Solar Thermal Market

Solar Thermal Market Size

The global solar thermal market was valued at USD 16.1 billion in 2024 and is estimated to grow at a CAGR of 9% from 2025 to 2034. Increased environmental awareness and government focus on decreasing carbon footprints will fuel product adoption. Increasing solar incentives in addition to positive regulations aimed at curtailing carbon emissions will enhance the industry landscape. Furthermore, the transition towards greener building codes will also accelerate solar thermal systems growth within residential and commercial markets.

Government-backed investments in big solar thermal projects will boost product adoption. For example, in February 2023, the Australian government and ARENA pledged USD 65 million for Vast Solar's 30 MW/288 MWh concentrated solar thermal project in Port Augusta. Further, increasing public-private partnerships will complement the technology adoption to increase deployment in developed energy markets.

Governments globally are focusing on decarbonization plans and renewable energy, making them a conducive base for solar thermal expansion. Long-term shift toward low-emission, energy-efficient systems, and lower dependence on conventional heating sources will aid the expansion of the market. Solar thermal integration into district heating systems, both in rural and urban areas, will also speed up market development.

Hybrid and electro-thermal storage technology advancements will drive market development. In August 2023, USD 10 million funding was provided by ARENA to RayGen to enhance its solar-plus-thermal storage technology, combining 250 kW PV modules and 3 MW/50 MWh thermal storage, delivering firm solar power for 17 hours. In addition, increasing hybridization of PV and thermal solutions is expected to enhance grid resilience and solar thermal technology penetration in off-grid and remote locations.

The tariff policies enacted during the Trump administration significantly impacted the solar thermal industry. Imposed tariffs on critical equipment and materials, such as photovoltaic cells and modules, increased import costs for essential components. These rising costs have delayed project timelines, as companies struggle with procurement expenses and limited component availability. As a result, the solar thermal supply chain continues to face pressure, leading to potential disruptions in manufacturing and deployment.

Solar Thermal Market Trends

• Ongoing shift toward renewable energy, with solar thermal systems contributing to the decarbonization of the heating industry, will lead to market expansion. In December 2024, Serbia secured USD 112.3 million from the EBRD to build a solar thermal plant in Novi Sad, featuring 38,600 m² of collectors and 850,000 m³ of heat storage. The project will cut natural gas use by 29% and CO₂ emissions by 17,350 tons yearly. Moreover, key factors including technological advancements, economies of scale, and improved manufacturing processes will complement the market landscape.
  
• Rising interest in decentralized heating systems is anticipated to foster the technology deployment. Solar thermal reduces reliance on external energy sources, providing long-term energy security, particularly in regions with high energy import dependency will drive the business scenario. Moreover, increasing inclination toward self-sustaining heating systems is anticipated to contribute to the growing integration of solar thermal technologies across developed and developing economies.
  
• Solar thermal technology integration with long-duration energy storage systems will boost market growth. Photon Energy, in January 2025, made an announcement regarding a 250 MW solar hydro project in Winterton, South Africa, with 150 MW of thermal hydro storage employing RayGen technology, which has the capability of providing 12 hours of dispatchable power. Additionally, such hybrid systems will promote the adoption of solutions for areas experiencing energy reliability issues.
  
• Increased water heating demand in off-grid and remote locations will drive product adoption. The solutions provide an economical substitute for traditional electric or diesel-powered heating in areas with no stable grid infrastructure. Additionally, ongoing efforts to expand rural electrification and reduce dependency on high-cost fuels are likely to complement the deployment of solar thermal technologies in underserved regions.
  

Solar Thermal Market Analysis

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• Based on type, the industry is segmented into thermosiphon and pumped solar heating systems. The solar thermal market was valued at USD 14.1 billion, USD 14.9 billion, and USD 16.1 billion in 2022, 2023, and 2024, respectively.
  
• The pumped solar heating systems segment is set to reach USD 26.5 billion by 2034 on account of the growing installation of extensive systems that combine heat pump and solar thermal technologies. In October 2024, for example, a simulation in Ørum, Denmark, employed a 2.5 MW air-to-water heat pump with a 6,355 m² solar thermal array, which is expected to lower the levelized cost of heat by up to 37%. The product rollout will also be enhanced by the growing use of seasonal thermal energy storage technologies.
  
• The thermosiphon solar heating systems is expected to grow at a 7.5% CAGR from 2025 to 2034, supported by their ease of installation in residential environments and minimal maintenance requirements. These systems don't need pumps to work, which makes them ideal for off-grid and rural applications. They will also help product development because of their lower startup costs and compatibility with modest rooftop structures, especially in emerging economies that are looking for decentralized, affordable access to renewable energy.
  

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• Based on system, the market is segmented into small scale and large scale systems. The small scale segment held a market share of 62.7 % in 2024, driven by the emergence of compact thermal storage units optimized for domestic use. Ongoing developments in low-maintenance collector technologies, rise of utility-driven buyback programs, along with advancement of home automation systems will drive the business scenario. In addition, the availability of plug-and-play solar thermal kits will contribute to the business momentum.
  
• The large scale systems segment is likely to exceed USD 22 billion by 2034, driven by the increasing focus on sustainable and cost-effective energy solutions. Utilizing solar thermal technology for industrial heating helps reduce energy expenses. In 2022, a solar thermal system was deployed at PepsiCo's Sete Lagoas facility in Minas Gerais, Brazil, through a collaboration with TVP Solar. The industry's expansion will also be aided by more government incentives and rules encouraging the use of renewable energy.
  

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• The U.S. solar thermal market was valued at USD 620 million, USD 680 billion, and USD 750 million in 2022, 2023, and 2024, respectively. As of 2024, North America holds a market share of 3.7% which is anticipated to improve further by 2034.
  
• The U.S. market is anticipated to grow on account of increasing focus on pilot-scale innovations and technology commercialization. For instance, in April 2023, the DOE awarded USD 6.5 million to fund the research and development activities in photovoltaics and concentrating solar-thermal power through its Small Innovative Projects in Solar (SIPS) program. Additionally, rising public-private collaborations to scale up advanced solar systems will further influence market growth.
  
• The European solar thermal market will grow at a CAGR of more than 10% between 2025 and 2034. Rising focus on achieving climate neutrality, increasing deployment of renewable district heating systems, and integration of thermal energy storage into urban infrastructure will augment the product adoption. The development of building emission regulations, along with growing support for energy-efficient retrofits, will help solar thermal systems to gain market share.
  
• The Asia Pacific solar thermal market is projected to reach more than USD 23 billion by 2034. The market landscape will be supported by growing investments in long-duration energy storage and the use of cutting-edge solar thermal technologies. In March 2025, Vast Solar’s 30 MW/288 MWh concentrated solar thermal power facility in Port Augusta, Australia, received USD 180 million in federal funding. By providing dispatchable renewable energy, this project includes eight hours of thermal storage, aiming to improve grid stability and boost market growth.
  

Solar Thermal Market Share

• The top four companies operating in the solar thermal industry include Photon Energy Systems, Solareast Holdings, Greenonetec Solarindustrie, and BTE Solar, contributing to nearly 30.5% market share. Inorganic strategic ventures focused on developing modular plant designs and integrated thermal storage systems will contribute to the market growth. Market leaders also emphasize industrial customer and utility partnerships, enabling cost-effective heat supply and scalability to more temperature-sensitive applications in an evolving energy market.
  
• Industry players are emphasizing public-private partnerships and government grants to enable demonstration and deployment of solar thermal projects. The companies further intend to enhance their presence in emerging markets and improve their market penetration and access.
  

Solar Thermal Market Companies

• Ormat Technologies is a leader in renewable energy worldwide, focusing on solar thermal and geothermal power generation. The company's adjusted EBITDA in 2024 was USD 550.5 million, while its total revenues were USD 879.7 million. The company also concentrates on enhancing its solar thermal capabilities by adding energy storage solutions to increase dispatchability and grid stability.
  
• CONA is established in Austria and specializes in solar drying technologies. Together with partners, it distributes its technology in 35 countries to generate employment in rural regions and foster local technical competence through on-site training. Further, the company has received multiple awards for its contributions to renewable energy, including the SOLIDARITATSPREIS, the EURO-SOLAR Award, and the EDUARD-PLOIER-AWARD.
  

Eminent players operating in the solar thermal market are:

• CONA Solar
• G2 Energy
• GREENoneTEC Solarindustrie
• Inventive Power
• Linuo Ritter
• Módulo Solar
• Next Source
• Ormat Technologies
• Photon Energy Systems Limited
• Ritter XL Solar
• Solareast Group
• Shandong Linuo New Energy
• Sunoptimo
• T.E SOLAR
• Vicot
  

Solar Thermal Industry News

• In December 2024, a solar thermal installation using the combined system Dualsun's SPRING4 hybrid panels was completed in France. Further, the hybrid panels and a 9-kW heat pump make up the system, lowering 2 tonnes of CO2 emissions annually. The research additionally proves that solar thermal systems are feasible in a residential environment, providing notable energy and environmental advantages.
  
• In March 2024, Kyotherm built a 4 MW CSP thermal plant at the Heineken factory in Spain.  Developed by CSIN using Solatom’s linear Fresnel technology, the installation comprises 6,000 m² of collectors across 182 modules. It is expected to supply at least 3,500 MWh of solar steam annually, covering 10% of the brewery’s steam consumption and reducing CO₂ emissions by up to 1,300 tonnes annually.
  

This solar thermal market research report includes an in-depth coverage of the industry with estimates & forecasts in terms of revenue and volume in “USD Billion & GW” from 2021 to 2034, for the following segments:

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Market, By Collector

• Evacuated tube collector
• Flat plate collector
• Unglazed water collector
• Air collector

Market, By Type

• Thermosiphon
• Pumped

Market, By System

• Small Scale
• Large scale

Market, By Application

• Small scale DHW systems
• Large scale DHW systems
• Swimming pool heating
• Solar combi systems
• Others

Market, By End Use

• Food & beverage
• Textile
• Chemical
• Metal processing
• Mining
• Agriculture
• Machinery and automotive
• Others

The above information has been provided for the following countries:

• North America
  • U.S.
  • Canada
• Europe
  • Germany
  • France
  • Spain
  • Austria
  • Belgium
• Asia Pacific
  • China
  • India
  • Australia
  • Thailand
  • Vietnam
• Middle East & Africa
  • Saudi Arabia
  • Oman
  • Turkey
  • South Africa
• Latin America
  • Brazil
  • Chile
  • Mexico