Geothermal Energy Market (2026 - 2033)

Geothermal Energy Market Summary

The global geothermal energy market size was valued at USD 7.9 billion in 2025 and is projected to grow from USD 8.2 billion in 2026 to USD 10.8 billion in 2033, at a CAGR of 4.2% from 2026 to 2033. Asia Pacific dominated the market, accounting for a revenue share of 30.0% in 2025. Several factors drive the growing demand for geothermal energy.

Source: Grand View Research, IR Documents, Primary Interviews, Paid Databases

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One of the main drivers is the increasing demand for an uninterrupted power supply across the residential, commercial, and industrial sectors, and the rising demand for sustainable power generation across industries. Geothermal energy is sourced from reservoirs of hot water beneath the Earth’s surface. With applications across several economic sectors, increased use of geothermal energy has the potential to reduce fossil fuel use and associated greenhouse gas emissions, supporting the global ambition to reduce carbon emissions. As several countries across the globe strive to reduce dependence on fossil fuels, geothermal energy is emerging as a promising solution to mitigate growing energy demand and reduce greenhouse gas emissions in the coming years.

The U.S. is among the early adopters of renewable energy in the power generation sector, owing to the increased emphasis on clean energy under the government's Energy Act. Such initiatives have provided guidelines, including the Inflation Reduction Act (IRA) and the Infrastructure Investment and Jobs Act, for implementing renewable energy sources in the energy generation sector. Rising distribution costs, main grid failures leading to blackouts, and incentive programs introduced by the U.S. government are expected to drive end-users to switch to geothermal energy sources, thereby augmenting market demand.

In February 2026, the U.S. Department of Energy announced USD 171.5 million in funding to support the growth of geothermal energy adoption in the country. Government Efforts to meet rising electricity demand through renewable energy sources are also expected to contribute significantly to market growth. The share of renewable energy is expected to rise significantly as governments commit to harvesting as much energy as possible from renewable sources while reducing carbon emissions, thereby driving growth in the renewable energy market.

Analyst Perspective

The geothermal energy market is projected to grow steadily as countries prioritize renewable energy security and decarbonization in power and heating. Binary cycle systems lead technologically, given their suitability for low-temperature geothermal resources and broad project applicability. Facilities above 5 MW hold the largest market share, driven by increased investment in utility-scale generation. The residential sector remains the main revenue source, supported by rising adoption of geothermal heat pump systems for efficient heating and cooling. Ongoing policy support, technological advances, and increased investment in geothermal infrastructure are expected to drive market growth during the forecast period.

Technology Insights

The binary cycle power plants segment led the market, with a market share of around 30.0% in 2025. Binary cycle power plants utilize lower-temperature geothermal resources, which are more abundant globally than high-temperature resources, making them the most viable option for regions with moderate to low geothermal heat potential, thereby expanding the geographical scope for geothermal energy development. For instance, in July 2025, Exergy International received a contract from EDA Renováveis to design, build, and commission a 5 MWe geothermal binary power plant on São Miguel Island, Azores, thereby advancing binary-cycle geothermal technology for efficient renewable energy generation.

The flash steam segment is anticipated to grow at the fastest CAGR during the forecast period, owing to the efficient harnessing of natural steam produced in underground reservoirs and its direct conversion into electrical power. Flash steam geothermal energy plants offer reliable, sustainable energy solutions with minimal environmental impact, making them attractive options for countries seeking to diversify their energy mix. Moreover, advancements in flash steam technology, such as improved drilling techniques and enhanced geothermal reservoir management, have increased efficiency and cost-effectiveness, further fueling demand for these power plants. As countries across the globe adopt sustainable energy sources for power generation, the demand for geothermal energy is expected to increase significantly in the coming years.

Power Insights

The above 5 MW segment led the market with the largest revenue share of over 55.0% in 2025, owing to increasing demand for large-scale power plants, which can generate substantial electricity for commercial and industrial applications. For instance, in February 2025, Ormat Technologies commenced commercial operations of the 35 MW Ijen Geothermal Power Plant in Indonesia, developed jointly with PT Medco Power Indonesia, supporting the expansion of large-capacity geothermal power generation. Moreover, the growing significance of geothermal energy as a reliable and sustainable baseload power source further contributes to demand for geothermal power plants above 5 MW.

However, geothermal power plants up to 5 MW of power capacity also hold significant demand as these mid-sized geothermal power plants offer a balance between scalability, efficiency, and cost-effectiveness, making them an attractive option for both developed and developing countries. As countries across the globe prioritize the transition to clean energy sources in residential applications, the demand for up to 5MW geothermal power plants is expected to increase over the forecast period.

Application Insights

The residential segment led the market with the largest revenue share of around 40.0% in 2025, driven by strong demand for residential cooling and heating applications, offering homeowners a renewable alternative to traditional HVAC systems. For instance, in April 2025, Dandelion Energy and Lennar announced one of the largest residential geothermal deployments in U.S. history, under which they deployed geothermal heating and cooling systems in more than 1,500 new homes in Colorado, advancing the adoption of geothermal heat pumps in residential construction. Apart from space conditioning, geothermal heat pumps can also be used for providing domestic hot water. Geothermal heat pump systems are equipped with an ancillary heat exchanger, known as a desuperheater that uses superheated gases from the heat pump’s compressor to heat water. In summer, the desuperheater uses the surplus heat that otherwise would be dissipated into the ground. Thus, when the geothermal heat pump frequently operates during summer, it can offer significant heating capacity. However, during the fall, spring, and winter, residences must rely on traditional water-heating methods because the desuperheater does not produce much excess heat.

The industrial segment is anticipated to grow at the fastest CAGR over the forecast period, owing to rising ground temperatures and further reductions in system efficiency and capacity. The adoption of geothermal heat pumps in industrial applications is lower compared to residential and commercial applications. Industrial environments consume a large amount of energy, thereby producing heat that must be continuously removed. Installing geothermal heat pumps in industrial facilities would result in continuous heat rejection to the earth, thereby increasing ground temperature and further reducing system efficiency and capacity. Thus, these factors are further expected to reduce the adoption of geothermal heat pumps in industrial applications.

Regional Insights

The Asia Pacific region dominated the geothermal energy market, with a revenue share of approximately 30.0% in 2025, and is expected to grow at the fastest CAGR over the forecast period. This can be attributed to high demand for geothermal heat pumps in the residential sector for space heating & cooling. Furthermore, a rising population, improving economic conditions, and the presence of one of the largest manufacturing sectors are projected to impact market growth in the region positively.

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The China geothermal energy market accounted for the largest market share of over 25.0% in the Asia pacific in 2025. Major heat pump manufacturers are shifting or expanding their production capacity to China to leverage low labor costs. Moreover, China's membership in the Trans-Pacific Partnership Agreement is projected to influence the market growth in the country positively.

The South Korea geothermal energy market is expected to grow at the fastest CAGR over the forecast period. Rising awareness pertaining to greenhouse gas emissions and climate change is projected to propel the demand for energy-efficient technologies in the country. Furthermore, government regulations and emission standards are expected to increase demand for energy-saving products, including geothermal heat pumps, in the commercial and residential sectors.

Europe Geothermal Energy Market Trends

The geothermal energy market in Europe is expected to grow at the fastest CAGR during the forecast period. The demand for energy-efficient products in Europe is projected to be high. Various government policies are being implemented to reduce energy consumption in the region. Such initiatives are projected to boost the demand for heat pumps. The recovering construction sector is also expected to contribute to market growth in Europe.

The Germany geothermal energy market accounted for the largest market share of over 25.0% in Europe. The demand for geothermal heat pumps in the country is anticipated to be driven by key application sectors, including residential, industrial, and commercial. Technological advancements in the superior performance of geothermal heat pumps are expected to boost market growth over the forecast period.

The France geothermal energy market is expected to grow at a significant CAGR over the forecast period, owing to the increasing investments in energy-efficient solutions, concerns regarding carbon emissions, and climatic changes, urging the need for sustainable heating and cooling solutions.

North America Geothermal Energy Market Trends

The geothermal energy market in North America is expected to grow at a significant CAGR over the forecast period. The economy of North America is the largest and one of the most robust across the globe, and is witnessing significant growth owing to the industrial dynamics and commodity abundance in its countries. The region includes the U.S., Mexico, and Canada, which are significant and complex economic systems.

U.S. Geothermal Energy Market Trends

The U.S. geothermal energy market accounts for the largest revenue share over 75.0%, in North America. The U.S. government has favorable policies in place, such as personal tax credits and direct incentives for product installation, which encourage the installation of heat pumps. Improving energy efficiency across industries is one of the primary objectives of governments worldwide. The rising need for renewable energy sources, along with extensive government support in the form of subsidies, incentives, and other monetary benefits, is projected to drive market growth over the forecast period.

The Canada geothermal energy market is expected to grow at a significant CAGR during the forecast period, owing to the favorable government regulations. The Canadian government offers residential geothermal tax credits and rebates to promote the adoption of highly energy-efficient geothermal heat pumps. Nova Scotia, through its Green Heat program, offers a rebate of up to USD 2,500 on the installation of a GHP. The Manitoba Green Energy Equipment Tax Credit provides approximately USD 5,000 in incentives for installing GHP systems. New Brunswick offers rebates of up to USD 5,000 on GHP. Such initiatives by regional authorities are expected to boost the adoption of geothermal heat pumps in the country over the forecast period.

Central & South America Geothermal Energy Market Trends

The Central & South America geothermal energy market is expected to grow at the fastest CAGR during the forecast period. The region's market expansion is driven by increasing investments in smart technologies, rising power demand, and government policies promoting clean fuels and renewable energy sources. Favorable financing schemes, technological advancements like binary technology, and the adoption of district heating technologies are key factors propelling the industry. Geothermal energy is gaining traction across sectors such as mining, agriculture, and services, contributing to the region's energy security and environmental goals.

The Brazil geothermal energy market accounted for the largest revenue share of over 35.0% in Central & South America. The growing focus on environmentally friendly, natural-resource-based technologies, coupled with rising energy demand, is expected to drive market growth over the forecast period.

The geothermal energy market in Chile is expected to grow at the fastest CAGR during the forecast period. Chile’s abundant geothermal potential can provide a suitable option to diversify the country’s power generation mix. Moreover, Chile’s Energy Policy, which aims to generate 70% of the country’s electricity from renewables by 2050, is expected to increase further the use of geothermal energy in the coming years.

Middle East & Africa Geothermal Energy Market Trends

The Middle East & Africa geothermal energy market is expected to grow at the fastest CAGR during the forecast period. The region's focus on reducing reliance on fossil fuels, enhancing energy security, and addressing climate change through clean energy solutions is driving geothermal energy's growth. Government incentives, subsidies, and policies promoting renewable energy are key drivers. The MENA region's abundant solar resources make solar power generation a viable and sustainable option, contributing to the region's energy transition.

The Saudi Arabia geothermal energy market accounted for the largest revenue share, over 35.0%, in the Middle East & Africa. The government plans to increase investments in transportation and infrastructure development and to fast-track key projects. In addition, government initiatives, including Saudi Arabia Vision 2030 and National Transformation Program (NTP), are expected to promote economic development. Moreover, an increased focus on developing transportation infrastructure in the country is expected to boost residential and commercial development in the vicinity, which is expected to positively impact market growth over the forecast period.

The UAE geothermal energy market is expected to grow at the fastest CAGR during the forecast period. The geothermal heat pump technology is at an early stage in cooling-dominated applications in the country; its demand for cooling applications is gradually increasing. The commercial buildings in the country have fluctuating demand, relatively high occupancy, and widely varying cooling requirements within individual zones that are not easily met efficiently with conventional systems.

Key Geothermal Energy Companies Insights

Key companies are adopting several organic and inorganic growth strategies, such as new Technology development, mergers & acquisitions, and joint ventures, to maintain and expand their market share.

Key Geothermal Energy Companies

The following key companies have been profiled for this study on the geothermal energy market:

• Turboden S.p.A.

• SLB

• Baker Hughes Company

• Atlas Copco AB

• EXERGY INTERNATIONAL SRL

• TOSHIBA CORPORATION

• MITSUBISHI HEAVY INDUSTRIES, LTD.

• General Electric Company

• Ansaldo Energia

• Ormat

Recent Developments

• In November 2025, Sinopec expanded its geothermal heating capacity to 126 million square meters, supplying clean heating to over 1.2 million households in more than 70 cities.
• In June 2024, Ormat Technologies and SLB entered a strategic collaboration to deliver integrated geothermal project solutions, combining their expertise in geothermal resource development, reservoir technologies, and power plant engineering to accelerate the deployment of traditional and enhanced geothermal energy projects.

Global Geothermal Energy Market Report Segmentation

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends and opportunities in each of the sub-segments from 2021 to 2033. For this study, Grand View Research has segmented the global geothermal energy market report based on technology, power, application, and region:

• Technology Outlook (Revenue, USD Billion, 2021 - 2033)
  • Flash Steam
  • Dry Steam
  • Binary Cycle Power Plants
• Power Outlook (Revenue, USD Billion, 2021 - 2033)
  • Upto 5MW
  • Above 5 MW
• Application Outlook (Revenue, USD Billion, 2021 - 2033)
  • Residential
  • Commercial
  • Industrial
• Regional Outlook (Revenue, USD Billion, 2021 - 2033)
  • North America
    • U.S.
    • Canada
    • Mexico
  • Europe
    • Germany
    • France
    • Italy
    • Sweden
    • Finland
    • Switzerland
    • Netherlands
  • Asia Pacific
    • China
    • Japan
    • South Korea
    • Australia
  • Central & South America
    • Brazil
    • Chile
  • Middle East & Africa
    • Saudi Arabia
    • UAE