I Installed a Geo-thermal heating/air conditioning system in my house outside Brenham, Texas around 2 Years ago. There are 2 basic types of Geo-thermal systems Closed loop and open loop. Basicly the main difference between a normal heat pump air conditioning system is the lack of an outside fan to remove the heat from the freon in the summer or use the heat from the freon in the winter. In my case I have a 4 ton unit cooling the house,there are 4 holes drilled 200 feet deep (like a water well)and plastic pipe goes down each hole and back out going to the next hole ect. Instead of an outside fan to cool the freon down after compresion the coils are cooled by a water bath which in turn is circulated down the 4 holes and back to coils. The heat the water pickes up from the coils is trabsfered to thr ground and returns cooler than it went in. Using a water bath to cool the freon coils is 10 times more efficient compaired to blowing air over them. I have found that the energy usage can be as little a 50% of a normal AC/Heating system (because of the increased cooling effect of water bath the compressor required is about 1/3 smaller than a normal system & no electricity needed to run an outside fan). A lot of large buildings have used a simular system for over 20 years, its just now getting close to afordable for smaller home systems. Most closed loop systems (like my system have a small amount of alcohol (non toxic) in the water to keed the water from freezing in winter. The (Loop) can be like mine (in well holes), horizontal (burried 4 feet in ground and long runs of 200 feet per ton of cooling), or use a body of water to cool (or heat) the water in the plastic pipe. Last but not least there is tee open loop system - Simular in theory but you pump cool well water over the coils (heat-exchanger)and dump the water in a lake or stream.

It is an interesting system that costs from 1/2 to 1/3 less to run and costs less to maintain, (that is the up-side). The down side is cost. the cost of drilling 4 well holes 200 feet deep for the loop cost $5,000 ( the cost of the rest of the system is more or less the same as a normal AC system). I expect to break even in about 5 to 7 years. more $'s up front less $'s each month. (my electric bill last month was $58, largest has been $105)

I hope this long winded explanation helps.

Don Stuart