While networked geothermal systems—which heat and cool several buildings using shared underground infrastructure and electric heat pumps—are gaining some traction in Canada, their reach has been limited by planning and regulatory systems that provide a continuing foothold for legacy gas heating systems.

Unlike traditional ground-source heat pumps, which serve a single building with dedicated boreholes, networked geothermal shares the underground infrastructure across multiple buildings.

A typical system consists of three key components: a network of underground pipes filled with water, boreholes or trenches that exchange heat with the earth, and electric heat pumps inside each connected building.

Ground-source systems can reduce peak winter electric demand compared to conventional air exchange heat pumps, as underground temperatures maintain year-round stability. They are also expected to last more than 50 years, compared to 10 to 20 years for conventional air-exchange heat pumps, although longevity claims are limited because the technology is in its early years of operation.

In the United States, the systems have begun to take off, with gas utilities receiving federal funding to run pilot projects in Colorado, Massachusetts, Minnesota, and New York.

In 2025, the U.S. Department of Energy reported [pdf] a first-of-its-kind U.S. project in Framingham, Massachusetts, piloted by the natural gas utility company Eversource Energy. It includes 140 retrofitted buildings, and an upcoming expansion will double the network’s size.

Networked geothermal systems make ground-source heating and cooling accessible in places where individual building systems may be expensive, states a recent guide by the U.S.-based Clean Energy States Alliance. They also eliminate fuel-price volatility and can boost resilience compared to centralized fossil-fuel heating systems.

“Geothermal networks are the most efficient technology available for heating and cooling homes,” the Alliance writes. “Installing them at scale will flatten peak demand and decrease the amount of the electric buildout.”

Europe boasts about 400 networked geothermal projects, with more on the way.

In Canada, similar underground networksdraw heat from the Earth, sewage, or natural bodies of water, to serve about 3% of heating demand. About 250 projects have launched nation-wide, including several in the Greater Toronto Area and the earliest project built in Vancouver’s False Creek neighbourhood in 2010, with support from the Federation of Canadian Municipalities’ Green Municipal Fund (GMF).

A project in Markham, Ontario, supported by an $8.7-million investment from the federal government and GMF, is heating and cooling 312 homes with a community thermal energy network (TEN). And a project in Ottawa-Gatineau uses waste heat from a nearby paper factory.

TENs are best used in urban residential areas where homes are clustered together, especially for new builds, both residential and industrial, as well as for campuses, hospitals, schools, and data centres.  But remote communities, too, are seeing the benefits. Communities in the Northwest Territories are big users of the technology, with 21% percent of Canada’s geothermal network projects installed in the territory, reducing its gas reliance.

A recent report [pdf] from the Building Decarbonization Alliance (BDA) and Dunsky Energy, supported by BC Hydro, the City of Toronto, and the Government of Canada, details several municipalities initiating TENs projects, including Montreal, Edmonton, Vancouver, and the Greater Toronto and Hamilton Area.

But land use planning and regulation will be key hurdles to overcome before geothermal networks can expand in Canada, BDA finds. Notably, the country’s longstanding gas heating market, supported by robust regulation, leaves an uneven playing field for an emerging technology.

“Gas remains a strong default in new developments, often seen as essential for marketability, especially for cooking,” states the report. “Without clear decarbonization or electrification mandates or cost-sharing mechanisms, low-carbon options struggle to compete.”