Geothermal Heating and Cooling

What is Geothermal Heating and Cooling?​

Geothermal systems provide heating and cooling by exchanging heat with the ground through a system of fluid filled underground pipes. The ground temperature remains relatively constant throughout the year at around 55ᵒF, which allows geothermal systems to both heat and cool buildings by pulling heat from the ground for heating during the winter and removing heat from indoor spaces and storing it in the ground for cooling during the summer. Above ground, geothermal heat pumps that are connected to the underground pipes help transfer heat between the fluid in the pipes and the air. In most cases, these heat pumps are connected to conventional ductwork to distribute heated or cooled air within the building. Learn more about the types of geothermal heat pump systems.

Image courtesy of U.S. EPA
Image courtesy of U.S. EPA

​Benefits of Geothermal Heating and Cooling​

Since a geothermal system is moving heat around instead of creating heat, geothermal systems are much more efficient than other heating and cooling options, reaching efficiencies of 300% to 400%. In other words, for each unit of energy the system uses, it produces three to four units of heating or cooling. This is compared to traditional options (e.g., furnaces) that have maximum efficiencies of around 96%, using more energy than the amount of heating or cooling they provide. As a result, geothermal systems use much less energy than other heating and cooling options, reducing energy costs while improving comfort. 

The increased efficiency of geothermal systems results in the use of less energy to heat and cool a space, meaning that geothermal systems have some of the quickest payback periods. Additionally, most geothermal system life spans are estimated around 24+ years for the geothermal heat pump and 50+ years for the ground loop. Given that a geothermal system acts as both a heating and cooling system, and the average system life for both a furnace and an air conditioner is 15-20 years, geothermal systems last longer and save money on replacement costs over the lifetime of the system. This is in addition to the energy savings achieved from the increased efficiency of the system compared to traditional systems.  ​​

Because geothermal systems use the ground to provide heating and cooling, they use 25% to 50% less electricity than other systems, greatly reducing greenhouse gas emissions. Geothermal systems further reduce greenhouse gas emissions and create more healthy spaces because they eliminate the need for fossil gas heating, which is a major source of greenhouse gas emissions in Ann Arbor, and is known to generate air pollutants in indoor spaces that cause health issues such as asthma, allergies, and learning deficits. While geothermal systems do require a small amount of electricity to operate, as the electric grid becomes cleaner with more renewables, geothermal systems have the potential to provide heating and cooling with zero emissions. 

Geothermal heat pumps hold a consistent temperature and can maintain consistent indoor humidity levels, resulting in comfortable indoor environments. The system is also very quiet and produces no indoor air pollution. ​

What is District Geothermal?

While geothermal systems can be designed to serve an individual household or building, they can also be designed to serve multiple households or buildings through a system called district geothermal.

As with individual geothermal systems, district geothermal can provide heating and cooling by exchanging heat with the ground through a system of fluid filled underground pipes. However, in the case of district geothermal, the system of underground piping is much larger and connected to multiple households or buildings to meet their heating and cooling demands. Each home or building in the system has its own geothermal heat pump that connects to the underground geothermal loop, allowing it to transfer heat between the home or building and the overall system. As each building has different heating/cooling needs, the heat is transferred and shared between them depending on each building's unique circumstance, meaning energy is never wasted. Any excess heat is simply stored in the ground until it is needed.​​

Image ​​courtesy of HEET​

Benefits of District Geothermal

​As with individual geothermal systems, district geothermal is a much more efficient heating and cooling system than other systems, meaning lower energy bills for everyone served by the system and less greenhouse gas emissions. Additionally, because this system is all electric, it helps eliminate the need for fossil gas heating systems, further reducing greenhouse gas emissions as well as reducing air pollutants in our indoor spaces that cause health issues. In addition to the general benefits of geothermal heating and cooling, district geothermal also sees the following benefits: ​

Since the underground loop is already installed and shared by all, each user – be it a business, a home, or a government building – on the system only has to account for the equipment in their home or building and their portion of the shared system. This significantly lowers the upfront cost of accessing geothermal!

With a more diverse system, it is easier to balance the temperature as different parts of the system need and produce heat at different times and in different amounts. The system can share the heat between buildings, with some systems reaching efficiency levels over 500%. This means that district geothermal can produce five or more units of heating and cooling for each unit of energy the system uses! The more diverse the system, the less likely all the heating or cooling peak demands will occur at the same time, resulting in a more efficient system.​

District geothermal provides an opportunity to create and maintain local, good-paying jobs in the energy industry. Since district geothermal is essentially a network of pipes connecting to homes and buildings, the system is similar to existing fossil gas infrastructure, meaning the skillset required is already present in our workforce with an opportunity to continue growing. And since the system requires physical infrastructure in the community, the jobs are inherently local. As we work to transition to carbon-free heating and cooling options, district geothermal provides an opportunity for existing companies and workers to transition their business model and bring in highroad jobs to the community while we all work to achieve a just transition to community-wide carbon neutrality by 2030. Learn more about ​how geothermal can help increase the number of ​high-paying union jobs in Ann Arbor​.​  ​ ​

Geothermal in Ann Arbor

Freehand sketch by Priyanshi Soni, Image Courtesy of IMEG

The City of Ann Arbor is actively considering the viability of district geothermal in our community. In 2023, Ann Arbor was awarded funding to design a district geothermal loop around the Bryant Elementary School, including the 262 homes in the neighborhood and the Bryant Community Center, and conduct test boring ​to test the feasibility of the design. Using this funding, OSI worked closely with its partners and members of the community to create a feasible design, with initial results showing great promise. In December 2024, OSI was awarded $10 million to install the system. 

The City is also looking for other areas in the community that could be a good fit for district geothermal. In 2024, OSI began working with Stantec to assess the feasibility of district geothermal across Ann Arbor. Using the results, OSI and Stantec will select up to three areas to do a more in-depth feasibility study. Learn more about the work OSI is doing with Stantec to study the feasibility of district geothermal in Ann Arbor from a recording of the Ann Arbor Energy Commission's Aug. 2024 meeting below. ​

Additionally, both Ann Arbor's Sustainable Energy Utility (SEU) and our heating franchise specifically focus on geothermal as a solution for our community.  

Updates on the City's district geothermal work will be posted on this page and in the Office of Sustainability and Innovations Newsletter.​

District Geothermal in Other Communities

Additional Resources

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