Heat exchangers located within the wellbore of shallow geothermal resources are presently being used at several locations in the U.S. These heat exchangers are referred to as downhole heat exchangers. Such installations can have thermal energy output capacities as high as 1 MW for space heating with source water temperature of 90 to 100°C. This work reports on the performance and economics of downhole heat exchangers relative to the alternative geothermal system which pumps the fluid out of the ground and uses heat exchangers located at the earth's surface. Results indicate that the downhole heat exchange systems for capacity requirements less than about 500 to 100 kW are in general more desirable than the surface heat exchange systems for low capacity (less than about 500 to 1000 kW) requirements and shallow geothermal resources. For higher capacities the surface heat exchange systems become more economical. Furthermore, for large depths, the high capacities available from the surface systems are required in order to make the geothermal energy competitive with other sources