This is the ground loop. It can be vertical, (as shown in the animation), horizontal (see right) or in a pond. The flow center circulates water or a water-based biodegradable antifreeze solution to the earth, where it exchanges the heat energy and returns.
In the winter, the ground loop heat exchanger takes the heat out of the fluid (chills it), making it colder than the earth so the ground warms it.
In the summer, the ground loop heat exchanger dumps all of the heat that you are trying to get rid of into the fluid (heating the fluid, making it warmer) instead of trying to dump that heat into the outside air like a conventional air conditioner does. The earth at that point is significantly cooler that the (heated up) fluid so the earth efficiently cools the fluid.
Think of heating a liquid (a pot of potato soup maybe?) on the stove. You put heat energy into the soup and it gets hotter. You put it into the refrigerator or set the pot in an ice bath and the colder element absorbs the heat energy from the soup, chilling it.
Your geothermal unit is doing the same thing. it is either chilling the liquid in the loop in the winter (taking the heat out) or warming the fluid in the summer (putting excess heat into the fluid.).
The animation depicts winter use, where the chilled fluid is warmed by the earth.
Click on a component to learn more about it