Prices, Price Factors and 2026 Programs
Ground-source (geothermal) heat pump cost in Canada: loop, unit and payback
How geothermal heat pump quotes split between the ground loop and the indoor unit, vertical versus horizontal loops, drilling rules and an illustrative payback check.
A ground-source heat pump, often called geothermal, is the most expensive residential heating option to install in Canada because a large share of the price is the ground loop: hundreds of metres of pipe in drilled boreholes or long trenches, plus the excavation, grouting and connection to the house. The indoor heat pump itself costs roughly what a premium air-source system costs. In exchange, the ground supplies heat at a fairly steady temperature all winter, so efficiency barely drops during a cold snap and there is no outdoor unit to bury in snow. Whether that trade pays off depends on your lot, your fuel today, the incentives you can actually get and how long you plan to stay.
This guide is part of the heat pump installation cost overview. All prices are illustrative.
How a geothermal quote is built
| Component | What it includes | What moves the price |
|---|---|---|
| Ground loop | Boreholes or trenches, pipe, grout, header, purge and pressure test | Loop type, soil and rock, depth, access for the drill rig, lot size |
| Heat pump unit | Water-to-air (ducted) or water-to-water (hydronic) unit | Capacity, variable-speed compressor, desuperheater for hot water |
| Indoor work | Ducts or hydronic connections, electrical circuit, controls | Existing ducts, panel capacity |
| Site restoration | Landscaping, driveway or lawn repair after drilling | Where the rig had to go |
| Design and permits | Loop design to CSA C448, local permits or well records | Province and municipality |
CSA C448 is the Canadian standard for the design and installation of earth energy systems. Ask whether the designer follows it and whether the loop length was calculated for your heat loss, not estimated from a rule of thumb.
Vertical, horizontal and open loops
Vertical closed loop. Boreholes drilled typically tens of metres to over a hundred metres deep, with a U-shaped pipe and grout. It needs little yard space and is common on urban and suburban lots, but drilling is the most expensive part of most geothermal jobs. Rock, boulders or a drill rig that cannot reach the backyard can raise the price considerably.
Horizontal closed loop. Pipe laid in trenches a few metres deep across a large area. Excavation is cheaper than drilling, but it needs a big, open lot, which suits rural properties.
Open loop. Uses groundwater from a well and returns it to the ground. It can be efficient but depends on water quantity and quality and is subject to provincial water rules; some jurisdictions restrict it.
Provinces regulate drilling and wells, and some require a licensed driller or a record of the borehole. Ontario, for example, has specific environmental rules for vertical ground-source systems. Check with your provincial environment ministry and your municipality before you commit.
Worked example: geothermal versus cold-climate air-source
Illustrative figures for a 3-ton heat loss home currently heated with oil.
| Item | Geothermal (vertical) | Cold-climate air-source |
|---|---|---|
| Unit and installation | 3 × $9,000–$15,000 per ton = $27,000–$45,000 | 3 × $4,200–$6,500 = $12,600–$19,500 |
| Extras (electrical, oil tank removal) | $2,500 | $2,500 |
| Range before tax | $29,500–$47,500 | $15,100–$22,000 |
| Mid-point | $38,500 | $18,550 |
The extra cost of the geothermal mid-point is $38,500 − $18,550 = $19,950. Suppose geothermal saves $600 a year more than the air-source unit, rising 2% a year. Over 20 years that saving totals about $600 × 24.30 = $14,580, which does not repay the $19,950 difference. A provincial rebate of, say, $12,000 (Ontario's Home Renovation Savings lists ground-source heat pumps at up to $12,000 depending on size; confirm current amounts) brings the net difference to $7,950, which the same savings repay in roughly 12 years. Try your numbers in the heat pump payback calculator.
The loop itself can last far longer than the indoor unit, so a second heat pump decades later costs much less than the first installation. Take that into account if you plan to stay long-term.
When geothermal makes the most sense
- New construction or major renovation, when ducts and landscaping are being redone anyway.
- Large rural lots with room for horizontal trenches, especially where heating is now oil, propane or electric resistance.
- Very cold regions where air-source units would lean heavily on backup heat.
- Homes that also want efficient water heating via a desuperheater or a water-to-water unit for in-floor heat.
It makes the least sense on small lots with no rig access, in homes you expect to sell within a few years, or where natural gas is cheap and you plan to keep gas for other appliances.
Questions to ask a geothermal contractor
- Who designs the loop, to what standard, and what loop length and borehole depth did the design produce?
- Is the drilling subcontracted? Who is responsible if the loop leaks or underperforms?
- What antifreeze solution is used, and how was the loop pressure-tested and flushed?
- What is the warranty on the loop pipe, the heat pump and the labour, separately? See warranty registration.
- Which permits or drilling records are needed, and who files them?
- Does the model appear on the eligible list of the program you plan to use? See the 2026 program guide.
Sales tax applies to the full job, including drilling; see GST/HST and PST on HVAC installation.
FAQ
Is geothermal the same as "geothermal energy" from hot rock?
No. Residential ground-source heat pumps use the stable temperature of shallow ground. They move heat with electricity; they do not tap hot rock.
Can a ground-source system provide air conditioning?
Yes, a water-to-air system with ducts can cool as well as heat, usually very efficiently.
Does the loop need maintenance?
A properly installed closed loop needs little. The indoor unit needs filter changes and periodic service like any heat pump.
Sources
- Natural Resources Canada — ground-source heat pump guide and qualified products
- CSA Group — CSA C448 design and installation of earth energy systems
- Home Renovation Savings Program (Ontario) — ground-source heat pump rebate
- Ontario Ministry of the Environment, Conservation and Parks — rules for ground-source systems and wells
- Hydro-Québec — LogisVert geothermal support
