Texas's massive cooling load — humid subtropical (Cfa) east, semi-arid (BSh/BSk) west — gives ground-source heat pumps one of the strongest cooling-side payback profiles in the country. The state has 68 verified geothermal contractors, with growth markets in Houston, Dallas-Fort Worth, Austin, and San Antonio. Even after the federal §25D residential credit was terminated by the One Big Beautiful Bill Act (P.L. 119-21) on December 31, 2025, Texas utility rebates plus the §48 commercial credit and the Texas Property Tax Code §11.27 solar/wind property-tax exemption (which extends to geothermal) keep ground-source compelling.
- 68 verified contractors
- 45 cities covered
- ★ 4.9 avg rating (9,753 reviews)
- 45 WaterFurnace dealers
- 5 IGSHPA-certified
Top Texas cities for geothermal contractors
Coverage spans the four largest metros — Houston, Dallas-Fort Worth, San Antonio, Austin — plus growing presence in Hill Country, the Permian Basin, and East Texas. Texas's diverse climate zones (humid Gulf Coast, dry plains, semi-arid west) drive different loop strategies by region.
Featured Texas geothermal contractors
The contractors below are Texas's highest-rated on Geothermal Finder, ranked by review volume then overall rating.
Texas geothermal incentives in 2026
The federal §25D Residential Clean Energy Credit was terminated for new residential expenditures completed after December 31, 2025 by the One Big Beautiful Bill Act (P.L. 119-21). 2025 installations carry forward via IRS Form 5695. Texas state and utility programs now carry the residential incentive load:
- Oncor Take A Load Off Texas program — Dallas-Fort Worth and East Texas service territory; energy efficiency rebates for high-efficiency electric HVAC including ground-source.
- CenterPoint Energy — Houston metro; CoolSaver program offers rebates on qualifying heat pump installations.
- AEP Texas — west and south Texas service territory; energy efficiency programs include ground-source.
- CPS Energy (San Antonio) — energy efficiency rebates for residential heat pumps.
- Austin Energy — heat pump rebates in the Austin service area.
- Texas Property Tax Code §11.27 — solar and wind energy device tax exemption that has been interpreted to include qualifying geothermal heat pump systems. Verify with your county appraisal district before relying on this for budget planning.
- Federal §48 commercial credit remains active through 2034 with phase-down; widely used in third-party-owned residential leases.
For state-by-state matrix see geothermal rebates by state, and use our geothermal tax credit calculator.
Texas climate and ground conditions
Texas spans humid subtropical (Cfa) along the Gulf Coast and East Texas, semi-arid (BSh) in central and west Texas, and arid (BWh) in the far west. Cooling load dominates statewide; heating is modest. This makes ground-source's cooling efficiency advantage (COP 4.5–5+ vs air-source 3–4 in 100°F+ summers) the primary economic driver. Ground temperatures at typical loop depth stay around 65–72°F across most of Texas.
Soil varies dramatically. East Texas has clay over sandy loam, suitable for both vertical and horizontal loops. Hill Country has shallow limestone bedrock — vertical drilling is straightforward but encounters rock quickly. Houston and Gulf Coast have heavy clay (Houston Black) that swells when wet — horizontal trenches need care. West Texas caliche and rocky soils favor vertical bores or air-coupled hybrid systems where ground conductivity is low. Pond loops are viable on rural Hill Country and Piney Woods properties.
Texas permits, licensing, and inspections
Texas Commission on Environmental Quality (TCEQ) regulates well drilling under TAC Title 16. Closed-loop geothermal drillers must hold a Texas Water Well Driller license. HVAC contractors require a Texas Air Conditioning and Refrigeration Contractor License (issued by the Texas Department of Licensing and Regulation, TDLR). Local building permits cover the indoor heat pump unit and electrical service. For permit specifics see our geothermal permit lookup.
Frequently asked questions
How much does geothermal cost in Texas?
A typical 3-ton residential system in Texas runs $19,000 to $32,000 installed. Hill Country limestone drilling premiums and Houston clay considerations can push costs higher in those markets. Utility rebates (Oncor, CenterPoint, AEP Texas, CPS, Austin Energy) reduce out-of-pocket cost. Federal §25D no longer applies to 2026 residential installations.
Is geothermal worth it in Texas given the heat?
Yes — and the heat is exactly why. Ground temperatures stay 65–72°F at loop depth even when air temps hit 100–110°F, so ground-source heat pumps maintain COP 4.5–5+ when air-source systems derate to 3 or below. In Texas's cooling-dominated load profile, that summer efficiency advantage is the primary economic driver and typically pays back the system in 7–12 years even without §25D.
Is geothermal exempt from Texas property tax?
Texas Property Tax Code §11.27 provides a property-tax exemption for solar and wind energy devices that has been interpreted by some county appraisal districts to include qualifying geothermal heat pump systems. Application requirements and interpretation vary by district. Verify with your county appraisal district before relying on the exemption for budget planning.
Vertical or horizontal loops in Texas?
Lot size and soil decide. Hill Country limestone favors vertical bores (drilling encounters rock quickly anyway). East Texas and Gulf Coast clay support both vertical and horizontal — horizontal trenches need adequate land area (1,500–3,000 sq ft per ton) and consideration of clay swelling. West Texas caliche often favors vertical or hybrid systems. An IGSHPA-trained designer matches loop type to lot, soil, and load.
Do I need a permit for geothermal in Texas?
Yes. Closed-loop installations require a Texas Water Well Driller licensed by TCEQ, a Texas Air Conditioning and Refrigeration Contractor licensed by TDLR, and a local building permit covering the indoor unit and electrical service. Reputable Texas contractors handle the full permit pull.