Geothermal Heating and Cooling Open Loops vs. Closed Loops An open loop system draws water from your existing well, and then discharges it. Open loop systems can be used where there is a significant volume of clean, quality water to draw from, and an adequate way to discharge the water. With closed loop installations, the water solution is circulated through the loop to the unit inside your home, and then back to the loop again. These loops are absolutely environmentally safe, because the loop is completely sealed, and the water solution volume remains unchanged as it circulates. Closed loops can be installed in a variety of ways, based on the terrain and size of your available lot. Loops can be laid horizontally in trenches, installed vertically in bore holes, or they can be placed on the bottom of a pond or lake. Energy efficiency is about the same with both open and closed loops, because the process to transfer the energy from the earth is the same.