Starting at depths of between 6 and 10 metres, the temperature of the earth is no longer influenced by variations in surface temperature, and stays relatively constant at around 8 to 10 C. So the underlying principle of geothermal heating and cooling is to use that consistent interior earth temperature to balance our wildly varying Canadian surface temperatures.
With the use of heat pumps, geothermal heating and cooling systems extract heat energy and transfer it into buildings, saving you approximately 50 to 60% on heating and cooling costs, depending on the fuel to which you are comparing.
In summer months, geothermal cooling functions in a similar way to standard air conditioning, only heat is not simply ejected into the outside air, but rather deposited deep in the ground for future use. The result is guilt-free air conditioning because you are actually using the heat extracted in summer months to warm the earth deep below, heat which will increase the efficiency of your system in winter months.
Geothermal home heating systems:
Vertical closed-loop systems have a sealed U-shaped pipe of high density polyethylene that carries a heat transfer fluid (usually a water / methanol mix) in a continuously circulating loop allowing an exchange of heat by conduction. As the liquid returns to the surface, either heated or cooled depending on the season, the additional or reduced amount of heat in the water is used to condition your home. The required depth for this system is generally 300 feet or more, and you pay for it by the foot. Through the nose, but by the foot.
Horizontal closed-loop systems function in the same manner as vertical systems, except that pipes are run back and forth 6 to 10 feet underground. Installation involves excavating trenches (at least 300 feet of them), rather than digging a well.
Horizontal systems can be cheaper to install but require a significant amount of space, and it does some pretty intense damage to any ecosystems that lay in its intended path. For a given length of pipe, horizontal loop systems are a bit less efficient than vertical loop systems, as they can be more easily affected by surface temperatures.
Open-loop systems use ground water pumped directly from a supply well (75 to 100 feet deep) in order to draw and inject heat. Water is pumped out of the first well, and after the heat exchange is carried out, it gets injected into the second well.
Open-loop systems have a very high thermal efficiency and installation can be up to 50% less expensive than vertical closed loop systems. However, conditions necessary for the proper function of these systems are rarely found in urban areas, as they require an abundant source of ground water.
Is geothermal heating cost effective?
That truly depends on the size of a project. No geothermal system is cheap to install, and because it offers only a reduction in consumption, the return on investment is really only viable for larger buildings. For this reason geothermal is more suited to commercial or multi-unit residential projects of substantial size.
A home would have to be quite large, and somewhat poorly-insulated to actually make it pay for itself in a reasonable time frame. In many cases, particularly with moderately-sized new homes being built, that large of a financial investment towards energy efficiency could offer much greater returns if put towards heat retention instead - better windows, additional insulation, better tapes and membranes for air sealing, etc.
Ball park pricing: A geothermal system for an averaged size home (2000 sq. ft.) would easily cost you $30,000 to have installed, and that is in exchange for a monthly saving of about 50% on your heating bill. So payback for the average single family home is simply too far away to make this a financially competitive option with all but the highest consuming homes.
That same investment of $25,000 (or perhaps less) in a better thermal envelope would likely reduce your heating bills easily by 70 or 80%, perhaps more. Geothermal energy is an excellent global technology, but for single family homes you will get far more bang for your buck if you put that money into insulation instead.