Geothermal Energy Market - Trend, Growth, Forecast 2025-2032

Geothermal Energy Market Synopsis:

The Geothermal Energy Market Size Was Valued at USD 7.29 Billion in 2024 and is Projected to Reach USD 11.83 Billion by 2032, Growing at a CAGR of 6.24% From 2024-2032.

Geothermal Energy is the heat found within the subsurface of the earth, which can be used directly for heating and cooling, or converted into electricity. The main advantages of geothermal energy are its low cost and its ability to operate year-round at high-capacity factors. This allows it to provide firm, dispatchable electricity and, if incentivized, ancillary services to the electricity system. As the penetration of solar and wind power grows, these characteristics become more valuable.

The world is witnessing an expanding geothermal energy market due to nations are actively finding renewable alternatives to fossil fuels for sustainable power generation. The drilling industry coupled with enhanced geothermal systems (EGS) makes previously inaccessible geothermal resources accessible thus expanding market capacities. The worldwide geothermal development gains momentum through governmental backing of supportive policies and funding solutions

Source: Irena

According to the Irena, in 2019, geothermal capacity was 13,824 MW, which rose to 14,157 MW in 2020 and further to 14,432 MW in 2021. The upward trend continued in 2022 with 14,653 MW and reached 15,026 MW in 2023. This consistent growth highlights the increasing adoption and development of geothermal energy as a renewable electricity source.

Geothermal Energy Market Growth and Trend Analysis:

Technological Advancements Unlock Geothermal Potential

• The global geothermal energy sector has experienced steady growth, with global geothermal power capacity increasing by nearly 40% over the past decade. Türkiye, Indonesia, and Kenya alone accounted for three-quarters of the new capacity additions. Investment in geothermal energy is rising, with governments and private investors, including oil and gas companies, increasing their stakes in geothermal projects.

• Technological advancements, such as enhanced geothermal systems (EGS) and next-generation drilling, are unlocking new potential in the sector. With continued policy and industry support, the costs of next-generation geothermal could fall by up to 80% by 2035, positioning it as one of the most cost-effective and dispatchable clean energy sources. The oil and gas industry's expertise in drilling and resource exploration is also contributing to further cost reductions and expanding the feasibility of geothermal projects.
• Geothermal energy is increasingly recognized for its role in energy security and the global energy transition. Countries like China, India, and Southeast Asia are turning to geothermal as they move away from coal, with geothermal providing stable, dispatchable power that complements solar and wind energy.
• In regions with high industrial energy demand, such as Europe and the U.S., geothermal is being explored as a clean alternative for both heating and electricity. Government policies and climate goals that emphasize clean energy targets are pivotal in driving geothermal growth, and the sector's high-capacity factor (75-80%) makes it a reliable option for balancing intermittent renewable sources like wind and solar.

High Initial Expenses Deter Potential Investors

• Geothermal energy development needs major investment funds specifically for the research process and drilling procedures. Potential investors are reluctant to invest due to the high initial expenses although there is no assurance that discoverable geothermal resources exist. The financial risks associated with geothermal projects become greater than risks in wind or solar power ventures due to the existing uncertainties. The absence of funding support impedes the development of new geothermal ventures since many organizations fail to obtain financing.

Next-Gen Technologies Open Opportunities for Innovation

• As next-generation technologies like closed-loop systems and deep drilling improve, new opportunities arise for businesses to develop, scale, and commercialize these innovations. For example, closed-loop systems are an emerging solution for geothermal energy extraction that avoids the use of water, opening up geothermal potential in areas where water resources are scarce. The reduction in costs by up to 80% by 2035 creates a unique window for investors, researchers, and companies to capitalize on early-stage geothermal technologies.

Unpredictable Subsurface Conditions

• The critical challenge lies in the technical risks associated with resource exploration and drilling, as subsurface conditions are unpredictable, and unsuccessful drilling attempts can lead to substantial financial losses. The market also contends with complex regulatory and environmental approval processes, which vary across countries and often involve lengthy permitting timelines due to concerns over land use, emissions, and potential seismic activity induced by drilling operations.

Geothermal Energy Market Segment Analysis:

Geothermal Energy Market is segmented based on technology, power, and application, and region

By Technology, Binary Cycle Power Plants segment is expected to dominate the market during the forecast period

• The present market dominance of binary cycle segments in geothermal energy arises from their effective operation with lower-temperature geothermal resources that surpass the availability of high-temperature resources needed for flash plants. The binary system uses heat exchangers together with a second fluid that boils at temperatures beneath the water to function properly at geothermal reservoir temperatures under 200 °C. By utilizing this technology geothermal power generation became accessible to regions with moderate geothermal gradients leading to increased market adoption.

• Most geothermal facilities choose binary plants instead of flash plants due to the plants can operate at a wider range of geothermal resources despite needing multiple wells. However, the additional requirements decrease the initial capital expenditure. The geothermal energy market has been transformed by improved binary cycle technology together with better working fluids and heat exchangers that have made binary plants the dominant power generation technology.

   Source: Geothermal Energy

• According to Geothermal Energy (worldwide geothermal power 2020–2023), The binary ORC type of geothermal power unit is the most abundant accounting for 42.8% of total technologies. Reinforcing the dominance of the Binary Cycle Power Plants segment.

By Application, the Residential segment held the largest share of in projected period

• The residential sector dominates geothermal energy consumption primarily due to the widespread adoption of geothermal heat pumps (GHPs) and district heating systems. GHPs used for heating purposes represent 53% of geothermal power consumption worldwide in 2023 alongside district heating which brings the total residential-commercial geothermal activity to 86%.

• Several countries including China, the United States, Sweden, and Germany have established supportive government measures for GHPs, these ground-source heat pumps efficiently utilize shallow ground heat deposits for residential heating and cooling purposes. The implementation of geothermal energy at home proves to be both more affordable and easier to access than the implementation of geothermal energy for industrial purposes.

Geothermal Energy Market Regional Insights:

Asia Pacific is Expected to Dominate the Market Over the Forecast Period

• Asia-Pacific has become a dominant region in the geothermal sector due to several key factors, including abundant geothermal resources, strong government support, technological advancements, and increasing demand for renewable energy.

• In Asia Pacific, Indonesia stands as the second largest geothermal power producer worldwide. Government initiatives merged with private-sector investments for geothermal exploration have established the geothermal energy sector as a substantial success throughout Indonesia.

Source: IEA

• The geothermal electricity generation market in 2023 was dominated by the Asia-Pacific region, which accounted for 38% of global production. This leadership was driven primarily by Indonesia and the Philippines, both of which are among the top five global geothermal electricity producers. The region's dominance is fueled by favorable volcanic geology, increasing energy demand, and strong government support for renewable energy expansion. Meanwhile, the United States remains the second-largest contributor, holding a 30% share of global geothermal electricity generation.

Geothermal Energy Market Active Players:

• Alterra Power Corporation (Canada)

• Ansaldo Energia (Italy)
• Atlas Copco Group (Sweden)
• Berkshire Hathaway Energy (U.S.)
• Calpine (U.S.)
• ElectraTherm (U.S.)
• Enel Green Power North America Inc. (U.S.)
• EthosEnergy (U.S.)
• Exergy (Italy)
• First Gen Corporation (Philippines)
• GEG Power (Iceland)
• General Electric (U.S.)
• Mitsubishi Corporation (Japan)
• Mitsubishi Heavy Industries (Japan)
• Ormat Technologies Inc. (U.S.)
• Reykjavik Geothermal (Iceland)
• TAS Energy (U.S.)
• Toshiba Corporation (Japan)
• Toshiba International Corporation (Japan)
• Turboden S.p.A. (Italy)
• Other Active Players

Key Industry Developments in the Geothermal Energy Market:

• In February 2025, Eavor's geothermal project in Geretsried launched amid rising global interest in advanced geothermal technologies. Recent breakthroughs, including ExxonMobil's geothermal ventures and growing investments in deep drilling, highlighted the sector's momentum. Countries like the U.S. and Iceland expanded pilot projects, reinforcing geothermal's potential as a reliable clean energy source.

• In August 2024, India's Geothermal Energy Pilot Plant Launched in Telangana. In a noteworthy advancement for India's renewable energy future, Singareni Collieries Company Limited (SCCL) has successfully commissioned a 20-kW pilot geothermal power plant in Telangana.