Five Predictions for Geothermal Heating and Cooling in 2026
2025 saw some big changes for geothermal HVAC in the US and globally – from shifts in key tax credits to the adoption of new systems by major industry players. So what will happen in 2026? Here are a few predictions:
1.AI and data centers will increasingly turn to geothermal
As residential and commercial power prices rise thanks to growing AI-driven demand, geothermal will become a go-to for cooling and electricity generation – helping to solve AI’s challenges with water use, electricity demand and even community relations.
Data center owners will continue to look for more efficient cooling solutions, and geothermal HVAC has the potential to operate more efficiently – and with far less water consumption – than evaporative cooling and related technologies.
Increasingly, data centers will also turn to geothermal systems and heat recovery units (HRUs) to capture the waste heat generated by their operations and store it in boreholes, making it available to nearby buildings that can benefit from the shared thermal energy. With many data centres now located closer to urban areas, the cost of distributing this heat through local networks is falling, unlocking new opportunities for efficient, sustainable energy sharing – and creating new ways to build positive relations with local residents.
2.US policy will boost geothermal awareness & adoption
The US energy conversation has seen a lot of buzz around geothermal thanks to support from the Trump Administration, and while much of that buzz is focused on electricity generation, geothermal heating and cooling is gaining momentum as well, thanks to supportive federal and state policy.
Right now, commercial installers of geothermal heat pump systems can claim a 30% investment tax credit (Section 48 ITC); residential GHP customers can claim a similar 30% federal tax credit for systems meeting ENERGY STAR requirements and placed in service through at least 2033/2034; and states from Utah to Massachusetts have strengthened their incentives for geothermal heat pump deployment.
Installations will no doubt accelerate in 2026 as companies and institutions look to take advantage of these incentives. And whether new projects are using geothermal for electricity or heating and cooling, they’ll continue to raise awareness of the energy potential beneath our feet.
3.Geothermal HVAC customers will prioritize “better, not bigger” solutions
While conventional geothermal heating solutions can require dozens, hundreds or even thousands of boreholes to be drilled, it doesn’t have to be that way – and especially in space-constrained urban environments, geothermal HVAC projects will rely more on small-footprint drilling.
Technologies like directional drilling and smart energy monitoring – like the Erda | deep and Erda | smart™ systems – can deliver highly efficient performance while allowing your building to operate as usual during installation. Diagonal borehole technology fits into more compact surface areas, meeting the same energy demands with fewer boreholes. The result: a cleaner look and a smaller borehole field to maintain.
4.Commercial geothermal HVAC projects will increasingly adopt custom heat pumps
As opposed to off-the-shelf options, custom-built heat pumps can be sized to match the thermal requirements of the building. This optimizes system performance and efficiency for specific applications and eliminates the need to oversize equipment out of concern for meeting peak loads. That provides significant advantages over off the shelf solutions, which offer limited optimisation potential. And while standard heat pumps are primarily designed for durability, custom built systems can actually last longer thanks to better sizing, quality components, and reduced stress on parts.
Companies and institutions looking to replace outdated systems will turn to these custom systems to help them cut long-term costs and provide a solid base for future development.
5.Market understanding of geothermal heating and cooling will deepen
As companies, public institutions, media and average consumers hear more about how geothermal can cut heating and cooling costs, and as more projects come online, momentum will continue to build. Geothermal HVAC’s potential to protect against fluctuating power prices and unpredictable weather will play a part too. We’ve seen it in the UK, and we’ve seen it with other energy technologies like rooftop solar and electric vehicles: As the word gets out, the story gets bigger and bigger. And that’s what we’re expecting in 2026.
As your organization looks at its heating and cooling options this year, definitely consider geothermal – and as always, feel free to reach out! We’d love to hear what you’re considering and see if we can help.