Geothermal heat pumps employ one of the following types of external loop:

* Open Loop
* Closed Vertical Loop
* Closed Horizontal Loop.

The closed vertical loop system uses a single well or borehole with the fluid inside the pipe continuously re-circulated to and from the well. If a borehole is used, it is usually filled with a bentonite grout surrounding the pipe to give a good thermal connection to the adjacent soil or rock.

The amount of vertical or horizontal looping needed depends on the thermal conductivity, deep earth temperature, heating and cooling power required and also on the equilibrium between the quantity of heat rejected to and absorbed from the ground during the year. A rough estimate of the soil temperature is the normal daily temperature for that area.

Geothermal heat pumps are also used in non-residential buildings, but the large variety of loads and load patterns in such applications make it very complex to make rules for capacity per unit of building area or quantity of heat exchangers required per unit capacity. In commercial applications a field of bore holes is dug. The holes are located 5-6 m apart and are normally 15 m deep per kW cooling. During cooling time of year, the local temperature rise in the bore field is affected mostly by the moisture in the soil. Consistent heat transfer models have been developed through sample bore holes and other tests.

Heat pumps are actually suited for underfloor heating systems which do not need very high temperatures. The heat is distributed more evenly in large surfaces like floors and allows for a low temperature fluid.

The closed horizontal loop is located under the frostline that is 1 to 2 m underground. The Earth below the frost line remains at a comparatively constant temperature throughout the year. This temperature equates roughly to the average annual air-temperature of the location and is usually 7-21 degrees Celsius (or 45-70 degrees Fahrenheit). As this temperature remains constant, these pumps operate with greater efficiency and in a larger range of temperatures than conventional AC's and furnaces.

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