Subhead : The thermal energy storage market is projected to grow from USD 9.4 billion in 2025 to USD 27.6 billion by 2036, expanding at a 10.3% CAGR as renewable integration and energy efficiency drive demand.

NEW DELHI, September 10, 2026 — The global thermal energy storage market is projected to reach USD 27.6 billion by 2036, rising from USD 9.4 billion in 2025 at a 10.3% CAGR between 2026 and 2036, according to Fact.MR. The market is expected to expand about 2.7 times in value, creating an absolute dollar opportunity of USD 17 billion over the forecast period.

The reason for this growth is clear. Increasing solar and wind deployment is creating a need to balance variable power output, while decarbonization programs are supporting thermal storage adoption across utilities and industrial sectors. District heating and cooling networks, industrial waste heat recovery, smart grids, and energy infrastructure modernization are also identified as demand drivers.

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Thermal Energy Storage Market Gains From Renewable Integration

Fact.MR identifies renewable energy integration as a high-impact growth driver for thermal energy storage. Rapid expansion of solar and wind capacity is increasing the need for energy balancing and grid stability. Industrial heat electrification and decarbonization initiatives are also accelerating adoption in energy-intensive industries.

Policy activity is adding another layer of demand. The U.S. Department of Energy expanded funding under its Long Duration Storage initiative in March 2025, while the California Energy Commission introduced increased storage integration requirements in grid planning in January 2025.

Fact.MR’s analysis also identifies district energy investment as an important opportunity. Expansion of heating and cooling networks is supporting thermal energy storage integration across commercial and residential applications. Industrial waste heat recovery provides another area for deployment.

Fact.MR is a market intelligence provider that analyzes thermal energy storage systems across storage type, technology, duration, application, end-use industry, and regional markets through primary and secondary research.

Sensible Heat Storage Holds 52% Share

Sensible heat storage leads the storage-type segment with a 52% share in 2026. Fact.MR attributes this position to technological maturity, cost-effectiveness, and established use in molten salt and water-based systems for large-scale applications.

Latent heat storage using phase change materials accounts for 28%, supported by higher energy density and compactness. Thermochemical storage represents the remaining 20%, reflecting its position as an emerging technology segment.

Active thermal energy storage systems hold a 72% share by technology. Their use across utility-scale and industrial projects is linked to heat-transfer control, energy storage performance, and flexibility. Passive systems account for 28%, with applications including HVAC systems and buildings.

Medium-duration systems lead storage duration with 45% share in 2026. Long-duration systems account for 30%, while short-duration storage represents 25%.

Power generation remains the leading application at 34% share in 2026, supported by concentrated solar power deployment, grid stabilization, and dispatchable energy supply. Heating and cooling account for 27%, while industrial process heat represents 26%.

India Records 11.6% CAGR Through 2036

Regional growth varies considerably. India is projected to record an 11.6% CAGR through 2036, ahead of China at 10.8%, Japan at 9.4%, the U.S. at 9.0%, Germany at 8.4%, and the U.K. at 9.8%. Saudi Arabia records the highest country-level CAGR in the supplied comparison at 12.3%.

In India, the Ministry of New and Renewable Energy expanded incentives for solar thermal and storage integration in January 2025. The Bureau of Energy Efficiency introduced guidelines promoting thermal energy storage in industrial and commercial buildings in April 2025.

An insider-level market detail from the Fact.MR analysis is that utilities account for 38% of the thermal energy storage market in 2026, making them the largest end-use segment. Industrial users follow with 32%, while commercial and residential applications represent 20% and 10%, respectively.

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 Industry Competition Remains Moderately Fragmented

Fact.MR describes the thermal energy storage market as moderately fragmented. Siemens Energy, Aalborg CSP, and Trane Technologies collectively hold an estimated 40% to 55% share, with competition influenced by efficiency, cost per kWhₜ, and project execution.

Key companies identified in the analysis include Siemens Energy AG, Aalborg CSP A/S, BrightSource Energy Inc., Baltimore Aircoil Company, Burns & McDonnell, Trane Technologies plc, EVAPCO, Inc., Steffes LLC, Ice Energy, and ENERGYNEST AS.

Recent activity includes Brenmiller Energy Ltd.’s June 2025 memorandum of understanding for TES deployment in Japan. EnergyNest AS also signed a commercial agreement with LEONHARD KURZ in March 2025 and launched an industrial thermal storage project at the LEONHARD KURZ site in July 2025.

Shambhu Nath Jha, Principal Consultant at Fact.MR, said, “The thermal energy storage market is no longer defined solely by conventional heat storage methods and basic energy balancing applications.”

He added that growth is increasingly connected with “rapid integration of renewable energy sources, rising demand for grid stability and decarbonization”, alongside advanced long-duration storage technologies.

About Fact.MR

Fact.MR is a market research and consulting firm providing global market intelligence, forecasts, competitive analysis, and industry research. Its thermal energy storage analysis covers technology, storage type, storage duration, application, end-use industry, regional demand, competition, and market growth through 2036.