Article written by Marco Chown Oved Climate Change Reporter for the Toronto Star, Oct. 18, 2025.
Tim Weber, co-founder of Diverso Energy
A rock’s throw from High Park, workers are putting the finishing touches on a modern midrise condo preparing to open its doors to residents.
To the casual observer, the white brick and floor-to-ceiling windows are par for the course for a new building in Toronto.
Hidden deep beneath the parking garage, however, there’s something that sets this condo apart: 32 boreholes more than 250 metres deep that will soon be using the earth to heat and cool the building with virtually no carbon emissions.
Geothermal is going mainstream — no longer a fringe technology reserved for places close to hot springs or volcanoes, where intense heat from the earth can be used to generate electricity. Shallower geoexchange systems can now be installed anywhere you can drill down to bedrock.
The idea is relatively simple: pump water underground and use it to bring back heat in the winter and cold in the summer.
Geothermal systems have traditionally been deployed by those willing to pay large amounts up front to drill holes deep enough to make future heating less expensive. Developers who build GTA condos have had little incentive to spend the extra cash, especially when it’s the purchaser, not them, who benefits from the cheaper bills.
But an innovative business model has changed the economics of geothermal and helped fuel a wave of installations in buildings across the region, in highrise, midrise and even single-family detached developments.
“When I got into this business, no one knew what geothermal was,” said Paul Frith, president of the Ontario Geothermal Association (OGA). “But the numbers have changed dramatically.”
Since 2018, the number of approved development applications in Toronto that incorporate geothermal has increased more than tenfold, according to city hall. There are currently 101 approved buildings — mostly condos and rentals — though only eight have opened their doors. Proportionally, geothermal has gone from being installed in less than one per cent of new homes in the city a decade ago to nearly 30 per cent this year, the OGA reports.
Being able to tout zero on-site carbon emissions is one selling point (the only emissions come from electricity generation, which are low in Ontario), said Frith. Having stable year-round bills that don’t fluctuate with the international natural gas market is another.
“But the biggest factor has to be this new financing model. It works because the developer doesn’t have to pay,” he added.
This summer, Mattamy Homes, one of the biggest homebuilders in North America, signed a joint venture agreement with geothermal company Diverso Energy, to roll out the technology on a mass scale. Diverso will drill and maintain the geothermal systems beneath buildings and provide year-round heating and cooling to residents at a fixed rate.
So rather than a condo board taking ownership of a boiler or cooling tower, and paying for the natural gas and electricity to run them, Diverso owns the system and recoups its investment over time while residents can heat and cool as much as they please without any impact on their bills.
“The business model has always been difficult,” said Phil Santana, director of sustainability integration at Mattamy Homes, which has quietly incorporated geothermal into more than 1,400 new homes in the GTA over the past five years. “Geothermal does have an additional capital expense in the form of the borehole drilling,” he said. “Most of our competitors aren’t doing geothermal, so they don’t have that expense.”
“What we’ve done with our partners at Diverso is replicate the utility model to allow a lower barrier of entry. Much like utilities charge a monthly fixed cost to their customers to pay for their infrastructure, homeowners won’t have to pay that upfront capital cost for geothermal. It will be amortized over a longer period of time,” said Santana.
Diverso started a decade ago when co-founder and CEO Tim Weber, who had a background in geothermal construction, joined forces with engineer Sergio Almeida and businessman Jon Mesquita to create a one-stop-shop for geothermal systems. They pioneered the no-cost-upfront model they call “energy as a service.”
This summer’s partnership with Mattamy is the latest signal that geothermal is gaining momentum. While the technology has been installed in thousands of homes across the province, it was done on an ad hoc basis, where every project was different. Joining forces with a massive homebuilder means Diverso’s geothermal systems will be standardized and integrated into the planning and construction schedules for tens of thousands of new homes in the years to come.
“We’re finding the balance between affordability and sustainability to level the playing field with conventional infrastructure like natural gas,” said Weber. “That’s the beauty of partnering with Mattamy: We’re not treating things as a one-off. We’ve got a pipeline of projects and we can invest the time to make that pipeline more efficient.”
Diverso has installed its geoexchange systems in more than 40 residential projects in the GTA, ranging from the 66-storey Exchange Tower 3 in Mississauga to the four-storey Bridgehouse Gate condos in Newcastle.
“Much of that was in the midst of the worst real estate market in 30 years,” said Weber. “If the condo market had stayed on the same trajectory it was on, I can’t even imagine what our numbers would be right now.”
What geothermal looks like for Toronto
Stepping through a doorway in the underground parking lot at the Westbend condo on Bloor Street West, Weber weaves between thick black pipes that snake along the walls and ceiling. The industrial latticework comes together at the back of the room, where 16 black tubes emerge from the concrete floor.
This is the manifold, where the underground geothermal infrastructure connects to the aboveground HVAC system.
Geothermal uses U-shaped plastic tubes to pump a water and antifreeze mixture down into the ground and back out. In the summer, the water takes heat from the building and dumps it underground. In the winter, that process reverses, taking heat from underground and using it to warm up the building.
“The beauty of it is the simplicity. It’s just plastic, dirt and water. Nothing to break or wear out,” said Weber.
The systems come with a performance guarantee — a kind of warranty — for 30 to 50 years. But with proper maintenance, Weber said, a bore field can last indefinitely.
“It will outlast the building,” he said.
Toronto is hot in the summer and cold in the winter, conditions that make it particularly well-suited for geothermal, which capitalizes on the difference between surface temperature and the relatively stable temperature deep below ground, said Weber.
In the manifold room, the underground loop exchanges heat with a ground-source heat pump that distributes the heating and cooling to individual units.
Heating with geothermal can reduce a building’s carbon emissions by 70 per cent (a similar amount to an air-source heat pump, but using less electricity). And while the carbon emission reductions are dramatic, Weber said geothermal makes practical and financial sense, too.
“We’re not climate zealots,” he said. “We’re just trying to create the path of least resistance for (developers) to shift into this new world of electrification.”
“We can get a 70 per cent carbon reduction without breaking a sweat. That’s really easy without taking on a lot of risk. Everything in the building is business as usual: The distribution system, the thermostats, the heat pumps, the entire mechanical. We’re just slapping on a bore field.”
Not just reserved for single buildings, geothermal energy has also been used in district energy systems that heat and cool multiple buildings, including U of T’s St. George Campus and a subdivision in Markham. The Enwave district energy system that heats and cools 200 buildings in the downtown core uses similar technology to cool office towers and condos in the summer, but pipes waste heat into the lake rather than the ground.
When pitching geothermal, Weber said developers often balk at the additional infrastructure necessary. But when you consider the effort and complexity that goes into natural gas extraction and distribution, geothermal is simpler, safer and better for the environment, he said.
“If you went back in time 70 years ago and said, ‘I’ve got two options for you to heat your building. One involves drilling two miles deep out west, pumping explosive vapour under pressure across the country, under your city, into your building, into a box and lighting it on fire. Or we’re going to put pipes in the ground and run water through them. Which option would you prefer?”