pump.

In return, you can expect greater comfort and lower energy costs.

At All Seasons Heating, we hope the price tag will not dissuade you from considering geothermal. This eco-friendly heating and cooling system is efficient, reliable, and long-lasting. It requires little maintenance and is eligible for federal tax credits and rebates.

Over the years, you save money on utility bills and replacement costs.

What You Will Pay for Geothermal

When pricing a geothermal system, one size does not fit all because many variables can influence the cost. What you pay for a geothermal system for your Yakima home will likely differ from what you see quoted online. Here are a few broad cost estimates as examples:

• Carrier says a geothermal heat pump and installation costs $12,000 to $45,000.
• Forbes pegs the average low cost for a geothermal system at $17,000, the average middle cost at $24,500, and the average high cost at $32,300.
• The Natural Resources Defense Council (NRDC) says geothermal systems cost $15,000 to $40,000.

If you want information about your home, consult an experienced geothermal installer like our All Seasons Heating team. We will estimate costs based on your heating and cooling needs, the size of your home and property, soil quality, the type of underground loop you need, and many other factors.

What Determines Geothermal Costs?

Installing a geothermal system takes longer than replacing your furnace, air conditioner, or heat pump with new equipment. It costs more and may not be the best system for your home if your yard is too small to accommodate a loop and drilling equipment. If the soil is too dry and sandy, it may not adequately transfer heat to the loop.

Let’s look at some factors that influence the cost of a residential geothermal heating and cooling system.

System Size

The size of your house and your heating and cooling needs help determine the size of your geothermal system. Smaller homes need smaller systems. They typically cost less than large systems that require more materials and labor.

Insulation and Weatherization

If your home is well-insulated, you can reduce the size of your system. Adequate insulation, caulking, weatherstripping, and efficient windows help lower energy consumption.

Heat Pump

The brand, model, and efficiency level of your geothermal heat pump affects the cost of your system.

Labor

Labor costs vary depending on your location and the complexity of the geothermal installation.

Loop

The loop, an arrangement of pipes filled with a mix of refrigerant, anti-freeze, and water, is the heat exchanger for your geothermal system. It absorbs heat from underground and sends it to your indoor heat pump via the refrigerant to heat your home.

While cooling your home, it expells the heat it collects from your home and sends it into the earth.

You need sufficient, unobstructed space to excavate trenches for a horizontal arrangement or drill deep holes for a vertical loop. Horizontal loops require more space but generally cost less than vertical loops. Vertical loops are more compact but require drilling equipment and extensive digging.

Soil

Heat transfers more easily between soil containing moisture and the loop. Dry, sandy soil does not efficiently transfer heat. The soil condition in your backyard can bring your geothermal project to a halt before installation begins or confine your choice to a vertical loop if better soil conditions exist deeper underground.

Rocky or dense soil, however, can increase drilling costs. 

Permits

Your county or municipality may require permits that add to the system price.

Tax Credits Reduce Geothermal Costs

As you add up the costs of drilling or excavation, labor, the heat pump and loop, and permits, remember that you will lower the total figure with a tax credit and rebates.

You can get a 30 percent tax credit on your federal income taxes for systems installed by December 31, 2032. After that, the percentage decreases to 26 percent for equipment installed by December 31, 2033. A  22 percent credit is available for units placed in service after December 31, 2033, and before January 1, 2035.

Rebates Reduce Geothermal Costs

The Inflation Reduction Act of 2022 also mandated billions of dollars for energy-efficient upgrades, including home electrification projects such as geothermal heating and cooling systems.

State energy offices apply for funding and administer their share of the federal dollars for two different rebate programs.

One program rebates 50 percent of the project cost to moderate-income households and 100 percent to low-income households, with rebates capped at $8,000. A moderate-income household earns 80 to 150 percent of the area’s median income (AMI), while the program defines low-income households as earning less than 80 percent of AMI.

The other program is open to all, regardless of income, and offers two methods for figuring savings. Under the modeled method, improvements estimated to save 20 to 35 percent are eligible for a $2,000 rebate. Those estimated to save over 35 percent are eligible for a $4,000 rebate.

The measured method considers actual energy savings achieved over the months after you complete your home improvement project. It must save at least 15 percent on energy consumption. The more you save, the bigger the rebate.

Which States Offer Rebates

As of Jan. 1, 2025, ten states and the District of Columbia have launched at least one of the rebate programs. Ten other states have approved applications and are preparing to launch. Nearly 30 states are preparing applications or have submitted them and are awaiting approval. South Dakota is the only state that has opted out of the programs.

Follow the progress of the federal rebate programs with the U.S. Department of Energy (DOE) rebate tracker.

Call Us for a Consultation Today!

Get an estimate for a geothermal system installation at your Yakima, WA home. Let our experts at All Seasons Heating recommend the best heat pump and loop arrangement for your heating and cooling needs. Call us at 509-248-6380 or request service online.