Thermal Energy Storage Market Report

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Global Thermal Energy Storage Market Size

The Global Thermal Energy Storage Market was estimated at USD 35.93 billion in 2025. The global market is expected to reach USD 40.50 billion in 2026 and it is predicted to reach a revised size of USD 105.63 billion by 2034, with a CAGR of 12.73% during forecast period 2026 to 2034.

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

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 2025 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