Geothermal heating and cooling takes advantage of the natural stable warmth stored in the earth. Normally the earth temperature is around 55 degrees F (13 degrees C) at depths of 10 ft. In climates warmer than 55 degrees F (13 degrees C), this can be used to air condition a building, and in colder climates (those under 55 degrees F or (13 degrees C) it can be used for heating. This is accomplished by one of a number of methods. A geothermal heat pump uses the extracted water or transfer fluid (such as water mixed with antifreeze) as a heat source in winter and a heat sink in summer. Some geothermal heat pumps provide heating and cooling via forced air distribution, and others through the heating and/or chilling of water for radiant type systems. Some systems are used for heating domestic hot water. Geothermal heating and cooling systems use the natural constant ambient temperature of the earth to heat in the winter and cool in the summer.

This is accomplished with a compressor or heat pump unit, the liquid heat exchanger medium, and the air delivery system. Quite simply, geothermal systems in heating take heat from the earth, transfer that heat to a refrigerant, then distribute the heat into the structure with a forced-air or hydronic system. In air conditioning, geothermal systems take heat from the structure, transfer the heat to the refrigerant, then transfer the heat back to the water or loop fluid. This works the same as a standard air conditioner, except a geothermal system uses water or loop fluid at a constant temperature (average 50 degrees) instead of varying outdoor temperature. In other words, it's like heating and cooling your home when it's 50 degrees outside all year!