Borehole heat exchangers are the fundamental component of ground coupled heat pumps, which are now widely employed for energy saving in building heating and cooling. The improvement of the thermal efficiency of Coaxial Borehole Heat Exchangers (CBHEs) is pursued in this paper by investigating the effects of thermal short-circuiting and of flow rate, as well as of the constituent materials and of the geometrical configuration of the CBHE cross section. The analysis is performed by means of finite-element simulations, implemented through the software package COMSOL Multiphysics. The real 2-D axisymmetric unsteady heat transfer problem is modelled, for both winter and summer working conditions, by considering CBHEs with a length of 100 in placed either in a high conductivity or in a low conductivity ground. The results point out that the effects of flow rate and of thermal short-circuiting are both important, and that the latter can be reduced considerably by employing a low conductivity material, such as PPR80, for the inner tube. Finally, it is shown that the performance of the CBHE could be improved, with respect to the commonly used geometry, by increasing the diameter of the inner tube while leaving the outer tube unchanged. (C) 2009 Elsevier Ltd. All rights reserved.