An exergoeconomic model of a vertical ground-source heat pump residential heating system presented in this study uses exergy and cost energy mass (EXCEM) methods. The data obtained from a ground-source heat pump (GSHP) residential heating system installed at the Solar Energy Institute, Ege University, Turkey, are utilized for calculations at different reference temperature values in the range 0-25 degrees C. The performance of the geothermal heat pump residential heating system is evaluated to indicate how exergoecomic parameter values change with system. We also undertake a parametric study to investigate how varying reference temperatures will affect the exergoeconomic analysis of the GSHP system. A correlation between the ratio of thermodynamic loss rate to capital cost and reference state temperature is developed. (c) 2006 Elsevier Ltd. All rights reserved.