Thermal Energy Storage Market Size (2024–2030)

The Global Thermal Energy Storage Market was valued at USD 7.1 billion in 2023 and is projected to grow at a CAGR of 11.5% from 2024 to 2030, reaching approximately USD 15.2 billion by 2030.

Thermal energy storage (TES) systems store heat energy for later use, supporting various applications such as power generation, heating, and cooling systems, which makes them critical for efficient energy use and resource management. The market growth is driven by rising energy demand, especially for renewable energy integration and sustainable HVAC systems in residential and commercial buildings.

TES technologies are highly adaptable, serving both large-scale industrial applications and small residential or commercial systems. Governments worldwide are also promoting TES as part of their renewable energy targets and energy efficiency initiatives. With advancements in storage materials and a growing focus on smart energy management, the TES market is expected to experience robust growth during the forecast period.

Key Market Insights:

Sensible heat storage dominates the technology segment, accounting for approximately 50% of the market share due to its widespread application in large-scale thermal power plants.

The power generation application held a 40% revenue share in 2023, driven by TES’s role in stabilizing grid supply and demand, especially with solar thermal energy systems.

Europe leads the market, representing 35% of global revenue, attributed to substantial investments in sustainable heating and cooling infrastructure and renewable energy projects.

Latent heat storage technology is gaining traction, with a projected 15% CAGR due to its efficient energy density, which is beneficial for compact and space-constrained installations.

Global Thermal Energy Storage Market Drivers:

Increasing Renewable Energy Integration is driving the market growth:

As the global energy landscape shifts towards renewable sources like solar and wind, the demand for thermal energy storage systems is increasing. Renewable energy sources are intermittent, producing energy only when conditions are favorable (e.g., sunlight for solar or wind for turbines). TES systems help stabilize energy supply by storing excess thermal energy generated during peak production periods and releasing it when energy demand is high or when renewable generation dips. For instance, concentrated solar power (CSP) plants utilize TES to store solar-generated heat, enabling continuous power generation even during non-sunny periods. This capability supports grid stability and reduces reliance on fossil fuel-based backup systems. With renewable energy expected to account for approximately 30% of global power by 2030, TES will play a vital role in facilitating this transition and enhancing grid reliability.

Rising Demand for Energy-Efficient HVAC Solutions is driving the market growth:

The demand for energy-efficient heating, ventilation, and air conditioning (HVAC) systems in commercial, residential, and industrial sectors is growing. Thermal energy storage systems are increasingly integrated into HVAC applications to optimize energy usage. TES can store excess thermal energy when demand is low, then use this stored energy to reduce peak power consumption, lowering costs and improving efficiency. The use of TES in HVAC systems is particularly valuable for large commercial and industrial buildings, where managing heating and cooling loads is crucial for energy efficiency. In regions with high electricity demand charges, TES helps alleviate load on the grid during peak hours, resulting in substantial cost savings. The global HVAC market is projected to grow significantly in the coming years, creating a favorable environment for TES adoption, especially with governments pushing for green building certifications and sustainable construction practices.

Supportive Government Policies and Incentives is driving the market growth:

Governments around the world are actively promoting TES adoption through policies, incentives, and research funding as part of their efforts to increase energy efficiency and reduce greenhouse gas emissions. For example, the European Union’s Green Deal and Renewable Energy Directive both support TES as an essential technology for decarbonizing heating and cooling systems. These policies encourage the deployment of TES in urban heating and cooling networks, enhancing energy efficiency and reducing reliance on fossil fuels. In the United States, federal and state incentives for TES projects are also on the rise, particularly for projects associated with renewable energy integration. Emerging economies, such as those in the Asia-Pacific region, are also investing in TES as part of their renewable energy strategies. Supportive policies help reduce the financial burden of TES installation, fostering market growth and encouraging innovation in new TES technologies and applications.

Global Thermal Energy Storage Market Challenges and Restraints:

High Initial Installation Costs is restricting the market growth:

The high upfront costs associated with thermal energy storage systems pose a challenge to market growth. TES systems require significant investment in equipment, materials, and installation, which can be prohibitive for smaller businesses and residential users. While large commercial and industrial facilities may have the financial capacity to invest in TES, smaller entities may struggle to justify the initial costs despite potential long-term savings. The cost of materials, especially for latent heat storage systems that use phase-change materials (PCMs), can be substantial. Additionally, the complexity of installation and the need for specialized expertise contribute to overall costs. Although government incentives can help offset these costs, the financial barrier remains a limiting factor for widespread adoption, particularly in price-sensitive regions.

Technical Challenges and Lack of Standardization is restricting the market growth:

Thermal energy storage technologies face technical challenges, including efficiency losses, heat leakage, and material degradation over time. Sensible heat storage systems, for example, require large storage volumes, which may not be feasible in urban areas with space constraints. Similarly, latent heat storage technologies, although compact, may encounter material issues such as phase segregation, which can impair efficiency. The lack of standardization in TES systems also affects market adoption. Different applications and regions have varying requirements, making it difficult to develop a one-size-fits-all solution. The absence of standardized regulations can result in inconsistent performance and safety standards, potentially hindering the growth of TES in some regions. Addressing these technical challenges and moving towards standardized solutions will be essential for the TES market to achieve sustainable growth.

Market Opportunities:

The global thermal energy storage market presents numerous growth opportunities, particularly as industries and governments focus on sustainable energy management and carbon reduction goals. The ongoing global shift towards renewable energy sources, especially solar power, creates a significant need for energy storage systems that can support reliable energy supply. Concentrated solar power (CSP) plants, for instance, rely heavily on TES to ensure continuous power generation, which opens avenues for TES providers to cater to utility-scale projects. In the commercial and residential sectors, the growing focus on energy-efficient buildings and green certifications fuels demand for TES systems. Green building certifications like LEED encourage the adoption of sustainable energy solutions, and TES systems play a pivotal role in meeting energy efficiency criteria. The trend toward smart city initiatives and urban heating networks in developed countries also offers opportunities, as TES can provide a reliable source of heat for district energy systems. Technological advancements in TES materials, such as phase-change materials and thermochemical storage, are enhancing storage capacities and efficiencies, which could make TES more viable for a wider range of applications. As the global market becomes more aware of the benefits of TES in stabilizing energy systems and achieving cost savings, demand for TES in both new installations and retrofits is expected to rise. Additionally, the intersection of TES with smart grid technology further amplifies its value proposition, allowing real-time energy management and efficient load distribution.

THERMAL ENERGY STORAGE MARKET REPORT COVERAGE:

Thermal Energy Storage Market Segmentation: By Technology

• Sensible Heat Storage

• Latent Heat Storage

• Thermochemical Storage

Sensible heat storage is the dominant technology, representing 50% of the market share in 2023 due to its suitability for large-scale applications in CSP plants and district heating systems.

Thermal Energy Storage Market Segmentation: By Application

• Power Generation

• Heating and Cooling

• Industrial

Power generation holds the largest share, contributing 40% of the market revenue in 2023. TES is essential in balancing grid loads and supporting renewable energy integration, especially in CSP plants.

Thermal Energy Storage Market Segmentation: By Region

• North America

• Europe

• Asia-Pacific

• Latin America

• Middle East & Africa

Europe leads the TES market with a 35% share due to strong governmental support, advanced district heating infrastructure, and investments in sustainable energy projects. The European Union’s policies on renewable energy and energy efficiency have fostered a conducive environment for TES adoption.

COVID-19 Impact Analysis:

The COVID-19 pandemic initially impacted the thermal energy storage market as construction projects slowed, and budgets were redirected to essential services. However, the recovery phase emphasized the importance of sustainable energy, leading to renewed investments in TES for renewable energy support and efficient heating and cooling solutions. The pandemic accelerated the adoption of green energy technologies as governments included them in recovery initiatives to promote economic resilience and environmental sustainability. TES has emerged as a critical component in energy resilience planning, with applications in grid stability and backup power for healthcare and essential services. As industries and governments prioritize sustainable energy solutions, TES demand is expected to rise significantly in the post-pandemic era, supporting the shift towards carbon-neutral energy systems.

Latest Trends/Developments:

Recent advancements in the TES market include the development of advanced thermochemical materials, integration with renewable microgrids, and innovations in compact energy storage solutions. Thermochemical storage materials, with their high energy density and reversible chemical reactions, are gaining attention for industrial and large-scale applications. Integration with microgrids enhances decentralized energy management, making TES systems valuable for energy resilience. The residential sector is also seeing an uptake in compact TES systems, especially in regions with high renewable energy deployment. These trends are transforming TES into a versatile and essential component of the global energy transition.

Key Players:

1. Abengoa Solar S.A.

2. BrightSource Energy, Inc.

3. Caldwell Energy Company

4. Cryogel Thermal Energy Storage

5. DN Tanks

6. EnergyNest

7. Siemens Gamesa Renewable Energy S.A.

8. SolarReserve, Inc.

9. Steffes Corporation

10. Terrafore Technologies, LLC