Let's get one thing straight: Geothermal power production is very different than residential geothermal. Geothermal power production is when wells are drilled over an area of high thermal activity in the earths crust, then water is put down the wells to create steam, which turn a turbine, which create electricity. Residential geothermal usually refers to a geothermal heat pump. The ground is still used as a source of heat (or cool) for your home, but the temperatures are much, much lower.
I was stumbling around the internet tonight when I realized Popular Mechanics just put up a great article on residential geothermal. The article has some nice diagrams and pictures, and is a good introduction, but it's not very in depth. From the article:
Geothermal works more efficiently because the system’s mild starting point (the article is referring to the nearly constant temperature of the earth below the frost line) creates an efficient shortcut to the target temperature. Imagine a 100-degree Florida day or a 0-degree Michigan night: Spot the system 50 degrees, and it doesn’t work so hard to get the house comfortable.
So to sum it up, if the ground where the geothermal wells are drilled is 50° F year round , then the geothermal heat pump is going to pump water into the ground (which brings the water temperature close to the ground temperature), then use the water in a heat exchanger to pass the heat it has gained in the ground to your home.
In most parts of the U.S. this works in the winter (when the outside air temperature is usually colder than the ground temperature) to heat your home. But this also works in the summer, when the ground temperature is cooler than the outside air temperature and the water that is pumped into the ground is used to cool your home. It heats/cools your home year round! And it is more efficient than using electricity/gas/oil to heat/cool your home because it is only moving heat from one source to another (the ground <--> your home) not having to create the heat.
With all that being said, the burning question I have is how well geothermal heat pumps work in different parts of the country and for different home types. While there are multiple websites extolling the virtues of geothermal heat pumps, there are few sites that really highlight where they work and more importantly, where they dont. I wouldnt want to spend $30 - $40 k on geothermal heat pump system then realize it really doesn't satisfy my heating/cooling needs.
Take my situation for example: I live in Atlanta where it gets real hot in the summer, and can get pretty cold (but rarely freezing) in the winter. I'm not that worried about the summer cooling (but maybe I should be. Would a geothermal heat pump have enough cooling power to cool the house on a 95 degree day?), but more worried about the winter heating. My town-home is 3 stories, but we only really heat/cool the upper two. If it gets down to 40º F at night, but the heat pump can only get the inside temp to 50° F , am I still going to have to rely on a natural gas furnace to get to a comfortable 68° F? None of the articles I've found have really addressed this. Also, how well does it handle multiple story dwellings? I guess these systems must work pretty well though, because my utility's sister utility recommends geothermal heat pumps right next door in Alabama. The California Energy Commission also has a pretty good review on geothermal heat pumps, so they must work there, but California has desert regions and very cold regions. I'd love to see some information on how geothermal heat pumps work in both!
Basically, a geothermal system can never heat up your home to a higher temperature than the ground temperature all by itself. So something is going to still have to make up the difference. (see comment below. I made a big error when writing the post originally) I still think this can be a useful technology, but it would nice to be able to know when to invest in a geothermal heat pump, or if a solar PV array or new windows would make the better investment. Does anyone have a geothermal heat pump that could shed some light on this discussion?
Check out Scientific American's "Solar at Home" blogger George Musser's experience with a Geothermal heat pump.