The National Laboratory of the Rockies (NLR), formerly known as the National Renewable Energy Laboratory (NREL), has released its 2025 US Geothermal Market Report which documents the growth of the US geothermal industry over the past 4 years.
The report, developed by the NRL in collaboration with Geothermal Rising and the International Ground Source Heat Pump Association, provides policymakers and other stakeholders with an updated overview of the US geothermal market.
Geothermal Power-Generation Market
Geothermal power installed nameplate capacity saw an 8% increase from 2020 to 3.969 gigawatts-electric (GWe) as of 2024. This increase includes new installed capacity, capacity expansions/additions, and plant retirements. US-based geothermal companies, Ormat and Calpine, account for 69% of total installed capacity and 61% of all operating geothermal plants in the US.
-
Source: NLR - Geothermal power plants are predominately located in the western US where the region hosts high thermal gradients, heat flow, and permeability. California and Nevada host the most geothermal sites, 75 combined, of the 99 sites in the US.
- Power purchase agreements (PPA) have increased with 26 signed since the 2021 Geothermal Market Report was released. These PPAs represent more than 1000 MWe of new capacity commitments.
- R&D and commercial advancements are helping to further the industry. The Department of Energy’s Frontier Observatory for Research in Geothermal Energy (FORGE) has successfully shown a replicable process for developing enhanced geothermal system (EGS) reservoirs. Fervo Energy recorded the first commercial-scale EGS drilling and reservoir development pilot in the US, and Eavor Technologies drilled the first two-leg multilateral deep geothermal well in the US.
Source: NLR - The levelized cost of energy (LCOE) for EGS is declining. NLR projects the LCOE to hit levels of 2024 flash hydrothermal LCOE within the next decade based on the 2024 Annual Technology Baseline (ATB) Moderate Scenario (NLR, 2024).
- More than $1.5 billion has been raised in private capital for companies developing and commercializing next-generation geothermal technologies since 2021.
Source: NLR
Geothermal Heating and Cooling Market
- Geothermal heat pump (GHP) systems have seen increased adoption across various sectors, including residential, commercial, and industrial applications. Using data from the Residential Energy Consumption Survey and the Commercial Building Energy Consumption Survey, the NRL estimates 1.27 million residential housing units and 27,300 commercial buildings across the US have GHP installations.
Source: NLR - Incentives have helped the industry progress as 34 states and Washington, DC, have implemented incentive policies for GHPs.
- Oak Ridge National Laboratory estimates that deploying GHPs in 68% of US single-family building floor space by 2050 could reduce electric power system costs by up to $306 billion and wholesale electricity marginal costs by up to $606 billion.
- Interest in energy efficiency in buildings has prompted the rise of thermal energy networks (TENs). In 2024, the natural gas utility Eversource Energy commissioned a first-of-its-kind US utility-owned geothermal TEN pilot in Massachusetts that connects decentralized GHPs in 36 buildings, including 24 residential and five commercial buildings, to three borehole fields.
Emerging Opportunities
- Geothermal energy has emerged as a resource for US energy security and independence as it can strengthen the electric grid and provide resilience against extreme weather, power outages, and cyberattacks. Because of this, several geothermal energy projects have been greenlit by the US Department of Defense in locations including Idaho, Alaska, California, Texas, and Nevada.
- Rapid growth in AI-driven data center demand is driving the need for reliable power, and geothermal energy could help meet this demand while reducing peak cooling loads through underground thermal energy storage.
- The NRL reports that superhot geothermal systems could produce five to 10 times more thermal energy per well than conventional geothermal technologies.
- Geothermal energy can support grid stability and act as a balancing resource, with hybrid geothermal–solar plants delivering both baseload and peaking power. Geological thermal energy storage (GeoTES) is also emerging as another growing application of geothermal with one of two projects aiming to develop a 100-kWe demonstration power plant with more than 12 hours of GeoTES in depleted oil reservoirs in Kern County, California. A second GeoTES demonstration project is planned at Kern Front Oil Field in Kern County.
- Geothermal brine represents another emerging opportunity for lithium extraction. In the Salton Sea, resources are estimated at nearly 3,400 kilotons that could support a domestic US lithium industry.
“This comprehensive report offers insight for industry experts as well as those just entering the geothermal market,” said Amanda Kolker, NLR laboratory program manager for geothermal and geosciences. “We look forward to seeing continued advancements in emerging technologies, de-risking of conventional technologies, and improved access to reliable resource data and analysis in the years to come.”