A geothermal heat pump (or more correctly, ground source heat pump) is a central heating and/or cooling system that transfers heat to and from the ground.

It uses the ground as a heat source (in winter) or a heat sink (in summer). It takes advantage of the moderate temperatures in the ground to boost efficiency and reduce operating costs.

A standard air-conditioner is a heat pump – as is a refrigerator.

One way to explain the process is this – if you pour a little rubbing alcohol on your skin, it will feel cold, but it isn’t refrigerated. Alcohol evaporates at room temperature and while doing this, it absorbs heat from your skin, making it cooler.

Coolant (or refrigerant) works in a refrigerator the way alcohol works on your skin. In a fridge, coolant is trapped inside a series of coils – condenser coils (on the outside of the fridge) and evaporator coils (on the inside). As it circulates, it changes back and forth from a liquid to a gas.

The compressor constricts the refrigerant vapour, raising its pressure, and pushes it into the coils on the outside. When the hot compressed gas in the coils meets the cooler, external air temperature of the kitchen, it becomes a liquid.

Now in liquid form at high pressure, the refrigerant flow is restricted, creates a drop in pressure, and cools down as it flows into the coils inside the freezer and the fridge. The refrigerant absorbs the heat inside the fridge, cooling the air. The refrigerant evaporates to a gas and flows back to the compressor, where the cycle starts all over.

In a similar way, a ground source heat pump extracts ground heat in the winter (for heating) and transfers heat back into the ground in the summer (for cooling).

Temperatures below about three metres underground around the world are fairly constant (12–18 degrees Celsius), regardless of outdoor temperature. By using geothermal heat to equalise a building’s temperature with that of the ground, less energy is required to bring the temperature up or down to comfortable levels, resulting in significant energy savings.

In Victoria, heating, cooling, and making hot water consumes about 80% of the average household’s power bill.