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Global Thermal Energy Storage Market Report Summary
The global thermal energy storage market was valued at USD 31.87 billion in 2024, is estimated to reach USD 35.93 billion in 2025, and is projected to reach USD 93.70 billion by 2033, growing at a CAGR of 12.73% during the forecast period from 2025 to 2033. The growth of the global thermal energy storage market is driven by the rising focus on renewable energy integration, government-led decarbonization initiatives, and the increasing need for energy efficiency and peak load management. Thermal energy storage systems enable the storage of heat or cold for later use without chemical conversion, making them a cost-effective and environmentally sustainable solution. Expanding deployment of concentrated solar power (CSP) plants, rising adoption of HVAC systems, and growing demand for grid flexibility are further accelerating market growth. Moreover, thermal energy storage plays a critical role in reducing carbon emissions, lowering energy consumption, and ensuring an uninterrupted power supply during peak demand periods.
Key Market Trends
- Growing integration of thermal energy storage with renewable energy systems, particularly concentrated solar power plants.
- Rising adoption of molten salt-based storage technologies due to their high thermal capacity and operational efficiency.
- Increasing deployment of thermal storage in HVAC applications to shift energy demand to off-peak hours.
- Government-backed clean energy initiatives and climate targets supporting large-scale thermal storage investments.
- Rising focus on grid stability and demand-side energy management across utilities and industrial facilities
Segmental Insights
- Based on storage material, the molten salts segment held the largest share of the global thermal energy storage market in 2024. The segment’s dominance is attributed to its high boiling point, superior heat retention capacity, and suitability for large-scale power generation applications, particularly in CSP plants. Molten salts enable efficient heat transfer and extended energy dispatch, making them the preferred storage medium in utility-scale installations.
- Based on application, the concentrated solar power (CSP) segment accounted for a significant share of the market. Thermal energy storage enables CSP plants to store solar heat during daylight hours and generate electricity during periods of low or no sunlight, improving plant reliability, reducing the levelized cost of energy, and supporting continuous power generation.
- Based on end user, the utilities segment dominated the global market. Utilities deploy thermal energy storage systems to manage peak demand, reduce reliance on additional generation capacity, and enhance grid efficiency by shifting energy consumption to off-peak hours.
Regional Insights
- The global thermal energy storage market demonstrates strong regional variation, influenced by renewable energy adoption, grid infrastructure, and policy frameworks.
- Europe accounted for the largest revenue share of the global market, supported by aggressive decarbonization targets, widespread CSP deployment, and energy efficiency mandates across member states. EU-backed initiatives and research projects continue to accelerate thermal storage adoption.
- North America held the second-largest share, driven by demand-side energy management, grid modernization efforts, and growing investments in renewable power infrastructure.
- The Asia-Pacific region is expected to grow at the fastest CAGR during the forecast period, fueled by rapid urbanization, expanding industrial activity, and increasing investments in energy infrastructure across China, India, Japan, South Korea, and Southeast Asia. Unreliable grid systems and rising electricity demand in developing economies are accelerating the adoption of thermal energy storage solutions.
Competitive Landscape
The global thermal energy storage market is moderately fragmented, with competition shaped by technological innovation, project execution capabilities, and alignment with renewable energy policies. Leading companies focus on expanding molten salt storage technologies, improving system efficiency, and integrating storage solutions with solar thermal and industrial energy systems. Strategic partnerships with governments and utilities, along with investments in large-scale CSP projects, are strengthening market positioning. Prominent players in the global thermal energy storage market include BrightSource Energy Inc., SolarReserve LLC, Abengoa SA, Terrafore Technologies LLC, Baltimore Aircoil Company, Ice Energy, Caldwell Energy, Cryogel, and Steffes Corporation.
Global Thermal Energy Storage Market Size
The Global Thermal Energy Storage Market was estimated at USD 31.87 billion in 2024. The global market is expected to reach USD 35.93 billion in 2025 and it is predicted to reach a revised size of USD 93.70 billion by 2033, with a CAGR of 12.73% over the foreseen period 2025 to 2033.
Thermal energy storage systems are used to store energy for later use. Thermal energy storage (TES), also known as heat storage, is a simple and very efficient method of transferring energy, which does not involve chemical conversion. It is one of the most feasible green energy-saving solutions that retain thermal energy temporarily hot or cold for later use. Thermal energy storage systems reduce carbon dioxide emissions, reduce energy consumption by end consumers and decrease energy demand at peak times. The efficiency and economy of the system depend on the type of material used in manufacturing. It is widely used in solar power plants, thermal power plants, combined thermal and power plants, and process industries, including other energy storage applications.
The major growth drivers of the global thermal energy storage market are increasing focus on renewable energy production and rising government initiatives for these storage systems. Besides, the surge in the call for HVAC technology is likely to boost the demand for the thermal energy storage market. Moreover, the increased call for thermal energy storage in Concentrated Solar Power (CSP) also shows a growth chance for the global market.
MARKET DRIVERS
The energy sector and reducing carbon emissions to slow global climate change are among the most hegemonic goals of governments, energy authorities, and utilities around the world. According to IRENA, the accelerated deployment of renewable energies, combined with electrification and increased energy efficiency of the electricity grid, can help achieve more than a 90% reduction in carbon dioxide (CO2) emissions linked to electricity energy needed to reach Paris's climate objectives by 2050.
According to IRENA, global installed renewable energy capacity in 2019 was 176 GW higher than in 2018, an increase of 7.4%. Production growth returned to its long-term trend, thanks to a recovery in the hydroelectric sector. Solar production continues to grow strongly; in 2018, solar overtook bioenergy to become the third source of renewable electricity production. Solar and wind generation in 2018 increased by 28% and 11%, respectively. Collectively, these 2 energy sources continue to dominate renewable energy production, accounting for 73% of the growth since 2014. Solar energy has experienced an average annual growth rate of 49% globally due to strong political Federal government mechanisms to encourage energy adoption, the Solar Energy Investment Tax Credit, and growing demand for clean energy from the public and private sectors in all major economies in North America, Europe, and the Asia-Pacific region.
Thermal energy storage stores solar thermal energy by cooling or heating a storage medium, such as sand, rocks, water, and molten salt to use stored energy later for cooling and heating applications and power generation. Thermal energy storage is important for the storage of electricity in concentrating solar power plants where solar heat can be stored for power generation when sunlight is not available. This facilitates the uninterrupted operations of CSP plants. Some of the key CSP thermal energy storage technologies include the single-tank thermocline system, the indirect two-tank system, and the two-direct tank system. The benefits of thermal energy storage in CSP power plants include greater reliability, increased overall efficiency, reduced capital, and operating costs, and economical operations. It can also reduce carbon dioxide emissions. Therefore, the integration of thermal energy storage in CSP power plants is likely to drive market growth in the future.
MARKET RESTRAINTS
Thermal energy storage requires lower project costs, but it is less preferred than battery storage and pumped water storage due to its lower efficiency in economies of scale. Hence, these substitutes act as barriers to the growth of the thermal energy storage market.
Impact of COVID-19
In early 2021, the development of renewable energy technologies in several markets was already challenged by funding, political uncertainties, and grid integration, which was further intensified by the coronavirus. According to the IEA, the COVID-19 crisis has had a significant impact on the global growth of adding renewable energy capacity. According to IEA estimates, the number of new renewable energy installations around the world is anticipated to decline in 2021 due to the unprecedented global COVID-19 crisis. This is the first annual decrease in 20 years since 2000 in the addition of renewable energy capacity. Net renewable electricity capacity additions in 2021 are anticipated to decrease by 13% compared to 2019.
REPORT COVERAGE
| REPORT METRIC | DETAILS |
| Market Size Available | 2024 to 2033 |
| Base Year | 2024 |
| Forecast Period | 2025 to 2033 |
| CAGR | 12.73% |
| Segments Covered | By Storage Material, Application, End User, and Region. |
| Various Analyses Covered | Global, Regional and Country Level Analysis, Segment-Level Analysis, DROC, PESTLE Analysis, Porter’s Five Forces Analysis, Competitive Landscape, Analyst Overview of Investment Opportunities |
| Regions Covered | North America, Europe, APAC, Latin America, Middle East & Africa |
| Market Leaders Profiled | BrightSource Energy Inc., SolarReserve LLC, Abengoa SA, Terrafore Technologies LLC, Baltimore Aircoil Company, Ice Energy, Caldwell Energy, Cryogel, Steffes Corporation, and Others. |
SEGMENTAL ANALYSIS
By Storage Material Insights
Molten salts are the most widely used storage media for storing thermal energy because they have higher boiling points and high volumetric thermal capacities. When energy is necessary, the salt is pumped into a steam generator that boils water, spins a turbine, and generates electricity.
By Application Insights
thermal energy storage in Concentrated Solar Power Plants (CSPs) can help overcome the intermittency of solar resources and also reduce the leveled cost of energy (LCOE) when using the energy for long periods. TES systems can collect energy during sunny hours and store it to modify its delivery at a later time or to facilitate plant production in cloudy weather.
By End-User Insights
thermal energy storage systems are integrated into power plants as a viable demand management option. These systems use ice or cold water technologies to store thermal energy in reservoirs during off-peak utility hours. This helps meet peak demand with fewer power plants by shifting energy demand from customers to off-peak hours.
REGIONAL ANALYSIS
Europe is considered for the largest share of revenue with 31.1% in 2021 and is anticipated to maintain its position during the forecast period. North America accounted for the second-largest revenue share in 2021 due to a reduction in the need for more extensive production equipment during peak hours. The Asia-Pacific market is anticipated to grow at the highest CAGR of 14.3% during the outlook period. Developing countries like China, India, South Korea, Japan, Indonesia, and Malaysia are experiencing rapid urbanization and population growth. These developing countries have many unreliable power grids and critical infrastructure systems. This factor is anticipated to force industry players to invest in these countries, thereby stimulating the growth of thermal energy storage and distribution facilities.
The European Union has launched the Grasshopper project, which aims to create a new generation of fuel cell power plants that will use hydrogen energy to produce electricity without emissions. The project involves different private companies to find innovative solutions for the development of viable green technologies.
KEY MARKET PLAYERS
The major players in the global thermal energy storage market include
- BrightSource Energy Inc.
- SolarReserve LLC
- Abengoa SA
- Terrafore Technologies LLC
- Baltimore Aircoil Company
- Ice Energy
- Caldwell Energy
- Cryogel
- Steffes Corporation.
RECENT MARKET HAPPENINGS
- In August 2018, SolarReserve signed an agreement with the government of South Australia (Australia) for the construction of a 150 MW solar thermal power plant.
- In May 2018, SolarReserve expanded by adding a 70 MW solar farm to the Port Augusta Concentrated Solar Power Tower in South Australia. It also provided molten salt storage facilities and supplied electricity at USD 78 / MWh.
MARKET SEGMENTATION
This research report on the global thermal energy storage market is segmented and sub-segmented into the following categories.
By Storage Material
- Water
- Molten Salts
- PCM
By Application
- Power Generation
- District Heating & Cooling
- Process Heating & Cooling
By End-User
- Utilities
- Commercial
- Industrial
By Region
- North America
- Europe
- Asia-pacific
- The Middle East and Africa
- Latin America