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Underground thermal energy networks (TENs) are a serious emerging infrastructure option for heating and cooling—but they are not yet a nationwide replacement for gas systems or conventional HVAC. By connecting multiple buildings to shared underground loops, boreholes, heat exchangers, heat pumps, and thermal storage, TENs can move heat between buildings, reduce onsite combustion, and make building electrification easier to manage.
Their national importance will depend on whether utilities, developers, regulators, and communities can control upfront costs, coordinate construction, retrofit existing buildings, and create fair ownership and billing models.
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What is an underground thermal energy network?
A thermal energy network is a shared heating-and-cooling system serving multiple buildings—potentially a city block, campus, neighborhood, affordable-housing development, or community. The network may contain underground water loops, boreholes, wells, heat exchangers, thermal storage, building-level heat pumps, controls, and backup equipment.
Despite the common label networked geothermal, not every system depends on naturally hot underground water or rock. Many use the ground as a relatively stable heat source and heat sink. Others can incorporate wastewater, groundwater, surface water, mine water, industrial waste heat, or heat recovered from neighboring buildings. The U.S. Department of Energy describes networked geothermal systems as shared systems that can serve neighborhoods, city blocks, campuses, and communities (DOE).
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How TENs differ from related systems
- Networked geothermal or TEN: A shared loop and distributed building equipment serve multiple customers.
- Individual ground-source heat pump: One building exchanges heat with the ground through its own loop.
- Traditional district heating: A central plant usually sends hot water or steam to buildings.
- Direct-use geothermal: Naturally hot underground water is used directly for heating.
- Underground thermal storage: Heat or cooling is stored below ground for later recovery.
- Enhanced geothermal systems: Deep engineered geothermal reservoirs, generally associated with higher-temperature resources and electricity production rather than ordinary shallow TENs.
How the system works
Consider a mixed-use district in winter. A building’s heat pump extracts low-temperature heat from the shared loop and upgrades it to a useful indoor-heating temperature. In summer, the process reverses: a building requiring cooling rejects heat into the loop.
That rejected heat may be useful to another building needing hot water or space heating. Boreholes or other thermal-storage systems can absorb excess heat and release it later. Electricity powers the heat pumps, compressors, circulation pumps, and controls.
This ability to share heat is one of the system’s most important potential advantages. A district with simultaneous heating and cooling loads can use energy that would otherwise be discarded. Ground temperatures are also more stable than outdoor air temperatures; DOE sources give typical shallow-ground ranges of roughly 40–70°F, with exact conditions varying by location and depth (DOE heating and cooling overview).
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Building electrification is becoming a grid problem
Replacing gas or oil heating with heat pumps shifts energy use from direct fuel combustion to electricity. That can reduce onsite emissions, but it can also increase winter electricity demand—especially in cold climates.
Ground-source and networked systems can be less exposed to outdoor temperature swings than air-source heat pumps. Thermal storage and building controls may also shift some electricity consumption away from the grid’s most stressful periods. The actual benefit depends on equipment sizing, insulation, electricity rates, controls, and the local grid.
DOE has modeled a mass-deployment scenario in which geothermal heat pumps, combined with building-efficiency improvements, could avoid up to 43,500 miles of new transmission lines by 2050. That is a modeled potential, not a measured current benefit or a forecast of certain deployment (DOE geothermal heat-pump analysis).
Decarbonization needs more than clean electricity
A TEN can reduce or eliminate onsite gas and oil combustion, but it is not automatically zero-carbon. Its emissions profile depends on the electricity supply, backup fuels, refrigerants, drilling and construction, pumping energy, and building efficiency.
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A network powered by increasingly clean electricity may become cleaner over time. A network that relies heavily on fossil-fueled backup equipment or serves inefficient buildings will deliver less climate benefit than its name might suggest.
Utilities are looking for new infrastructure models
Shared thermal loops may offer gas and electric utilities a way to participate in heating decarbonization by owning or operating thermal infrastructure. That creates a difficult regulatory question: should a utility recover loop costs through a regulated tariff, and should nonparticipating customers contribute?
The 2025 U.S. Geothermal Market Report identifies growing state activity and describes Eversource’s Framingham project as the first U.S. utility-owned geothermal TEN pilot (National Laboratory of the Rockies). The business model remains experimental.
Framingham is an important test—not national proof
Eversource commissioned its utility-owned Framingham, Massachusetts, pilot in 2024. The ambient-temperature network connects 36 buildings to three borehole fields, with decentralized geothermal heat pumps serving the buildings.
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The project matters because it tests more than equipment. It tests whether a regulated utility can own and operate a shared thermal system, how customers are billed, who pays for building-side equipment, and how costs and benefits are distributed.
Its results should be judged by questions such as:
- How much gas demand is displaced?
- What are the construction, operating, and maintenance costs?
- How do customers’ bills compare with their previous heating and cooling costs?
- What happens when connection rates or building loads differ from projections?
- Can the utility expand the model without shifting unreasonable costs to nonparticipants?
Framingham is valuable evidence of experimentation with a utility model. It is not proof that every U.S. neighborhood can support a profitable TEN.
From campuses to neighborhoods
Campuses are among the easiest places to deploy shared thermal systems. They usually have one owner, concentrated buildings, existing utility corridors, professional facilities staff, long planning horizons, and predictable heating and cooling loads. DOE lists Brown University, Notre Dame, Seattle Public Schools, and other institutions among organizations using or developing district-scale geothermal systems (DOE district heating and cooling).
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Neighborhoods are harder. Homes and businesses may have different owners, leases, equipment, renovation schedules, and willingness to connect. Streets may contain crowded underground utilities, and customers may resist construction disruption or mandatory connections.
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DOE has selected 11 community coalitions in 10 states for planning and design work and three projects for installation, including projects in Framingham, Ann Arbor, Michigan, and on Tribal lands in Oklahoma (DOE community projects). These demonstrations address not only engineering but also affordability, workforce development, community participation, and replicability.
Klamath Falls, Oregon, illustrates another model. DOE says its geothermal system serves 23 commercial, nonprofit, and government facilities. It is a direct-use geothermal district-heating system, however, and should not be treated as identical to a modern ambient-temperature TEN.
What is actually underground?
The underground portion may include closed-loop piping connected to boreholes, open-loop wells, buried distribution pipes, or heat exchangers. The building may contain a water-to-water or water-to-air heat pump, hydronic equipment, fan coils, controls, meters, and domestic-hot-water equipment.
Thermal storage can take several forms, including borehole fields, aquifer systems, mine-water systems, and hybrid arrangements using solar thermal or waste heat. Shallow borehole storage should not be confused with deep, high-temperature geothermal power. The drilling depth, temperature, risks, economics, and maturity are different.
Potential advantages over building-by-building electrification
- Shared boreholes and distribution infrastructure.
- Lower exposure to outdoor temperature swings.
- Heat exchange between buildings with opposite loads.
- Potential short-term or seasonal thermal storage.
- Reduced onsite combustion.
- Centralized maintenance and professional controls.
- Integration of wastewater, industrial, commercial, or data-center waste heat.
- Possible reduction in winter electric peaks.
- A potential utility-service model instead of a large upfront purchase by every building owner.
None of these benefits is automatic. A poorly designed network can have excessive pumping energy, inadequate boreholes, construction delays, low connection rates, or expensive building retrofits.
The economics are project-specific
There is no meaningful universal “cost per home” for a TEN. Costs depend on density, geology, drilling, trenching, building conditions, electrical service, heat-pump capacity, financing, labor, permitting, incentives, and the number of customers that actually connect.
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A serious comparison should include:
- Loop, borehole, trenching, and connection costs.
- Building retrofits and electrical upgrades.
- Financing and utility cost recovery.
- Heat-pump electricity and demand charges.
- Maintenance and replacement cycles.
- Gas, oil, or electricity prices.
- Available grants and tax incentives.
- Backup equipment and resilience measures.
- Potentially avoided gas or electric infrastructure.
- Construction disruption and easement costs.
DOE’s 2025 commercial-liftoff report says tax credits can materially improve geothermal project economics and describes cases in which geothermal heat pumps may be the lowest-first-cost option for certain large buildings. That is not evidence that every TEN is cheaper than gas, air-source heat pumps, or conventional district energy.
Federal incentives also require careful, current review. DOE’s commercial guidance describes a 6% base commercial investment tax credit, with potential bonuses that can raise the total to 30% when applicable requirements are met. Residential geothermal heat-pump expenditures are listed by the IRS as eligible for a 30% Residential Clean Energy Credit subject to current requirements, including applicable Energy Star standards. Owners should verify eligibility with the DOE guidance and IRS before relying on an incentive.
The hard parts of scaling
Drilling, geology, and land
Closed-loop systems can be deployed in many locations, but cost and performance vary with soil and rock conditions, thermal conductivity, groundwater, drilling depth, available land, existing utilities, and local permitting. Dense cities may have suitable thermal conditions but very expensive right-of-way work.
Building retrofits
The shared loop does not make a building automatically heat-pump-ready. Older buildings may need insulation, air-sealing, new electrical service, hydronic distribution, larger radiators or fan coils, controls, and separate domestic-hot-water solutions. Buildings designed for high-temperature steam can be particularly difficult to convert economically.
Thermal imbalance
A district that rejects much more heat in summer than it extracts in winter can gradually warm the ground. The opposite imbalance can cool it. Designers may need larger borehole fields, supplemental heat sources, storage, or buildings with complementary loads.
Workforce and construction
Projects require drillers, geologists, mechanical engineers, pipe installers, heat-pump technicians, controls specialists, retrofit contractors, utility planners, and inspectors. Road excavation can create noise, traffic disruption, utility conflicts, sidewalk closures, and temporary access problems.
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Successful deployment requires answers to basic governance questions: Who owns the loop? Who owns equipment inside buildings? Who maintains it? Is thermal service regulated? Can customers disconnect? How are renters protected? How are low-income households supported? What happens to existing gas assets?
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How clean and resilient are TENs?
A TEN can reduce emissions by replacing onsite combustion, using efficient heat pumps, recovering waste heat, and shifting demand. It still has an emissions boundary that includes electricity, refrigerant leakage, drilling, construction, pumping, and backup systems.
It is also not automatically resilient. Heat pumps and circulation pumps require electricity. A grid outage can interrupt heating unless the project includes backup generation, battery or thermal storage, redundant equipment, microgrid capability, or another islanding strategy. Reducing dependence on fuel deliveries is useful, but it is not the same as operating without power.
Where TENs make the most sense
Strong candidates include:
- Dense neighborhoods and mixed-use developments.
- Affordable-housing developments where shared infrastructure can spread costs.
- Campuses, hospitals, military bases, and public facilities.
- New developments where streets and utility corridors are already being built.
- Districts with simultaneous heating and cooling loads.
- Locations near wastewater, industrial, or other dependable waste-heat sources.
- Communities with supportive utility regulation and a coordinated owner.
They may be a poor fit for very low-density housing, sites with difficult drilling conditions, buildings with limited electrical capacity, districts without a coordinated decision-maker, or facilities requiring very high-temperature heat without a retrofit plan.
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Technical
- What heat source or sink is available?
- Are ground thermal properties known?
- Is there enough land or right-of-way?
- Can buildings operate at compatible temperatures?
- Are domestic hot water, peak loads, and backup included?
- Has long-term thermal balance been modeled?
Economic
- What is the total installed cost, including building work?
- Who finances the system?
- What will customers pay monthly?
- What happens if fewer buildings connect?
- Does the comparison include replacement of aging boilers, chillers, or gas infrastructure?
Institutional and environmental
- Who owns and maintains the network?
- How are tenants and low-income customers protected?
- What electricity mix and backup fuels are assumed?
- What refrigerants are used?
- What are the construction, groundwater, noise, and land impacts?
The national outlook
Thermal energy networks are moving from isolated demonstrations toward a potentially important U.S. heating-and-cooling infrastructure category. They are especially promising where buildings are close together, loads complement one another, and a utility, campus, developer, or public agency can coordinate investment.
They will not replace every furnace, gas main, air conditioner, or air-source heat pump. In many places, the best answer will be a portfolio: building-efficiency upgrades, air-source or individual ground-source heat pumps, thermal storage, wastewater heat recovery, conventional district energy, and targeted TENs.
The decisive transition is therefore not simply from gas to geothermal. It is from treating each building as an isolated HVAC problem to planning heating and cooling as shared infrastructure. Whether that infrastructure becomes broadly important will be determined as much by financing, regulation, construction capacity, and customer protection as by the heat pumps themselves.
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