Thermal Energy Storage Market Outlook: Regional Opportunities and Challenges

The global thermal energy storage (TES) market was valued at USD 4.1 billion in 2019 and is projected to grow at a compound annual growth rate (CAGR) of 9.45% from 2020 to 2027. The growing shift towards renewable energy generation, particularly in concentrated solar power, and rising demand for TES systems in HVAC (heating, ventilation, and air conditioning) are among the key factors driving the growth of the market. Additionally, the increasing need for energy efficiency, coupled with the ongoing global efforts to improve energy utilization, is expected to positively influence the demand for TES systems.

For example, in September 2018, the Canadian government updated its Commercial Energy Conservation and Efficiency Program, offering USD 15,000 worth rebates for energy upgrades in the commercial sector, encouraging the adoption of more energy-efficient systems like TES.

The U.S. is expected to see substantial growth in TES installations, owing to the growing number of thermal energy storage projects across the country. As of 2018, the U.S. accounted for 33% of the 18 under-construction TES projects globally and 41% of the total 1,361 operational projects, highlighting its significant role in the global TES market. The presence of key industry players in the U.S. is also expected to further boost the growth of the TES market.

The U.S. Department of Energy (DoE) evaluates TES systems based on criteria like safety, reliability, and cost-effectiveness, ensuring they adhere to strict environmental regulations and industry standards. The increasing emphasis on clean energy is prompting governments worldwide to invest in innovative energy storage systems to drive the transition towards renewable energy.

Gather more insights about the market drivers, restrains and growth of the Thermal Energy Storage Market

Regional Insights

Europe:

Europe accounted for the largest revenue share of 30.1% in 2019 and is expected to maintain its lead over the forecast period. The region is known for its extensive use of TES systems across various sectors, including space heating, water heating, district heating and cooling, and power generation. Spain is a key contributor to the regional market's growth, owing to its high number of operational TES projects, along with the presence of major industry players like Abengoa Solar.

The European government has developed the European model for energy storage, which efficiently stores and distributes energy based on population density in specific regions. Additionally, Germany continues to make significant investments in advanced research related to energy storage, particularly in residential solar panel systems.

The UK's SUPERGEN Energy Storage Hub, established by the Engineering and Physical Sciences Research Council (EPSRC), brings together seven universities and 14 companies, including industry giants such as EDF Energy, National Grid, and Jaguar Land Rover, to focus on research and development in energy storage technologies.

North America:

North America held the second-largest revenue share in 2019, driven by efforts to reduce the need for extensive power generation equipment during peak demand hours. The U.S. government's focus on renewable energy generation and increasing research activities in energy storage are expected to significantly fuel the market's growth in the region.

The U.S. government has introduced multi-year extensions on tax credits for the installation and operation of renewable energy plants, particularly for systems using concentrated solar power (CSP) and thermal energy storage. The state of New York also established the Battery and Energy Storage Technology (NY-BEST) commercialization center, contributing to the validation of energy storage technologies for both residential and commercial applications.

Asia Pacific:

The Asia Pacific region is anticipated to experience the highest growth rate, with a projected CAGR of 14.3% over the forecast period. Countries such as China, India, South Korea, Japan, Indonesia, and Malaysia are witnessing rapid urbanization and population growth, driving the demand for energy storage solutions.

These countries face challenges related to unreliable power grids and insufficient infrastructure, creating a strong need for TES systems. This demand, coupled with the ongoing investments by industry players in these markets, is expected to significantly boost the adoption of TES and grid distribution systems in the region.

India:

India has emerged as a key market for renewable energy systems. In the 2017-18 period, the country saw an increase in solar energy capacity, outpacing all other energy sources, both renewable and conventional. India also saw growth in onshore wind energy, adding 4.6 GW of capacity in the same period.

With its growing focus on renewable energy and the expansion of thermal energy storage systems, India is set to experience a surge in TES installations over the forecast period. As the country continues its efforts to diversify its energy mix and invest in renewable energy infrastructure, TES will play a pivotal role in supporting this transition.

These regional developments indicate that the global thermal energy storage market is on a path of substantial growth, driven by supportive government policies, technological advancements, and increasing investments in renewable energy projects worldwide.

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Key Thermal Energy Storage Companies

Industry participants in the thermal energy storage (TES) market are increasingly integrating advanced technologies into their existing systems to improve thermal energy management capabilities. This integration includes the use of innovative solutions such as smart sensors, AI-driven optimization, and advanced materials that enhance the efficiency, reliability, and performance of TES systems. By incorporating these cutting-edge technologies, companies aim to meet the growing demand for cost-effective, energy-efficient solutions that align with the shift towards renewable energy sources.

In addition to technological advancements, leading players in the TES market are focusing on inorganic growth strategies to strengthen their market position and expand their product offerings. These strategies often involve strategic acquisitions, partnerships, and joint ventures, enabling companies to leverage complementary expertise, access new markets, and broaden their customer base. For instance, players may acquire or partner with firms specializing in energy storage technologies, smart grid solutions, or renewable energy projects to enhance their portfolios and accelerate innovation.

Some of the prominent players in the global thermal energy storage market include: