But how ground source heating works? I never heard of it.

There is alternative way to save energy: replacing current old ones with new energy saving appliances: refrigerator and heating.cooling system, and have resonable design. For example, my old house and new house are about the same size, but old one uses 2-3 times of energy than new one. Or if your community allows you install a well, you could use it to water yards instead of using city water.