This paper presents a feasibility and performance study of ground source heat pump (GSHP) coupled with horizontal ground heat exchanger (HGHX) used for cooling residential unit equipped with radiant floor system (RFs) under the meteorological conditions of Saharan environment in Ouargla, city located in Southeast Algeria. A dynamic simulation system is developed using TRNSYS software for modeling the performance of the GSHP system. To verify the reliability of GSHP including HGHX system programs, the modeling procedure was validated against experimental data from a horizontal ground source heat pump system (HGSHPs) installed at the Research and Technology Center of Energy (CRTEn), Tunisia, and a good agreement was obtained. Then, to obtain an acceptable balance between system efficiency and total cost of HGSHPs an economic analysis was carried out to determine the optimum design parameters of the HGHX. The simulation results obtained from this study indicated that the HGSHPs could effectively solve cooling problem and reduce traditional energy consumption in the Saharan areas; it is possible to lower the mean indoor air temperature below 27 °C and raise the average relative humidity to reach 73.97%. By concentrating principally on the thermal-economic optimization, the optimized COP of the GSHP that combines the reliability and economy of cooling in long term was found to be 3.89.