In the present paper a quasi-steady state mathematical model is developed to predict the outlet air temperature and monthly heating and cooling potentials of an earth-air heat exchanger. Monthly values of heating and cooling potentials are estimated by rigorous experimentation throughout the year for composite climate of New Delhi. The uncertainty values are calculated for each month; for December the value is 4.9%. It is observed that there is an 8.9 and a 5.9 degrees C temperature rise and fall during winter and summer due to the earth-air heat exchanger buried at a depth of 1.5 m underground. The correlation coefficient, root mean square of percentage deviation, reduced chi-square and mean bias error have been computed for each month. The values are 1, 3.0%, 0.8 and -0.63 for December. Statistical analysis shows that there is fair agreement between theoretical results and experimental observations for each month. Monthly values of heating and cooling potentials have also been predicted for other climatic conditions in India namely Jodhpur, Chennai, Mumbai and Kolkata. Copyright (c) 2005 John Wiley & Sons, Ltd.