Home Energy And Power Geothermal Energy Market Size, Growth & Trends by 2032

Geothermal Energy Market

Geothermal Energy Market Size, Share & Trends Analysis Report By Power Station (Dry Steam Power Station, Flash Steam Power Station, Binary Cycle Power Station), By End-User (Residential, Non-Residential) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2024-2032

Report Code: SREP1402DR
Study Period 2020-2032 CAGR 8.3%
Historical Period 2020-2022 Forecast Period 2024-2032
Base Year 2023 Base Year Market Size USD 7.7 billion
Forecast Year 2032 Forecast Year Market Size USD 15.8 billion
Largest Market North America Fastest Growing Market Europe
The sample report only takes 30 secs to download, no need to wait longer.

Market Overview

The global geothermal energy market size was valued at USD 7.7 billion in 2023 and is projected to reach USD 15.8 billion by 2032, registering a CAGR of 8.3% during the forecast period (2024-2032). The global geothermal energy market share is driven by strict government climate change laws in developing and developed economies.

Geothermal energy is a renewable energy source that uses the Earth's internal heat to produce power or direct heating. This energy is obtained from the Earth's inherent heat, which comes from the radioactive decay of minerals and heat left over from the planet's birth. Geothermal energy may be used for various purposes and is considered a more sustainable and ecologically acceptable alternative to fossil fuels. Implementing strict climate change-related government laws in developing and developed economies drives the worldwide growth of the geothermal energy market.

Furthermore, factors such as volatile fossil fuel prices, the scarcity of fossil fuels, the rise in greenhouse gas emissions, the high capacity of geothermal power, the cost-effectiveness of geothermal energy, the reduction in pollution caused by geothermal power plants, and an increase in energy demand are driving the growth of the global geothermal power market. On the contrary, increased government funding and ongoing technological development in the renewable energy sector will likely provide attractive market expansion opportunities during the next five years.


  • Binary Cycle Power Station dominates the market by power station.
  • The non-residential segment accounts for the largest share of the market by end-user.

Market Dynamics

Global Geothermal Energy Market Drivers:

Government Policies and Incentives

Many countries provide financial incentives for geothermal energy development. Tax credits, grants, subsidies, and preferential financing alternatives for geothermal projects are all possible incentives. In the United States, the federal tax credit for residential geothermal system installations was doubled from 26% to 30% by the Inflation Reduction Act of 2022 (IRA), which took effect on January 1, 2023. Some countries employ feed-in tariffs, guaranteeing geothermal energy providers a fixed payment for their electricity. This steady pricing model encourages investment in geothermal plants by making revenue predictable. Countries like Germany and Kenya have established feed-in tariffs for renewable energy sources, including geothermal, to promote their inclusion in the energy mix. The German Renewable Energy Sources Act 2023 (EEG 2023) boosts feed-in tariffs for newly installed PV systems. The EEG 2023 was enacted on July 30, 2022, with further provisions beginning January 1, 2023.

Moreover, as of 2023, Kenya has 891.8 MW of installed geothermal capacity. Kenya aims to generate 5,530 MW of geothermal power by 2030, making it the country's most significant source of clean energy. According to the International Renewable Energy Agency (IRENA), the total installed global geothermal capacity in 2023 will be roughly 15.96 gigawatts of electric power (GW). IRENA offers statistics on a wide range of renewable energy-related subjects. Electricity generation from geothermal energy has expanded at a modest yearly rate of roughly 3.5%. The United States is the world leader in geothermal energy, with 2.7 GW. However, only two Southeast Asian nations, Indonesia (2.4GW) and the Philippines (1.9GW), account for roughly 30% of global geothermal capacity.

Thus, government regulations and incentives drive investment, mitigate risks, and accelerate the worldwide geothermal energy market trend. As governments continue to prioritize renewable energy installations and decarbonization initiatives, supportive regulatory frameworks will be critical to realizing the full potential of geothermal resources. 

Global Geothermal Energy Market Restraints:

High Initial Cost and Exploration Risks

The early stages of geothermal project development require costly exploration to discover suitable sites with high geothermal potential. The drilling and exploration expenditures can be significant, making project commencement difficult, especially for smaller enterprises. From 2010 to 2022, the average installed cost of geothermal energy worldwide ranged between USD 2,700 and USD 5,600 per kilowatt. The average installation cost in 2022 was USD 3,478 per kilowatt. Furthermore, the total cost of a geothermal power plant might vary between USD 2,500 and USD 5,500 per installed kilowatt capacity. The LCOE for geothermal energy typically ranges from USD 47 to USD 150 per MWh. 

Furthermore, one of the significant hurdles in geothermal energy development is the high initial cost involved with exploration activities. Exploration includes digging wells to determine the temperature and permeability of underground rocks to discover potential geothermal reserves. According to IRENA's anticipated work program and budget for 2022-2023, exploration drilling expenditures in 2023 will be USD 7,970,000 for staff and USD 6,138,000 for non-staff costs. These expenses can be high, especially in locations with scarce geothermal data. More wells may be required in areas with little past exploration, significantly boosting overall costs.

According to the IRENA analysis, the financial risks associated with exploration can discourage private investment in geothermal projects. The high level of uncertainty and the possibility of failed drilling results can dissuade investors and make financing difficult. 

Global Geothermal Energy Market Opportunity:

Decentralized Power Generation

Geothermal energy presents a considerable opportunity for off-grid applications, mainly where conventional power infrastructure is complex. Remote villages and islands can profit from localized geothermal power generation, which provides a consistent and sustainable electricity supply. Kenya has been a remarkable example of using geothermal energy for decentralized power generation. The East African country has successfully developed off-grid geothermal projects, including the Olkaria I and Olkaria IV power stations. These projects contribute to rural electrification by providing power to areas not linked to the national grid.

Additionally, off-grid geothermal projects play an essential role in rural electrification by bringing electricity to locations where traditional power sources may be economically unsustainable. The decentralized character of these projects is consistent with increasing electricity availability for underprivileged populations. On November 28, 2023, Google stated that its advanced geothermal project would supply carbon-free electricity to the Nevada grid to power its data centers. Localized geothermal electricity is possible beyond Kenya, with other regions investigating similar applications. Countries with active geothermal resources, such as Indonesia, the Philippines, and parts of Central America, can imitate successful off-grid geothermal projects to expand electricity access.

Regional Analysis

North America Dominates the Global Market

The global geothermal energy market analysis is conducted in North America, Europe, Asia-Pacific, the Middle East and Africa, and Latin America.

North America is the most significant global geothermal energy market shareholder and is estimated to grow at a CAGR of 8.6% over the forecast period. The United States is expected to increase at a substantial CAGR during the projection period. The dominant commercial and residential applications are driving the expansion of the geothermal sector in the United States. The United States geothermal firms have 58 active development prospects and projects spread across nine states (the majority of which are in Nevada). Five projects are nearing completion, two in California and three in Nevada.

Furthermore, new projects are planned in the region and projected to help drive market expansion. For example, in March 2023, the Mexican government issued a tender for a new exploratory project under CFE titled 'Acquisition of Geothermal Well Drilling Services.' This project will look at six geothermal wells in four different districts of Mexico. These tenders are for a single drilling services provider with two drilling rigs available for geothermal wells, and they will be funded with USD 51 million from the Inter-American Development Bank (IDB) and the World Bank. 

Europe is anticipated to exhibit a CAGR of 9.0% over the forecast period. Currently, only ten European countries have operational geothermal power facilities. Over 20 countries are developing geothermal projects in the region. Over the last half-decade, the geothermal market has been centered on the broader European territories, with an annual growth rate of more than 10%. The region's tremendous growth over the last few decades has been the expansion of geothermal capacity in Turkey. Further, The European Union (EU) has lofty goals for reducing greenhouse gas emissions and transitioning to renewable energy sources, and geothermal energy is regarded as a promising option. The EU considers geothermal energy a feasible alternative to natural gas for heating and cooling buildings and industrial processes.

Additionally, according to IRENA, Europe's geothermal district heating and cooling market is predicted to expand in 2023. In 2021, the geothermal district heating and cooling sector had an installed capacity of 2.2 GWth, representing a 6% increase. In 2020, 72% of geothermal heat pumps (H&C) were utilized for heating and cooling, with a total capacity of 77.5 GWth.

The Asia-Pacific area is actively researching and developing geothermal energy resources as part of its commitment to sustainable and clean energy solutions. Several countries in the region have realized the potential of geothermal energy to diversify their energy mix and reduce reliance on fossil fuels. Indonesia is a significant player in the Asia-Pacific geothermal energy sector. With its immense geothermal potential, the country invests in geothermal projects to address rising energy demand.

For example, the Wayang Windu Geothermal Power Station in West Java is a critical project that adds to Indonesia's geothermal capacity. BREN plans to install 146 MW of geothermal production capacity by 2027. BREN will become a 1 GW enterprise with a total geothermal power plant capacity of 1,032 MW, up from 886 MW. BREN is commissioning the 15 MW Salak binary plant to reach this goal, which will begin COD in November 2023. Wayang Windu Unit-3, with a capacity of 23 MW, is also under construction and is expected to start commercial operations in 2026.

The Latin American market is primarily driven by rising industrial, commercial, and residential electricity consumption. The renewable and geothermal industries are steadily diversifying throughout the region to lessen reliance on fossil fuel-based electrical energy. Mexico is one of the largest resource bases for renewable energy production. The country might attract numerous investors by demonstrating the potential of renewables in its energy mix plans. The geothermal sector is Mexico's most significant contributor to clean electricity generation. 

The Middle East and Africa market is primarily centered in the East African Rift region. The region has significant geothermal potential for both direct consumption and energy generation. East Africa is seriously focused on expanding renewable energy sources, particularly geothermal, to satisfy the Paris Agreement's sustainable development and climate goals. Kenya is the Middle East and Africa's top producer and consumer of geothermal energy. Kenya's geothermal capacity stands at 891.8 MW as of 2023. Kenya's geothermal power output climbed by 46% in 2023, reaching 1,506.33 GWh in the first quarter.

Report Scope

Report Metric Details
By Power Station
  1. Dry Steam Power Station
  2. Flash Steam Power Station
  3. Binary Cycle Power Station
By End-User
  1. Residential
  2. Non-Residential
Company Profiles ABB Limited Aboitiz Power Corporation Calpine Corporation ENEL Green Power SpA Energy Development Corporation Kenya Electricity Generating Company PLC Ormat Technologies Inc. Pertamina Geothermal Energy Mitsubishi Hitachi Power Systems Inc. Toshiba Corporation Korea Electric Power Corporation Siemens AG EDF Group Yokogawa Electric Corporation
Geographies Covered
North America U.S. Canada
Europe U.K. Germany France Spain Italy Russia Nordic Benelux Rest of Europe
APAC China Korea Japan India Australia Singapore Taiwan South East Asia Rest of Asia-Pacific
Middle East and Africa UAE Turkey Saudi Arabia South Africa Egypt Nigeria Rest of MEA
LATAM Brazil Mexico Argentina Chile Colombia Rest of LATAM
Report Coverage Revenue Forecast, Competitive Landscape, Growth Factors, Environment & Regulatory Landscape and Trends
Need a Custom Report?

We can customize every report - free of charge - including purchasing stand-alone sections or country-level reports

Segmental Analysis

The global geothermal energy market is segmented based on power station applications.

The market is further segmented by power station into Dry Steam Power Station, Flash Steam Power Station, and Binary Cycle Power Station.

The binary cycle is expected to be the fastest-growing market in the coming years. Binary cycle power stations are geothermal power plants that use heat exchange. In these power plants, a medium-temperature geothermal fluid is utilized to heat a secondary working fluid with a lower boiling point, like isobutane or isopentane. The secondary fluid vaporizes at a lower temperature than water, and the vapor is then used to power a turbine attached to an electric generator. This technology enables binary cycle power plants to effectively generate electricity from geothermal reservoirs at lower temperatures. They have advantages in terms of efficiency and environmental effect because they may use geothermal resources at temperatures as low as 150°C (300°F).

Dry steam power plants are a form of geothermal power plant that uses high-pressure, dry steam from subsurface reservoirs to create energy. Steam is taken from wells drilled into the geothermal reservoir at these power plants, and the dry steam is used to power turbines that drive generators. The turbines turn the steam's kinetic energy into mechanical energy, which is then transformed into electrical energy. The United States has the largest capacity for dry steam-powered facilities. Most geothermal resources in the United States are located near the Earth's surface in the country's western region and in Hawaii. California produces the most electricity in the country from geothermal power.

By application, the market can be further bifurcated into Residential and Non-Residential.

Geothermal energy is commonly used in non-residential applications for district heating and cooling. Large-scale geothermal district heating systems provide thermal energy to various structures, including commercial, industrial, and institutional spaces. Geothermal energy can be integrated into industrial processes to supply heat for different manufacturing uses. Geothermal resources can benefit industries that demand continuous and reliable heat, such as food processing and greenhouse cultivation. The majority of non-residential geothermal energy applications produce electricity. Geothermal power plants generate non-residential electricity, including dry steam, flash steam, and binary cycle plants.

Geothermal energy is mainly used in home applications for space heating. Geothermal heat pumps are often used in homes to harvest heat from the Earth's subsurface in the winter, providing efficient and cost-effective heating. Geothermal systems can also be used to provide hot water for home purposes. Geothermal heat pumps may efficiently heat water for domestic use using the Earth's constant warmth at shallow depths.

Market Size By Power Station

Recent Developments

Top Key Players

ABB Limited Aboitiz Power Corporation Calpine Corporation ENEL Green Power SpA Energy Development Corporation Kenya Electricity Generating Company PLC Ormat Technologies Inc. Pertamina Geothermal Energy Mitsubishi Hitachi Power Systems Inc. Toshiba Corporation Korea Electric Power Corporation Siemens AG EDF Group Yokogawa Electric Corporation Others

Frequently Asked Questions (FAQs)

What is the growth rate for the Geothermal Energy Market?
Geothermal Energy Market size will grow at approx. CAGR of 8.3% during the forecast period.
Some of the top industry players in the Geothermal Energy Market are, ABB Limited, Aboitiz Power Corporation, Calpine Corporation, ENEL Green Power SpA, Energy Development Corporation, and Kenya Electricity Generating Company PLC.
North America has been dominating the Geothermal Energy Market, accounting for the largest share of the market.
The Geothermal Energy Market has seen the most substantial growth rate in Europe.
The global Geothermal Energy Market report is segmented as follows: By Power Station, By End-User

We are featured on :