A geothermal system uses the heat (and in the summer, the cold) stored in the earth.
This energy comes from the sun, rainwater and the earth's core.
Roughly two metres below the surface of the earth, the temperature is 8°C all year round.
This energy is free, renewable and clean.
To take advantage of this heat (cold), we use a heat pump to run a liquid thru an underground pipe system. Beneath the surface, the liquid will warm up, (or cool down in the summer), as it progresses thru the pipe. When it returns to the heat pump, the temperature is increased some more, before being redirected to the house.
This is what makes this heating/cooling system efficient, economical, and environmentally friendly.