Geothermal energy—created from Earth’s natural heat—has been used for thousands of years to cook and bathe. Modern technology has unlocked new ways to harness geothermal potential: to produce electricity using hot water and steam locked below the Earth’s surface, and to heat and cool buildings.

America leads the world in geothermal power production. Nine states generate nearly 3,200 megawatts of capacity, and more than 100 new projects are developing in 14 states, according to the Geothermal Energy Association, the national trade association for geothermal development companies. For comparison, 1 MW can power 750 to 1,000 average homes. Western states boast the most geothermal energy.

How it works

Typical fossil fuel-burning and nuclear power plants heat water to boiling to create steam. The steam turns a turbine, which generates electricity.

Geothermal power stations cut out the middle man, piping naturally heated water (changed into steam) or naturally occurring steam into a plant to spin turbines. Three different types of geothermal generation exist; the choice depends on the state of the steam or water and its temperature.

  • Dry steam: The first type of geothermal power plants built, these facilities use steam from a geothermal reservoir (pulled from wells) and route it directly through turbines to create electricity.
  • Flash steam: The most common, these plants pump water with temperatures greater than 360 degrees Fahrenheit under high pressure to generation equipment. The steam is separated from the water and used to make electricity; leftover water and condensed steam are channeled back into the reservoir.
  • Binary cycle: These use moderate- to low-temperature groundwater or steam. In a binary cycle system, hot water is pumped from a well and passes through a heat exchanger, where it warms a secondary fluid with a lower boiling point than water. This causes the secondary fluid to flash to vapor, which in turn drives a turbine. The secondary fluid then condenses and returns to the loop system; the water gets pumped back into the well.

Other uses

Geothermal energy offers an array of benefits beyond power generation. In some cases, hot water can be piped directly into systems to heat buildings, greenhouses, and fish farms. Some cities run hot water under roads and sidewalks during winter to melt snow and ice.

The top 10 feet of earth remains a relatively constant 50 to 60 degrees Fahrenheit year-round. Geothermal heat pumps rely on the energy of the ground to move heat into and out of a building, providing heating and cooling. Also called ground-source heat pumps, these appliances come in two types: a groundwater (open-loop) system uses well water; an earth-coupled (closed-loop) model moves a water and antifreeze solution through underground pipes to disperse heat.

While geothermal heat pumps generally operate more efficiently than their air-source cousins, they are more expensive to purchase up front. A federal tax credit equal to 30 percent of the cost for materials and installation, with no limit on total project expenses, applies to geothermal heat pumps through Dec. 31, 2016.

Find a full list of geothermal heat pump requirements, along with a product list, at To see if other rebates are available in your state, check the Database of State Incentives for Renewables and Efficiency at

Sources: Megen Howard, Scott Gates, NRECA; U.S. Department of Energy, National Renewable Energy Laboratory, Geothermal Energy Association, International Ground Source Heat Pump Association

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