A geothermal heat pump is a lot like the heat pumps that many of us have at our homes now, but they are ground-source instead of air-source.  Geothermal (or ground-source) heat pumps are just a better way to heat and cool your home.  They work like other heating and cooling systems with thermostats and fans, but they do not need natural gas or propane, plus they are very quiet, and are extremely reliable.  They can be used on any size home and can replace any type of unit that a home may currently have.  It actually works by pairing the heating and cooling system with a series of ground loops that extend down into the earth.  The earth has a nice, stable temperature and provides a way to keep the home comfortable throughout the year.  Because of the energy it gets from the earth it uses about 40 -60% less energy than a conventional system. Geothermal heat pumps are the most cost effective, energy efficient way to heat and cool a home. 

During the summer, geothermal heating and cooling systems absorb heat from your home and transfer it to the underground loop where it is then absorbed by the cooler earth. The geothermal heat pump uses the cool water returning from the ground to create cool, dehumidified air conditioning for your home. When you need cooling the most, the outside air is hottest. A traditional air source heat pump must work hard to force the heat from your home into the already heat saturated air. In contrast, a geothermal heat pump consumes less energy as it easily rejects heat into the cool earth, making geothermal cooling significantly more energy efficient.

During the winter, geothermal heating and cooling systems absorb heat stored in the ground through the water that circulates in its underground loop. This heat is carried to the ground source heat pumps where it’s concentrated and then sent as warm, comfortable air throughout your home.  When you need heating the most, the air outside is coldest.  As a result, a traditional air source heat pump works hard to extract the amount of heat from the cold air needed to properly heat your home.  In contrast, a geothermal heat pump system consumes less energy as it easily absorbs ground heat from the abundant supply stored below your home, making geothermal heating significantly more energy efficient.  Gas furnaces burn natural gas or expensive propane to provide heat for your home and are only up to 98% efficient, while geothermal systems use significantly less energy collecting heat from the earth, achieving 400-600% efficiencies.

The following edit was recommended by DOE's Office of Energy Efficiency and Renewable Energy's Geothermal Technologies Office: At :58, “During the winter, the air is usually cooler than the temperature below ground. The solution circulates in a loop underground and absorbs the Earth's heat. This heat is brought to the surface and transferred to a heat pump.