Buildings account for 40% of total energy consumption in the European Union and the sector is expanding. Therefore, reduction of its energy consumption (by 20% by 2020) and the use of energy from renewable sources constitute important measures needed to reduce EU energy dependency and greenhouse gas emissions. A significant number of buildings must become energy positive integrating renewable energy sources. One of the main energy saving measure is the improvement of energy conversion in buildings by substitution of the less efficient technologies (EE) with more efficient ones: the most prominent growth of market share occurs for solar heating and heat pumps.However, high initial costs and long return on investment time caused by insufficient efficiency of heat pumps are limiting the penetration of market for this EE technology. The efficiency of heat pumps is mainly determined by the background technology – thermodynamic cycle realisation – employed.The proposed project focuses on development of ground source heat pump technology (GHP) enabling up to 75% energy savings and reduced costs for heating energy consumption. To achieve this goal EFFiHEAT will develop, prototype, test and validate cost-efficient Stirling cycle based GHP with 25% higher COP comparing to technologies in operation. This and 30% of initial cost savings achieved due to innovative Stirling engine design concept will increases consortium competitiveness in high growth GHP market. Application of the EFFiHEAT GHP has potential savings of over 0.03 billion EUR annually. Such savings will contribute to EU targets on reduction of energy consumption and CO2 emissions.The consortium combines know how on electro-mechanical design, process control and material research. Contract research will be performed by a Lithuanian, Spanish and Bulgarian research institutions which provide a unique integration of know how on high efficiency Stirling engine based GHP development