Report Description

Forecast Period


Market Size (2022)

USD 18.89 Billion

CAGR (2023-2028)


Fastest Growing Segment

Latent Heat Storage

Largest Market


Market Overview

The global thermal energy storage market was valued at USD18.89 billion in 2022 and is projected to reach USD49.72 billion by 2028, exhibiting a CAGR of 9.25% during the forecast period from 2024 to 2028. Thermal energy storage refers to the storage of energy by utilizing various materials that store and release energy based on temperature fluctuations. This technology finds its applications in heat pumps, power plants, and waste management systems. By leveraging thermal energy storage systems, energy demand during peak hours can be reduced, resulting in lower carbon dioxide emissions and decreased energy consumption for end consumers. Thermal energy storage is extensively used in thermal power plants and solar power plants to ensure a steady power supply, even during nighttime, and to harness heat in process industries. Furthermore, the increasing adoption of renewable power generation and the growing demand for HVAC thermal energy storage systems present another compelling factor. Additionally, the rising concern over greenhouse gas emissions and escalating fuel prices are anticipated to further stimulate the demand for advanced thermal energy storage systems.

Key Market Drivers

Demand for energy storage for supplementing ever-increasing solar energy generation

The decarbonization of the energy sector and the reduction of carbon emissions to combat global climate change are crucial objectives for governments, energy authorities, and utilities worldwide. According to IRENA, the accelerated deployment of renewable energy, coupled with electrification and improved energy efficiency of the electric grid, can deliver more than 90% of the necessary carbon dioxide (CO2) emission reductions by 2050, in line with the Paris Climate targets. In 2019, global renewable energy installed capacity increased by 176 GW, representing a growth rate of 7.4% compared to 2018. The hydropower sector witnessed a recovery, contributing to the overall generation growth. Solar generation surpassed bioenergy in 2018, becoming the third largest source of renewable electricity generation. Solar and wind generation saw significant increases of 28% and 11% respectively. Together, these two sources accounted for 73% of renewable energy growth since 2014. Solar energy experienced a remarkable average annual growth rate of 49% globally, driven by strong federal policy mechanisms, such as the Investment Tax Credit for solar power, and rising demand for clean energy across major economies in North America, Europe, and the Asia Pacific region. In China, renewable energy sources contributed to 26.7% of the country's total power generation in 2018, with hydro, wind, PV, and biomass making significant contributions. China has set ambitious solar targets, aiming to reach at least 210 GW, and potentially up to 270 GW, by 2020. The Government of India has also set a target of installing 175 GW of renewable energy capacity by 2022, including wind, bio power, solar, and small hydropower. Spain has raised its renewable energy target to 74% by 2030 and plans to add 157 GW of renewable energy capacity. Concentrating Solar Power (CSP) generation increased by an estimated 34% in 2019 and is expected to continue growing. Continuous policy support for CSP projects across various regions, including the Middle East and Africa, Asia Pacific, and North America, will contribute to this growth. Thermal energy storage plays a vital role in CSP plants, enabling the storage of solar heat for electricity production during periods without sunlight. This ensures uninterrupted operations and offers advantages such as increased reliability, improved overall efficiency, reduced costs, and lower carbon dioxide emissions. Integration of thermal energy storage in CSP plants is expected to drive market growth.

Rising demand for energy

The demand for electricity, driven by growing commercialization and heightened usage during peak hours, alongside the need for heating and cooling applications in smart infrastructure, is fueling market growth. Supportive government policies in developed and developing nations for renewable energy technologies further contribute to this expansion. Many countries worldwide are investing in renewables, stimulating market growth across diverse economies. Investments in solar and wind power are not only creating jobs but also reducing emissions and fostering innovation. One of the primary goals of numerous governments is to curtail carbon emissions in the energy sector, thus mitigating global climate change. This objective has led to improved energy efficiency in electric grids, resulting in reduced carbon dioxide emissions. For instance, the Government of India aims to install 175 gigawatts of renewable energy capacity by 2022, encompassing wind, biopower, solar, and hydro power sources. Similarly, the Spanish government plans to add 157 gigawatts of renewable energy capacity by 2030. The utilization of thermal energy storage offers enhanced reliability, reduced investment costs, increased overall efficiency, and lower operational expenses. Furthermore, the rapid growth of decentralized renewable energy technologies will act as a driving force for the market.


Download Free Sample Report

Key Market Challenges

High initial set-up costs varying with technology 

The cost of thermal energy storage technologies varies depending on the application, size, and thermal insulation technology. Phase change material (PCM) and thermo-chemical storage-based systems generally have higher costs compared to the storage capacity they provide. Storage systems typically account for around 30% to 40% of the total system cost. Ongoing research in energy storage technologies aims to reduce upfront capital requirements, making thermal energy storage more competitive in the near future. Sensible heat storage offers a storage capacity ranging from 10 kWh/t to 50 kWh/t, with storage efficiencies between 50% and 90%, depending on the specific heat of the storage medium and thermal insulation technologies. PCMs can provide higher storage capacity and efficiencies in the range of 75% to 90%. In most cases, storage is based on solid or liquid phase change, with energy densities around 100 kWh/m3 (e.g., ice). Thermal chemical storage (TCS) systems can achieve storage capacities of up to 250 kWh/t, with operation temperatures exceeding 300°C and efficiencies ranging from 75% to nearly 100%. The cost of a complete sensible heat storage system ranges between Euros 0.1/kWh and 10/kWh (USD 0.11/kWh and 10.7/kWh), depending on the size, application, and thermal insulation technology. Costs for PCM and TCS systems are generally higher. These systems involve significant expenses associated with the heat (and mass) transfer technology required to achieve sufficient charging or discharging power. Costs for latent heat storage systems using PCMs range from Euros 10/kWh to 50/kWh (USD 10.7/kWh to 53.5/kWh), while TCS costs are estimated to range from Euros 8/kWh to 100/kWh (USD 8.56/kWh to 107/kWh). The economic feasibility of thermal energy storage heavily depends on the application and operational requirements, including the number and frequency of storage cycles.

High prices of TES systems may restrain industry growth

The significant capital investment required for constructing TES systems has been a major constraint on market expansion. However, the technology has become more competitive due to improvements and standardization in the manufacturing process, as well as the increasing demand for advanced storage materials. Furthermore, the positive perspective on carbon emissions reduction and the development of CSP plants are expected to drive market growth in the coming years.

Key Market Trends

Shift towards renewable energy generation is a trend

Numerous countries worldwide are transitioning towards renewable energy generation and embracing thermal energy storage to achieve carbon reduction goals. Furthermore, governments, associations, and universities are actively investing in research and development to de