SUMMARY A thermoeconomic analysis of a ground‐source heat pump (GSHP) system with a vertical or horizontal ground heat exchanger, a type of heat delivery system, was performed using the modified productive structure analysis method. In this analysis, the unit cost of geothermal heat delivered to a room using GSHP system was estimated. The unit cost of heat delivered was calculated to be $0.063/kWh for input of electricity with a unit cost of $0.140/kWh for a GSHP with a coefficient of performance (COP) of 3.27. Exergy destruction and monetary losses due to the irreversibility that occurs at each component of the system were also estimated. The unit cost of heat was found to be inversely proportional to the COP of the heat pump and proportional to the electricity input. The greatest monetary loss occurs in the geothermal heat exchanger in which considerable mass of brine flows in long pipes and in the fan‐coil unit which features a complex configuration of pipes in the air passages, respectively. Copyright © 2013 John Wiley & Sons, Ltd.