Geothermal heating systems use the ground as a heat source, as opposed to other heating systems that use natural gas, burning wood, or other ways of heating the air. At about 20 feet and below the ground temperature usually stays constant, which makes it possible to use it as a heat source. A fluid is run through pipes in the ground (which at Luther are between 150 and 300 feet underground) that transfers heat either from the building to the ground or the ground to the building, depending on whether it is heating or air-conditioning. When the water in the pipes is warmer than the temperature in the building (or the temperature in the ground??), heat is being transferred from the building to the ground, which results in air conditioning the building. When the water in the pipes is cooler than the building temperature, heat is being transferred from the ground to the building for heating.

Geothermal systems generally work as well as other heating and cooling systems, but may take longer to get a room fully heated. However, the heat pump in a geothermal system is continually moving, which allows it to circulate air better, leaving the building more evenly heated or cooled.

The buildings in Baker village were the first at Luther to use geothermal systems. The choice was a practical one for those buildings because the houses were far enough away from campus that it was difficult to tie them directly to the stream heating system the rest of the buildings on campus used. The Center for the Arts is the only other building on campus that uses geothermal energy.

There is a premium on geothermal systems that make them more expensive to install than other systems. Over the long run, however, they will save money. For example, with the geothermal systems, Baker Village currently uses 9 kilowatt hours of energy per square foot, whereas the college apartments, which do not use geothermal systems, use 16 kilowatt hours of energy per square foot.