Each of these define what type of piping system is used to transfer energy from the building to the ground.

In an open loop system water is pumped from the Earth, then through the heat exchangers, and back into the ground. Typically, this system would use a well or lake that has plenty of available water.

A closed loop system is just that. It consists of a huge circular loop. Part of the loop is inside the building and goes through the heat exchanger while the other part is buried outside. In a closed loop system the water in the loop is mixed with an environmentally friendly type of anti-freeze.

In both systems the water in the ground gets brought to ground temperature, between 50° and 60° depending upon where you are located in the United States. When the water goes through the geothermal pump it gets slightly heated or cooled as it transfers heat between the water and the air. The water gets returned to the Earth at a slightly different temperature. When this water gets back into the Earth it gradually starts to go back to the Earth temperature that it originally came out at.