Geothermal Energy Market Forecast: What to Expect by 2030?

The global geothermal energy market was valued at USD 7.45 billion in 2023 and is projected to reach USD 9.22 billion by 2030, growing at a CAGR of 3.1% from 2024 to 2030. The increasing demand for uninterrupted power supply across residential, commercial, and industrial sectors, along with a growing emphasis on sustainable energy sources, is driving the expansion of the geothermal energy market.

Geothermal energy is derived from naturally occurring underground reservoirs of hot water and steam. Its application across multiple sectors contributes to reducing dependence on fossil fuels and lowering greenhouse gas emissions. As countries worldwide intensify efforts to meet carbon reduction goals and transition to cleaner energy sources, geothermal energy stands out as a promising alternative for meeting rising energy demands sustainably.

In the United States, the adoption of renewable energy solutions is being accelerated by government policies such as the Inflation Reduction Act (IRA) of 2022 and the Infrastructure Investment and Jobs Act. These legislative efforts support clean energy initiatives and provide incentives for the deployment of renewable technologies. Rising electricity distribution costs, increasing frequency of grid failures, and the appeal of energy reliability are also expected to push more end-users toward geothermal power solutions, supporting broader market growth.

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Key Market Trends & Insights

• Asia Pacific held the largest share of the geothermal energy market in 2023, accounting for 34.7% of total revenue, and is anticipated to grow at the fastest CAGR over the forecast period. The regional market is being driven by the demand for geothermal heat pumps, especially in the residential sector, for efficient space heating and cooling. Population growth, economic development, and the presence of a strong manufacturing base further bolster regional demand.
• By technology, the binary cycle power plant segment captured the highest market share at 30.5% in 2023. These plants utilize lower temperature geothermal resources, which are more commonly found across various regions, making them ideal for expanding geothermal energy deployment in areas with moderate to low geothermal heat availability.
• By power capacity, the above 5 MW segment dominated the market in 2023 with a 56.4% revenue share. This reflects the growing demand for high-capacity geothermal power plants capable of generating sufficient electricity to meet the needs of industrial and commercial facilities. The segment is also benefiting from the reliability and sustainability of geothermal energy as a baseload power source.
• By application, the residential sector led with a 40.7% share in 2023, driven by increasing demand for geothermal systems for space heating and cooling. Geothermal heat pumps are becoming a renewable alternative to conventional HVAC systems and also offer the benefit of domestic hot water supply.

Market Size & Forecast

• 2023 Market Size: USD 7.45 Billion
• 2030 Projected Market Size: USD 9.22 Billion
• CAGR (2024-2030): 3.1%
• Asia Pacific: Largest market in 2023
• Europe: Fastest growing market

Key Companies & Market Share Insights

Leading market players are focusing on both organic and inorganic strategies such as technology development, mergers, acquisitions, and strategic partnerships to strengthen their market presence:

• February 2024: Terrapin and TerraScale announced a merger to support expansion into Canada, Japan, and Switzerland, with a focus on geothermal projects.
• February 2024: Pertamina Geothermal Energy partnered with Turkey’s Kipas Holding for joint exploration and investment in renewable energy.
• November 2023: Google and Fervo launched their first geothermal energy project in Nevada, U.S., delivering carbon-free energy to the power grid.
• September 2023: Dandelion Energy collaborated with Palmetto to integrate residential solar energy with geothermal heating and cooling systems.

Key Players

• Turboden S.p.A.
• Alterra Power Corporation
• TAS Energy
• Atlas Copco Group
• Exergy
• Toshiba Corporation
• Mitsubishi Heavy Industries
• General Electric
• Ansaldo Energia
• Ormat Technologies

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Conclusion

The global geothermal energy market is steadily expanding, supported by increasing demand for reliable, clean, and sustainable energy solutions. While the growth rate is moderate, at a CAGR of 3.1%, long-term prospects remain positive due to favorable government policies, rising grid infrastructure challenges, and increasing investments in renewable energy. Asia Pacific leads the market, with Europe showing the fastest growth potential. Technological advancements and strategic collaborations are expected to play a crucial role in unlocking new opportunities, enhancing geographic reach, and making geothermal energy a key contributor to the global transition toward decarbonization and energy sustainability.