Have you heard of geothermal heating, but don’t understand how it works? Unlike a furnace, which generates heat by burning fuel, a geothermal heat pump simply moves heat between your home and the ground.
Talk to a Geothermal ExpertLet’s take a closer look at how a geothermal system works and what happens during both the heating and cooling cycles.
During the winter, a geothermal system extracts heat from the ground to warm your home. A mixture of water and antifreeze circulates through the buried ground loop, where it absorbs the earth’s stable underground heat, typically around 2°C to 8°C.
The warmed fluid then flows back to the indoor geothermal unit, where the heat is transferred to the refrigerant. The system raises the temperature and distributes heat throughout your home via ductwork or a radiant floor heating system.
The key point here is that the system isn’t generating heat by burning anything. It collects heat already in the soil and concentrates it for use in your home. That’s why geothermal heating uses so much less energy than a furnace: it moves heat rather than creates it.
But what happens when outdoor temperatures drop to -30°C? Unlike an air-source heat pump, a geothermal system doesn’t rely on the outside air for heat. Instead, it draws heat from the ground, where temperatures remain relatively stable below the frost line. As a result, it continues to provide reliable, efficient heating even during the coldest Canadian winters.
During the summer, the process works in reverse. Instead of collecting heat from the ground, the geothermal system removes it from your home and transfers it underground. Because the ground remains much cooler than the outdoor air, it acts as a natural heat sink, allowing the system to cool your home efficiently even on the hottest days.The key to this process is the reversing valve inside the heat pump. It changes the direction of the refrigerant flow, allowing the same system to switch between heating in winter and cooling in summer without any additional equipment.
In cooling mode, the heat removed from your home isn’t wasted — it is transferred into the ground through the buried loop.
The ground loop is the underground piping system that connects your geothermal heat pump to the earth. 
Although outdoor temperatures in Canada can vary from -30°C in winter to over 30°C in summer, the temperature below the frost line stays relatively stable throughout the year. In most parts of Ontario, the ground remains at approximately 2°C to 8°C. This stable underground temperature is what makes geothermal systems so efficient.
There are several types of loops:
All three configurations are closed-loop systems, meaning the heat-transfer fluid stays sealed inside the pipes and never comes into contact with the surrounding soil or groundwater. There is also an open-loop system that uses groundwater directly as the heat-transfer medium. While open-loop systems can be highly efficient, they require suitable water quality, reliable flow rates, and approval based on local regulations.
The ground loop delivers heat energy to the indoor heat pump unit, which concentrates it and delivers it to your living space. But how does a geothermal system work?
Step 1. Fluid returns from the ground loop
The fluid travelling through the ground loop returns to your home carrying the heat it collected from the earth
Step 2. Heat transfers to the refrigerant
Inside the geothermal unit, the warm fluid passes through a heat exchanger called the evaporator. Here, the heat moves into the refrigerant, causing it to boil and change from a liquid into a gas. The ground-loop fluid then heads back outside to collect more heat from the earth.
Step 3. The compressor raises the temperature
The refrigerant gas then enters the compressor, which compresses it and raises its temperature. This is the part of the process that uses electricity, but the system is not creating heat from nothing—it is simply increasing the temperature of heat that was already collected from the ground.
Step 4. Heat is delivered to your home
The hot refrigerant travels through another heat exchanger, where it releases its heat into your home. Depending on your setup, this heat can warm the air moving through your vents or heat water used for radiant floor systems.After releasing its heat, the refrigerant cools back into a liquid. It passes through an expansion valve, which lowers its temperature and prepares it to absorb more heat from the ground. Then the whole process starts again.
Professional heat pump installation ensures efficient heating and cooling for your home, improving comfort and energy savings year-round.
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Everything you need to know about geothermal heating and cooling in Canada — costs, incentives, installation, and whether it makes sense for your home.
