Thermal Energy Storage Market Size, Share, Growth, Trends, and Global Industry Analysis: By Product Type (Latent Heat Storage, Sensible Heat Storage, and Thermochemical Heat Storage), By Technology (Electric Thermal Storage Heaters, Ice-based Technology, Miscibility Gap Alloy Technology, Molten Salt Technology, and Solar Energy Storage), By Storage Material (Molten Salt, Phase Change Material, and Water), By Application (District Heating & Cooling, Ice storage air-conditioning, Power Generation, Process Heating & Cooling, and Others), By End User (Industrial, Residential & Commercial, and Utilities), and Region Forecast 2020-2031

Thermal Energy Storage Market size was valued at US$ 573.4 million in 2024 and is projected to reach US$ 1,213.2 million by 2031 at a CAGR of 11.3% from 2025-2031. The market refers to systems that store excess thermal energy for later use in heating, cooling, or power generation, helping to improve energy efficiency and grid flexibility.

The market is gaining traction as the global energy sector transitions toward renewable and sustainable systems. TES technologies enable efficient energy use by capturing heat or cold during off-peak periods and releasing it when needed, thereby balancing demand and reducing energy waste. This is particularly beneficial in regions with high solar penetration, where excess daytime heat can be stored and used later. Increasing demand for uninterrupted power supply, along with rising adoption of concentrated solar power (CSP) systems, is fueling the market.

Additionally, government policies promoting energy conservation are encouraging investments in TES infrastructure. However, challenges persist. High upfront installation costs, long payback periods, and limited awareness about the technology in developing economies are major restraints. Moreover, the complexity of integrating TES into existing grid and HVAC systems can be a hurdle. Despite these issues, ongoing technological advancements and regulatory support are expected to position TES as a critical component of the global clean energy future.

Facts & Figures

• Energy Retention Efficiency: Modern molten salt thermal storage systems can retain up to 95% of stored heat for more than 6–10 hours, making them highly effective for solar thermal plants
• Temperature Range: TES systems operate across a wide range—from -40°C (ice-based systems) to above 600°C (molten salt systems)—serving both refrigeration and power generation needs.
• Storage Capacity Benchmarks: A 100 MWh molten salt TES facility can power a small town for up to 6–8 hours, depending on load conditions and usage patterns.
• Peak Demand Reduction: Chilled water and ice-based TES systems in commercial buildings can reduce peak electricity demand by 20–40%, leading to substantial cost savings.

Key Developments

• In June 2025, Abengoa commissioned a new 100 MWh molten salt TES facility integrated with a CSP plant in North Africa, designed to deliver solar energy after sunset with over 6 hours of thermal discharge capability.
• In May 2025, Sunamp launched a next-gen PCM-based residential storage unit in the UK that delivers compact, modular thermal energy storage for hot water systems with 20% higher energy density.
• In April 2025, Baltimore Aircoil Company partnered with HVAC firms in Southeast Asia to introduce hybrid cooling towers with integrated ice-based TES systems aimed at reducing peak load in commercial buildings.
• In March 2025, Siemens Energy expanded its TES R&D division to focus on high-temperature thermochemical storage for industrial waste heat recovery and carbon-neutral process heating.

Thermal Energy Storage Market Segmentation

Based on the product type

• Latent Heat Storage
• Sensible Heat Storage
• Thermochemical Heat Storage

Latent heat storage systems leverage the energy absorbed or released during a substance’s phase change typically solid to liquid or vice versa. These systems are compact and highly efficient, as they can store large amounts of thermal energy within narrow temperature bands. Phase Change Materials (PCMs) are often used in this setup, making them ideal for applications requiring precise thermal regulation, such as HVAC, refrigeration, and cold chain logistics. The minimal temperature fluctuation during storage and discharge improves energy management in buildings and industrial processes. As material science evolves, new PCMs with higher conductivity and better thermal cycling are emerging, broadening the use of latent heat storage across residential, commercial, and industrial markets.

Based on the technology

• Electric Thermal Storage Heaters
• Ice-based Technology
• Miscibility Gap Alloy Technology
• Molten Salt Technology
• Solar Energy Storage

Molten salt technology is one of the most widely adopted thermal energy storage methods, especially in large-scale solar power plants. These systems heat a mixture of nitrates (like sodium or potassium nitrate) to extremely high temperatures during peak sunlight hours and store that thermal energy for use later, even after sunset. This allows for consistent power generation from solar plants, overcoming the challenge of intermittency. Molten salts offer excellent heat retention, cost efficiency, and thermal stability. With high energy density and low vapor pressure, they can safely store energy for hours or even days. CSP plants in sun-rich regions widely employ this technology, making it a cornerstone in dispatchable renewable energy solutions.

Based on the storage material

• Molten Salt
• Phase Change Material (PCM)
• Water

Phase Change Materials (PCMs) are storage substances that absorb or release latent heat during their transition between solid and liquid states. These materials are widely valued for their ability to maintain a nearly constant temperature while storing or releasing thermal energy, making them suitable for applications where temperature regulation is critical. PCMs are increasingly being used in commercial buildings, data centers, and pharmaceutical storage to reduce cooling loads and improve energy efficiency. Their compact size and compatibility with low-to-medium temperature applications make them ideal for integration in space-constrained environments. Advancements in encapsulation techniques and thermal conductivity enhancements are improving the durability and performance of PCMs, positioning them as a next-gen solution in the thermal energy storage market.

Based on the application

• District Heating & Cooling
• Ice Storage Air-conditioning
• Power Generation
• Process Heating & Cooling
• Others

District heating and cooling systems are a major application area for thermal energy storage, particularly in urban environments. TES helps balance thermal loads by storing excess heat or chill during off-peak hours and distributing it when demand surges. This reduces strain on boilers, chillers, and power grids while cutting operational costs. Large-scale water tanks or ice-based systems are typically used for this purpose. TES integration in district systems enhances energy efficiency and sustainability, especially when coupled with renewable energy or waste heat recovery. It also allows energy planners to shift peak loads, minimize emissions, and improve the resilience of energy infrastructure. With urbanization rising globally, this application is becoming increasingly relevant for both new developments and retrofits.

Based on the end user

• Industrial
• Residential & Commercial
• Utilities

Utilities are among the most significant adopters of thermal energy storage solutions, particularly for grid balancing and load shifting. By storing excess thermal energy generated during low-demand periods, utilities can supply power or heating during peak hours without ramping up generation. TES also enables smoother integration of intermittent renewables like solar and wind, enhancing grid stability. Utilities often use large-scale molten salt or water-based systems in conjunction with combined heat and power (CHP) plants, district energy networks, or renewable energy installations. As regulatory frameworks shift toward decarbonization and efficiency, utilities are increasingly investing in TES as a cost-effective and environmentally friendly storage strategy. Their involvement is driving large-scale deployment and technological standardization in the sector.