One of the most recently developed ground source heat pump (GSHP) models which accounts for real-time, comprehensive surface energy balance phenomena, was modified in this paper to obtain the solution for a non-homogeneous domain. Alternating direction implicit and fully explicit finite difference methods were utilized and numerical results were compared to field measurements. The developed model was then used to evaluate effectiveness of an intermediate insulation layer obtained from tire recycling, Tire Derived Aggregate (TDA). Employment of TDA is demonstrated to be beneficial for increasing energy extraction rates from the ground to maximum values of about 17% for cold climates, and about 5-6% for moderate climate conditions. Existence of an optimum configuration for the TDA blanket, which maximizes the energy gain, also was detected. Potential energy saving for GSHP operation on an annual basis, with the introduction of the TDA blanket was demonstrated as practical. Validation of these findings with field data of longer duration are necessary and currently being planned. Published by Elsevier Ltd.