Global Thermal Energy Storage Market Size, Share, And Business Benefits By Technology (Sensible Heat Storage, Latent Heat Storage, Thermochemical Storage), By Storage Material (Water, Molten Salts, Phase Change Materials, Others), By Application (Power generation, District Heating and Cooling, Process Heating and Cooling, Others), By End-use (Utilities, Commercial, Industrial), By Region and Companies - Industry Segment Outlook, Market Assessment, Competition Scenario, Trends, and Forecast 2025-2034

Report Overview

Global Thermal Energy Storage Market is expected to be worth around USD 57.7 billion by 2034, up from USD 29.6 billion in 2024, and grow at a CAGR of 6.9% from 2025 to 2034. With a market share of 35.20% and revenue of USD 10.4 billion, Europe is a leader in Thermal Energy Storage.

Thermal energy storage (TES) refers to a technology that allows for the storage of heat energy to be used later, enhancing energy efficiency and reliability. TES systems collect and store heat energy during periods of low demand or from renewable sources like solar power, which can then be utilized during peak energy usage times or when solar energy isn’t available. This process helps in balancing energy supply and demand, thereby stabilizing the grid and reducing the reliance on fossil fuels.

The thermal energy storage market is experiencing significant growth, driven by the increasing adoption of renewable energy sources and the need for more efficient and sustainable energy systems. The market’s expansion is bolstered by innovations in storage materials and technologies that improve heat retention and energy release efficiency, making TES solutions more attractive and economically viable.

One key growth factor in the thermal energy storage market is the rising demand for renewable energy integration. As more solar and wind power systems are installed, the need to manage their intermittent energy production has become crucial. TES provides a viable solution by storing excess energy generated during peak production times and releasing it when needed, thus ensuring a constant and reliable energy supply.

The demand for thermal energy storage is also fueled by increasing energy prices and the growing emphasis on reducing carbon emissions. Businesses and governments are investing in TES systems to lower energy costs and comply with global carbon reduction targets. For instance, Fourth Power secured $19 million in a Series A funding round in December 2023 for its thermophotovoltaic (TPV) thermal energy storage technology.

Opportunities in the TES market are abundant, particularly in the development and deployment of innovative technologies such as Miscibility Gap Alloy (MGA). MG Thermal raised A$8 million in a Series A funding round in 2023 for its MGA technology, which highlights the potential for significant advancements in storage capabilities and efficiency, paving the way for broader adoption and market penetration of thermal energy storage solutions.

Key Takeaways

• Global Thermal Energy Storage Market is expected to be worth around USD 57.7 billion by 2034, up from USD 29.6 billion in 2024, and grow at a CAGR of 6.9% from 2025 to 2034.
• Sensible heat storage dominates the Thermal Energy Storage Market with a significant share of 54.30%.
• Water is the most used storage material in the market, holding a share of 46.70%.
• Power generation is a primary application of Thermal Energy Storage, accounting for 48.20% of the market.
• Utilities are the largest end-users in the Thermal Energy Storage Market, also making up 48.20% of the sector.
• Europe dominated the Thermal Energy Storage sector, holding 35.20% of the market and generating revenues of USD 10.4 billion.

By Technology Analysis

Sensible heat storage dominates, holding 54.30% of the Thermal Energy Storage market.

In 2024, Sensible Heat Storage held a dominant market position in the By Technology segment of the Thermal Energy Storage Market, commanding a significant 54.30% share. This dominance is attributed to the technology’s cost-effectiveness and maturity compared to other thermal storage technologies.

Sensible Heat Storage systems, which operate by storing thermal energy in water, sand, or molten salts, have proven to be highly efficient for large-scale energy applications. These systems are particularly prevalent in industrial and residential heating and cooling applications, as well as in power generation sectors, where they contribute to stabilizing the grid and reducing dependency on fossil fuels.

The substantial market share held by Sensible Heat Storage is also a reflection of the extensive infrastructure and technological know-how that has been developed around these systems. As the global energy market continues to evolve towards more sustainable solutions, Sensible Heat Storage is expected to maintain a strong position, supported by ongoing innovations and investments in enhancing the efficiency and capacity of these storage solutions.

This segment’s robust performance underscores its critical role in the broader adoption and integration of renewable energy systems, marking it as a cornerstone in the transition toward more sustainable energy practices.

By Storage Material Analysis

Water is the primary storage material, accounting for 46.70% of the market.

In 2024, Water held a dominant market position in the By Storage Material segment of the Thermal Energy Storage Market, securing a 46.70% share. This dominance is largely due to water’s inherent properties as an efficient, cost-effective, and environmentally friendly storage medium.

Water-based storage systems, particularly in sensible heat storage applications, are favored for their simplicity and high specific heat capacity, which allows them to store and release large amounts of heat energy effectively.

The substantial market share of water in this segment reflects its widespread use in various applications, ranging from residential and commercial heating and cooling to industrial processes and power generation. The versatility of water as a storage material, coupled with its low cost and availability, makes it a preferred choice for many thermal storage systems, especially in regions with significant thermal energy requirements.

As the market continues to expand, driven by increasing energy demands and a shift toward renewable energy sources, water-based thermal energy storage solutions are expected to maintain their leading position. This segment’s robust performance highlights its essential role in enhancing energy efficiency and supporting the stability of energy systems more sustainably and cost-effectively.

By Application Analysis

Power generation leads applications, comprising 48.20% of the Thermal Energy Storage market.

In 2024, Power generation held a dominant market position in the By Application segment of the Thermal Energy Storage Market, with a 48.20% share. This leadership underscores the critical role of thermal energy storage (TES) in enhancing the efficiency and reliability of power systems, especially in grids heavily reliant on renewable energy sources. The integration of TES in power generation allows for the balancing of supply and demand, reducing the intermittency issues associated with renewable energies such as solar and wind.

The significant share held by power generation is indicative of the growing need to stabilize energy outputs in renewable energy systems. By storing excess energy during low demand and releasing it during peak periods, TES systems ensure a constant and reliable energy supply, crucial for maintaining grid stability. This capability not only supports the broader adoption of sustainable energy sources but also enables utilities to optimize energy production and reduce operational costs.

As the push toward decarbonization intensifies globally, the role of thermal energy storage in power generation is set to become even more vital. The ongoing advancements in TES technology aimed at increasing efficiency and reducing costs are likely to drive the growth of this segment, further maintaining its substantial market share.

By End-use Analysis

Utilities are the major end-users, similarly representing 48.20% of the market.

In 2024, Utilities held a dominant market position in the By End-use segment of the Thermal Energy Storage Market, with a 48.20% share. This significant market share is reflective of the essential role that thermal energy storage (TES) plays in utility operations, particularly in managing load and enhancing the efficiency of the power grid. Utilities utilize TES systems to mitigate the challenges posed by the variability of renewable energy sources and to meet peak load demands more effectively.

The prominence of utilities in this segment can be attributed to the growing need for improved load management strategies and the shift toward renewable energy integration. TES systems enable utilities to store excess energy produced during periods of low demand and dispatch it during peak usage times, thus balancing supply with demand and reducing the need for costly, less environmentally friendly peak power plants.

Furthermore, the adoption of TES by utilities is driven by the technology’s potential to reduce operational costs and enhance grid stability. This is particularly important in regions with high penetration of intermittent renewable energy sources. As the energy sector continues to evolve toward more sustainable practices, the utility segment’s reliance on advanced TES solutions is expected to grow, maintaining its dominance in the market.

Key Market Segments

By Technology

• Sensible Heat Storage
• Latent Heat Storage
• Thermochemical Storage

By Storage Material

• Water
• Molten Salts
• Phase Change Materials
• Others

By Application

• Power generation
• District Heating and Cooling
• Process Heating and Cooling
• Others

By End-use

• Utilities
• Commercial
• Industrial

Driving Factors

Increasing Adoption of Renewable Energy Sources

The surge in the adoption of renewable energy sources is a major driving factor for the Thermal Energy Storage (TES) market. As the world shifts towards more sustainable energy solutions, the intermittency of renewable sources like solar and wind presents challenges in energy management. TES systems provide a practical solution by storing excess energy generated during peak production times and releasing it when demand exceeds supply.

This not only ensures a stable energy supply but also enhances grid reliability and facilitates the integration of renewable energy into the power grid. With governments globally pushing for lower carbon footprints, the reliance on TES technologies is set to increase, propelling market growth and supporting the transition to green energy.

Restraining Factors

High Initial Investment Costs Limit Market Growth

One of the primary restraining factors for the Thermal Energy Storage (TES) market is the high initial investment required to deploy these systems. The setup of TES systems involves substantial upfront costs, including the cost of materials, technology, and installation, which can be a significant barrier for many potential users, particularly in less economically developed regions.

This financial barrier not only affects the adoption rates among smaller entities and individual users but also slows down the integration pace at larger scales. Despite the long-term savings and environmental benefits that TES systems offer, the initial financial outlay required remains a significant hurdle, impacting the broader deployment and acceptance of these energy storage solutions in the global market.

Growth Opportunity

Emerging Markets Offer Significant Expansion Opportunities

Emerging markets represent a significant growth opportunity for the Thermal Energy Storage (TES) market. As countries in Asia, Africa, and South America continue to industrialize and urbanize at a rapid pace, the demand for energy solutions that are both efficient and sustainable is increasing. TES systems can play a crucial role in these regions by improving energy security and managing the supply-demand balance more effectively.

The potential for integrating TES with renewable energy sources in these markets is particularly promising, given their often abundant solar and wind resources. By capitalizing on the need for energy infrastructure that supports economic growth while minimizing environmental impact, TES providers can tap into a lucrative and expanding segment of the global energy market.

Latest Trends

Advancements in Material Science Boost TES Efficiency

One of the latest trends in the Thermal Energy Storage (TES) market is the advancement in material science, particularly in developing and enhancing phase change materials (PCMs) and molten salts. These materials are crucial for improving the efficiency and capacity of TES systems. PCMs are designed to absorb and release heat during the process of melting and solidifying at specific temperatures, which greatly enhances the energy storage capacity per unit volume.

Molten salts, known for their high boiling points and thermal conductivity, are being optimized for better heat transfer and storage capabilities. These material advancements are making TES systems more effective and versatile, opening up new applications in both industrial and residential sectors, thereby driving market growth.

Regional Analysis

In 2024, Europe led the Thermal Energy Storage market with a 35.20% share, amounting to USD 10.4 billion.

The Thermal Energy Storage (TES) market exhibits varied growth dynamics across global regions, reflecting differing stages of energy infrastructure development and renewable integration. Europe holds a commanding position in the market, accounting for 35.20% of the global share and generating USD 10.4 billion in revenue. This dominance is bolstered by the region’s aggressive renewable energy targets, robust regulatory frameworks, and substantial investments in energy efficiency technologies.

North America follows, driven by rising demand for sustainable energy solutions and significant governmental incentives supporting renewable energy deployments. The Asia Pacific region presents rapid growth prospects, fueled by expanding industrial sectors and urbanization, particularly in emerging economies such as China and India. These countries are investing heavily in modernizing their energy systems and increasing their reliance on renewable sources.

Meanwhile, the Middle East & Africa and Latin America are experiencing steady growth, primarily due to increased awareness and government policies aimed at diversifying energy sources and enhancing energy security. The growth in these regions is expected to accelerate as technology costs decrease and local governments seek to harness abundant renewable resources, particularly solar energy. Each region’s market growth is shaped by its unique energy policies, economic conditions, and technological advancements in TES systems.

Key Regions and Countries

• North America
  • US
  • Canada
• Europe
  • Germany
  • France
  • The UK
  • Spain
  • Italy
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • South Korea
  • India
  • Australia
  • Rest of APAC
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America
• Middle East & Africa
  • GCC
  • South Africa
  • Rest of MEA

Key Players Analysis

In 2024, the global Thermal Energy Storage (TES) market witnessed significant contributions from key players such as Aalborg CSP, BrightSource Energy Inc., Caldwell Energy Company, CALMAC, and Cryogel, each playing a pivotal role in shaping industry dynamics.

Aalborg CSP, renowned for its expertise in concentrated solar power (CSP) solutions, continued to lead in innovation, focusing on enhancing the efficiency of solar thermal storage. Their projects, often based in regions with high solar irradiance, demonstrated how CSP can effectively store and manage solar energy, proving crucial for grid stability and renewable integration.

BrightSource Energy Inc., another major player in the CSP sector, further established its footprint by expanding into new markets and refining its technology to achieve higher thermal storage capacities. Their approach to integrating solar power with molten salt storage technology has set industry benchmarks for durability and performance, catering to the growing demand for sustainable and reliable energy solutions.

Caldwell Energy Company, specializing in energy storage and power generation, emphasized advanced turbine technologies that work seamlessly with thermal storage systems. Their solutions are particularly tailored for peak shaving and load balancing, addressing critical needs in energy-heavy industries.

CALMAC, known for its IceBank energy storage technology, leveraged its position by focusing on the building and HVAC sectors. Their ice-based systems demonstrated significant cost and energy consumption reductions, appealing to commercial facilities looking to manage cooling demands more efficiently.

Cryogel introduced innovative cryogenic energy storage solutions, utilizing low temperatures to store and release energy. This technology not only provided a unique angle in the market but also catered to specialized industries requiring low-temperature operations.

Top Key Players in the Market

• Aalborg CSP
• BrightSource Energy Inc.
• Caldwell Energy Company
• CALMAC
• Cryogel
• Deepchill Solutions Inc.
• Dunham-Bush Limited
• EVAPCO, Inc.
• FAFCO, Inc.
• Goss Engineering, Inc.
• Kraftblock GmbH
• Magaldi Green Energy
• Man Energy Solutions
• PCM Products Ltd.
• Siemens Gamesa
• Spirax Sarco Limited.
• Steffes, LLC
• Sunamp Ltd.
• Thermofin

Recent Developments

• In December 2024, Aalborg CSP formed a strategic joint venture with Alfa Laval, aimed at advancing Long Duration Energy Storage (LDES) solutions. This collaboration focuses on the development of molten salt heat exchanger technology, enhancing the efficiency and scalability of thermal energy storage systems.
• In August 2023, Kraftblock GmbH raised €20 million in a Series B funding round to scale thermal energy storage technology.

Report Scope