Thermal Energy Storage Market Size (2025–2030)

The Thermal Energy Storage Market was valued at USD 6.8 Billion in 2024 and is projected to reach a market size of USD 14.11 Billion by the end of 2030. Over the forecast period of 2025-2030, the market is projected to grow at a CAGR of 12.94%.

The Thermal Energy Storage (TES) market focuses on technologies that store thermal energy for later use, enabling more efficient energy management. These systems help balance energy supply and demand by storing heat or cold during off-peak hours and releasing it when needed.

TES plays a crucial role in enhancing the flexibility and reliability of energy systems, especially when integrated with renewable energy sources like solar and wind. It is widely used in power generation, district heating and cooling, and industrial processes. Common technologies in this market include sensible heat storage, latent heat storage, and thermochemical storage. Materials like water, molten salts, and phase change materials (PCMs) are frequently used to store and release energy. Thermal energy storage helps reduce energy costs and carbon emissions by shifting energy use to more favorable times. The market is gaining traction in both developed and emerging economies due to rising energy efficiency goals. Governments and industries are increasingly adopting TES solutions to improve grid stability and reduce fossil fuel dependency.

Key Market Insights:

Europe accounted for approximately 38% of the global thermal energy storage market share in 2024. The region’s leadership is driven by strong renewable energy integration and supportive energy policies.

In 2024, Asia-Pacific witnessed a year-over-year growth of 15.2%, fueled by rapid urbanization and industrialization. Countries like China and India are heavily investing in grid-scale energy storage.

The Sensible Heat Storage segment contributed to nearly 55% of the total market revenue in 2024. Its cost-effectiveness and maturity made it a preferred choice across multiple applications.

Molten salt systems held about 48% market share due to their high thermal capacity and compatibility with CSP (Concentrated Solar Power) plants. These systems are particularly prevalent in utility-scale energy projects.

Around 42% of thermal energy storage demand in 2024 came from the power generation sector. This was driven by increasing reliance on intermittent renewable sources like solar power, requiring reliable storage solutions.

Market Drivers:

Thermal energy storage is gaining traction due to growing renewable energy integration.

As the world shifts toward cleaner energy sources, renewable technologies like solar and wind are being deployed at a rapid pace. However, these sources are intermittent and require efficient storage solutions to ensure stable energy supply. Thermal energy storage helps bridge the gap between energy production and consumption by storing excess heat or cold for later use. This makes it a critical component in stabilizing power grids and enhancing energy reliability. Governments and utilities are increasingly investing in TES systems to support their decarbonization goals and improve energy efficiency. This alignment with sustainability initiatives is accelerating the adoption of thermal storage technologies globally.

Increasing demand for efficient energy management in industrial and commercial sectors is boosting the market.

Industries and commercial facilities consume large amounts of energy for heating, cooling, and process operations. Managing energy costs and reducing peak demand charges have become priorities, leading to a surge in interest for thermal energy storage systems. TES allows these sectors to store energy when it’s cheaper and use it during peak hours, lowering operational expenses. Additionally, it helps in meeting energy efficiency regulations and sustainability targets. The technology is being widely adopted in sectors like food processing, chemicals, and district cooling networks. This practical utility across diverse industries is fueling consistent market growth.

Market Restraints and Challenges:

Thermal energy storage systems often involve substantial upfront costs related to installation, material sourcing, and integration with existing energy infrastructure. These costs can be a major barrier, especially for small- and medium-scale enterprises or developing regions. Additionally, the need for specialized storage materials, such as molten salts or phase change materials, increases overall system complexity and cost. Retrofitting TES into older energy systems or buildings can also be technically challenging and financially unfeasible. In many cases, decision-makers prefer faster-return alternatives, slowing down adoption. Without strong policy incentives or subsidies, widespread deployment of thermal storage technologies remains constrained.

Market Opportunities:

The thermal energy storage market presents significant opportunities driven by the global shift toward renewable energy and decarbonization. As more countries invest in solar and wind infrastructure, the need for efficient energy storage solutions like TES continues to rise. Emerging economies offer vast potential, particularly where grid reliability is low and energy demand is growing rapidly. Urbanization and the push for sustainable cities are opening new opportunities in district heating and cooling using TES. Innovations in compact storage materials and modular designs are making TES more adaptable for residential and commercial buildings. Additionally, government incentives and clean energy mandates are creating a favorable environment for large-scale adoption and investment in thermal storage technologies.

THERMAL ENERGY STORAGE MARKET REPORT COVERAGE:

Thermal Energy Storage Market Segmentation:

Thermal Energy Storage Market Segmentation by Application

• Power Generation
• District Heating & Cooling
• Process Heating (Industrial)
• Others (e.g., greenhouse farming, space heating)

Thermal energy storage is extensively used in power generation to support renewable sources like solar and wind by storing excess energy and releasing it during peak demand. In 2024, this segment held the largest market share due to the increasing deployment of thermal storage in Concentrated Solar Power (CSP) plants. It enables grid stability and improves dispatchability, making renewable power more reliable. Governments and utilities are heavily investing in TES for power generation to meet sustainability targets and ensure energy security.

District heating and cooling systems are increasingly adopting thermal energy storage to manage fluctuating thermal demands efficiently. The segment is witnessing rapid growth, especially in urban areas aiming for smart and energy-efficient infrastructure. TES helps reduce energy costs and emissions by shifting energy use to off-peak times. This growth is further fueled by expanding urbanization and policy support for low-carbon heating and cooling solutions.

Thermal Energy Storage Market Segmentation by Technology Type

• Sensible Heat Storage
• Latent Heat Storage
• Thermochemical Storage

Sensible Heat Storage relies on storing thermal energy by raising the temperature of a solid or liquid, typically using materials like water or rocks. Its simplicity, low cost, and proven efficiency make it widely adopted across various applications, especially in district heating and power generation. In 2024, it accounted for the largest share due to its technological maturity and ease of integration. Many existing systems favor this method for its scalability and minimal maintenance needs.

Thermochemical storage uses reversible chemical reactions to absorb and release thermal energy, offering higher energy density than other methods. It is gaining popularity due to its potential for long-duration storage and minimal thermal losses over time. Although still emerging, advancements in material science and growing R&D investments are accelerating its adoption. Its suitability for large-scale renewable integration is making it the most rapidly expanding segment in the market.

Thermal Energy Storage Market Segmentation by Storage Material

• Water
• Molten Salt
• Phase Change Materials (PCMs)
• Others (e.g., rocks, sand)

Molten salts are widely used in thermal energy storage due to their high heat capacity and ability to retain heat for long durations. In 2024, they held the largest market share, especially in Concentrated Solar Power (CSP) applications. Their reliability, stability at high temperatures, and ability to support grid-scale storage make them the preferred choice for utility projects. This dominance is further supported by successful deployment in large-scale energy plants across Europe and the Middle East.

PCMs absorb and release energy by changing their physical state, typically from solid to liquid, offering efficient thermal regulation. Their compact storage capability and high energy density make them attractive for residential, commercial, and HVAC applications. As the demand for space-saving and energy-efficient solutions grows, PCMs are rapidly gaining traction. Innovations in material composition and decreasing costs are driving their accelerated adoption across multiple sectors.

Thermal Energy Storage Market Segmentation: Regional Analysis:

• North America
• Europe
• Asia-Pacific
• South America
• Middle East & Africa

Europe led the global market due to its strong focus on renewable energy integration, energy efficiency, and stringent carbon reduction targets. The region has seen extensive deployment of thermal storage systems, particularly in district heating and Concentrated Solar Power (CSP) plants. Countries like Germany, Denmark, and Spain have made significant investments in both residential and utility-scale TES projects. Supportive government policies and well-developed energy infrastructure have cemented Europe’s leadership in the market.

Asia-Pacific is experiencing rapid growth in thermal energy storage due to expanding urbanization, industrialization, and rising energy demand. Countries such as China, India, and Japan are increasingly investing in clean energy technologies, including thermal storage, to stabilize their grids and reduce emissions. The region also benefits from favorable government initiatives and growing awareness of energy efficiency. This momentum is expected to continue as infrastructure development and renewable energy projects accelerate across the region.

COVID-19 Impact Analysis:

The COVID-19 pandemic initially disrupted the thermal energy storage market due to supply chain interruptions, project delays, and reduced industrial activity. Many construction and infrastructure projects involving TES systems were postponed or canceled, impacting market momentum in 2020 and early 2021. However, the crisis also highlighted the need for resilient and flexible energy systems, leading to renewed interest in energy storage solutions. Governments began including clean energy and grid modernization in their economic recovery plans, which indirectly supported the TES market. Remote work and increased energy consumption in residential sectors also sparked discussions around decentralized thermal storage. Post-pandemic, the market began to recover steadily, driven by stimulus packages, increased climate commitments, and acceleration in renewable energy adoption.

Latest Trends and Developments:

The thermal energy storage market is witnessing a surge in innovation, particularly in material advancements such as high-performance molten salts and phase change materials (PCMs). These materials are being engineered to improve heat retention, reduce energy losses, and extend operational lifespans. There is a growing trend toward integrating TES with renewable energy systems, especially in solar power plants and smart grid infrastructures. Industrial players are also exploring compact and modular storage systems for decentralized energy applications in buildings and urban developments. Automation and smart controls using IoT and AI are being implemented to optimize thermal charge-discharge cycles. Furthermore, hybrid systems combining thermal storage with battery or hydrogen storage are gaining attention for their multi-purpose energy balancing capabilities.

Key Players in the Market: