Thermal Energy Storage Market to Surpass USD 50.4 Billion by 2032 Driven by Clean Energy Demand

The global thermal energy storage market is witnessing a powerful surge, with its revenue standing at USD 23.4 billion in 2024 and projected to reach USD 50.4 billion by 2032. This significant growth reflects a robust compound annual growth rate (CAGR) of 10.20% during the forecast period from 2025 to 2032. As the world transitions to cleaner energy sources and seeks more efficient ways to manage power supply and demand, thermal energy storage (TES) systems are emerging as a critical solution.

Thermal energy storage refers to technologies that store excess thermal energy for later use, enabling energy balancing, grid stability, and increased efficiency of power systems. The rising adoption of renewable energy sources, such as solar and wind, is one of the key drivers of this market. These energy sources are intermittent by nature, and thermal storage offers an effective method to store surplus energy generated during peak times and release it during demand spikes or low-generation periods.

Industries and utilities across the globe are investing in TES technologies to improve the reliability of their energy systems. TES is increasingly being used in concentrated solar power (CSP) plants, district heating and cooling, and HVAC systems in commercial and residential buildings. As energy demands rise, especially in urban areas, the need to optimize power consumption and reduce carbon emissions becomes more pressing. TES helps reduce reliance on fossil fuel-based peaking power plants, thereby supporting decarbonization efforts.

In particular, the use of molten salt-based TES in CSP plants has gained notable traction. Molten salt systems offer the advantage of storing high amounts of thermal energy at relatively low costs, while also maintaining stable operating temperatures. This makes them ideal for utility-scale solar energy projects in regions with high solar irradiance, such as the Middle East, North Africa, and parts of the U.S. Southwest.

Furthermore, advancements in phase change materials (PCMs) and thermochemical storage are opening up new opportunities in the market. These technologies allow for more compact, efficient, and cost-effective solutions, making TES feasible for a broader range of applications, including residential and commercial buildings, data centers, and even industrial process heating.

Governments and regulatory bodies are also playing a pivotal role in driving market growth. Policy incentives, subsidies for renewable integration, and stringent energy efficiency regulations are encouraging the adoption of TES systems. In the U.S. and Europe, tax credits and funding for clean energy infrastructure are further accelerating deployment.

While the outlook is promising, the thermal energy storage market still faces a few challenges. High upfront installation costs and the need for skilled labor for system integration can deter some potential users. However, the long-term cost savings and operational efficiency provided by TES systems are gradually offsetting these concerns.

Regionally, Europe and North America have been early adopters, investing heavily in energy storage as part of their clean energy transition plans. However, Asia-Pacific is emerging as a high-growth region, driven by rapid urbanization, industrialization, and renewable energy development in countries such as China and India. These regions are expected to offer immense opportunities for TES providers in the coming years.