Thermal Energy Storage Market

The Thermal Energy Storage Market is valued at USD 2.7 Bn in 2026 and is projected to reach USD 3.6 Bn, growing at a CAGR of 4% by 2033.

Market Analysis in Brief

There continues to be great demand for energy around the world on account of heightened urbanization, and industrialization. As global population grows and application areas expand, the need for more efficient energy storage systems is expected to increase. The use of thermal energy storage (TES) systems aids in overcoming the challenges of intermittency and provides a more stable and flexible energy supply. Given the extensive application of this technology in the region, Europe will especially be the largest thermal energy storage market in the years ahead, shows research.

Key Report Findings

• The thermal energy storage market is expected to achieve a valuation of over USD 3.6 Bn by 2033
• The largest global thermal energy storage company is EnergyNest, based in Norway
• The molten salt TES system is the most widely used technology
• The commercial and industrial sector is expected to be the largest application segment of thermal energy storage industry
• Europe to account for the majority market share over the forecast period

Growth Drivers

Increasing Demand for Solar Energy Generation

Decarbonization of the energy sector, and carbon emission reductions to limit global climate change are among the most dominant goals for various governments, as well as energy and utilities authorities around the world. According to the International Renewable Energy Agency (IRENA), accelerating renewable energy deployment, as well as electrification and improving electric grid energy efficiency, can aid in achieving over 90% of the energy-related CO₂ emission reductions needed to reach the Paris Climate goals by 2050. As the boom around solar energy grows intensely, the global thermal energy storage market is expected to experience notable growth in the future.

The global renewable energy installed capacity was 176 GW higher in 2020 than it was in 2019, a surge of 7.4% according to the International Renewable Energy Agency (IRENA). Due to a recovery in the hydropower sector, energy generation growth has regressed to its long-term pattern. Solar power continues to increase rapidly; in the coming years, it is expected to surpass biofuels as the third-largest source of renewable electricity generation. In 2021, solar and wind energy generation climbed by 28% and 11%, respectively. These two sources of energy have dominated renewable energy generation since 2019, accounting for 73% of growth.

Favorable Policy Structure

Strong federal policy mechanisms encourage the adoption of solar energy systems such as the Investment Tax Credit for solar power, and the increasing demand for clean energy from both the public and private sectors across all major economies in North America, Europe, and the Asia Pacific regions. Thermal energy storage involves the cooling or heating of a storage medium, such as sand, rocks, water, or molten salt, to store solar thermal energy for eventual use in cooling and heating applications, as well as in power generation. Thermal energy storage is critical for electricity storage in concentrating solar power plants, where solar heat may be stored and used to generate electricity when the sun is not shining. This allows CSP plants to run without interruption. This continues to favor the expansion of thermal energy storage market.

Increased Use of Sensible Heat Storage

Sensible heat storage is expected to be the fastest-growing segment of the thermal energy storage market over the forecast period. The specific heat of a storage medium, which is kept in storage tanks with good thermal insulation, is used to store thermal energy in the form of sensible heat. Molten salt is the most often used commercial heat storage medium, with a variety of commercial and industrial applications. Moten salts offer outstanding thermal characteristics and have been employed in over half of all operational thermal energy projects to date.

Furthermore, when it comes to economies of scale, sensible heat storage technology is the most cost-effective. This is due to increased demand for solar thermal systems, as well as its usefulness in large-scale HVAC systems. A crucial characteristic of this technology is the ability to reversibly charge and discharge for an endless number of cycles, which is expected to help increase product penetration. Sensible heat storage material has a poor storage capacity per unit of storage volume.

Growth Challenges  

High Initial Costs, and Availability of Alternative Technologies

The cost of materials, installation, and maintenance of thermal energy storage systems can be rather high. This fact could deter its implementation by certain businesses. Moreover, a lack of awareness of the benefits associated with thermal energy storage systems could also deter their adoption. Additionally, the availability of alternative technologies, such as pumped hydro storage and battery storage, which may be a bit more familiar for customers and have lower initial costs, are also elements that could potentially hinder the further expansion of the global thermal energy storage market in the years ahead.

Overview of Key Segments

The single-tank thermocline system, two-tank indirect system, and two-tank direct system are three of the most common CSP thermal energy storage technologies. Better reliability increases overall efficiency, lower investment and operating expenses, and cost-effective operations are all advantages of thermal energy storage in CSP facilities. It can also help to minimise carbon dioxide emissions. As a result, growth of the thermal energy storage market is projected to be fuelled by the integration of thermal energy storage solutions in CSP systems.

Growth Opportunities Across Regions

Europe Leads with Greater Reliance on Renewable Energy

Europe was the leading region for renewable energy in 2021. Spain was the largest contributor to the thermal energy storage market in this region with its vast number of operational TES projects, as well as the presence of key players like Abengoa Solar. For over a decade, Europe has been implementing various thermal energy storage systems throughout urban areas, in countries such as Spain, Austria, as well as in Northern and Central Europe. High energy use during the wintry months and the exploration of renewable district heating methods are the main drivers of this market. To accommodate ever-increasing seasonal and short-term storage demand, this region has even more planned large-scale thermal storage projects, the majority of which will use molten salt technology and subsurface hot water tanks. These projects will most likely act as multifunctional energy centres for future district heating sources, among other uses.

The Sun2Store thermal energy storage project in Spain was awarded to Malta Inc., a grid-scale thermal energy storage provider, by the European Union and the European Investment Bank in January 2022. It's a 1,000-MWh/ten-hour energy storage device that combines molten salt and pumped heat technology. The idea will be developed in collaboration with Alfa. Such advances are expected to have a substantial impact on Europe’s thermal energy storage industry.

Key Market Players – Thermal Energy Storage Landscape

Some key companies in the global thermal energy storage market include:

• Abengoa S.A.
• Baltimore Aircoil Company
• Burns & McDonnell
• CALMAC Manufacturing Corp.
• BrightSource Energy Inc.
• Cryogel Thermal Energy Systems
• DN Tanks Inc.
• Evapco Inc.
• Ice Energy Technologies Inc.
• Steffes Corporation
• Siemens Energy AG / Siemens Gamesa Renewable Energy
• SaltX Technology Holding AB
• EnergyNest AS
• Antora Energy
• Rondo Energy

 The Global Thermal Energy Storage Market is Segmented as Below:

By Technology
• Sensible Heat
• Latent Heat
• Thermochemical

By Material
• Water
• Molten Salt
• Phase Change Materials (PCM)
• Others

By Application
• District Heating and Cooling Systems
• Process Heating and Cooling
• Power Generation

By End-User
• Residential
• Commercial
• Industrial

By Region
• North America
• Europe
• Asia Pacific
• Latin America
• Middle East and Africa