Geothermal Energy Market Growth Drivers and Challenges:
Growth Drivers
- Launch of advanced research projects: By focusing on cutting-edge technologies such as deep drilling techniques, and geothermal heat storage, these projects aim to overcome existing resource limitations and reduce environmental impacts. For instance, according to the EGEC Geothermal in September 2024, funded by the European Union’s Horizon 2020 research and innovation program, the GeoSmart project was concluded, marking a significant achievement in the transition towards sustainable energy systems in Europe. This focus on innovation in enhancing the long-term sustainability and scalability of geothermal energy.
- Enhanced funding: Research and development in the geothermal energy sector is increasing along with more funding and incentives being allocated to develop and test new technologies and solutions. Simultaneously, increased financial support through grants and low-interest loans is mitigating the high costs traditionally associated with the market. For instance, in December 2024, the Caribbean Development Bank approved a loan of USD 34.8 million for the Geothermal Power Company of Dominica (GPC) to fund the construction of a 10-megawatt (MW) geothermal power plant.
Challenges
- High upfront capital costs: Geothermal projects require substantial investments before any power is generated, with exploration success often uncertain due to the difficulty of accurately mapping underground reservoirs. These financial and logistical barriers hinder the scalability of the geothermal energy market despite its long-term benefits.
- Limited availability: Geothermal sites are not available everywhere, which directly limits the placements of the geothermal projects. This creates a highly limited supply of geothermal energy projects and acts as a restraining factor for market growth. High exploration and drilling costs, along with technical uncertainties about resource viability further complicate the market expansion, limiting its accessibility compared to more widely deployable renewables.
Geothermal Energy Market Size and Forecast:
|
Base Year |
2025 |
|
Forecast Period |
2026-2035 |
|
CAGR |
5.5% |
|
Base Year Market Size (2025) |
USD 9.4 billion |
|
Forecast Year Market Size (2035) |
USD 16.06 billion |
|
Regional Scope |
|
Browse key industry insights with market data tables & charts from the report:
Frequently Asked Questions (FAQ)
In the year 2026, the industry size of geothermal energy is evaluated at USD 9.87 billion.
The global geothermal energy market size was worth around USD 9.4 billion in 2025 and is set to register a CAGR of more than 5.5%, exceeding USD 16.06 billion revenue by 2035.
North America geothermal energy market will hold around 46% share by 2035, driven by favorable legislation and federal initiatives supporting geothermal energy.
Key players in the market include Ormat Technologies Inc., Calpine, Enel Green Power North America Inc., EthosEnergy, GEG Power, ElectraTherm, First Gen Corporation, Berkshire Hathaway Energy, Turboden S.p.A., Fuji Electric, Kyushu Electric Power Company, Toshiba International Corporation, Mitsubishi Heavy Industries, Sumitomo Corp..
