A convergence of utility-scale pilot completions, new tariff pressures on lithium-ion batteries, and shifting regulatory frameworks is accelerating interest in thermal energy storage (TES) as a cost-competitive alternative for long-duration grid reliability in the United States.
Background
Thermal energy storage captures electrical energy as heat-using media such as concrete blocks, molten salt, or refractory bricks-and discharges it on demand, either as electricity or directly as industrial process heat. The technology differs from conventional battery systems: it relies on abundant, domestically sourced materials, carries lower capital costs for multi-hour applications, and is largely insulated from the supply-chain constraints affecting lithium-ion chemistries.
Global long-duration energy storage deployments rose 49% in 2025, exceeding 15 GWh, according to Wood Mackenzie's latest report. Within that segment, thermal storage accounted for 33% of 2025 long-duration installations by technology, trailing only compressed air energy storage at 45%. Despite that growth, long-duration storage comprised only 6% of total energy storage installations in 2025, according to Wood Mackenzie.
The economics of lithium-ion alternatives have deteriorated sharply under current U.S. trade policy. Import tariffs could raise battery costs for U.S. utility-scale energy storage installations by more than 50%, according to analysis by Wood Mackenzie. Separately, prices for four-hour battery systems rose 56% to 69% between January and mid-2025 and were expected to remain volatile "until clarity returns," according to Anza Renewables' quarterly pricing report. That volatility is intensifying utility interest in alternatives with domestically sourced supply chains.
Details
Two significant demonstration milestones have advanced the case for thermal storage at utility and industrial scale. In October 2025, Rondo Energy began commercial operation of what the company described as the world's largest industrial thermal energy storage system-a 100 MWh Rondo Heat Battery at a fuel production facility in California, powered exclusively by an on-site solar PV array. After ten weeks of operation, the system achieved all milestones for daily automatic operation, with storage temperatures above 1,000°C and a round-trip efficiency exceeding 97%, according to Rondo.
On the utility-grid side, EPRI, Southern Company, and Storworks completed testing of a 10 MWh concrete thermal energy storage (CTES) pilot at Alabama Power's Ernest C. Gaston Electric Generating plant-claimed at the time to be the largest such pilot in the world-with more than 80 charge-and-discharge cycles logged over 700 hours of operation. The system used supercritical steam from a gas unit to heat concrete blocks, which then discharged energy by converting feedwater into steam. The project received federal funding from the U.S. Department of Energy under award DE-FE0031761.
"Advancements in long-duration energy storage are key to unlocking the full potential of variable renewable energy resources on the path to net-zero," said Neva Espinoza, EPRI vice president of Energy Supply and Low-Carbon Resources, adding that CTES "could play an important role in efficiently delivering the reliable and affordable electricity society depends on."
In New York, Consolidated Edison is piloting Utility Thermal Energy Network (UTEN) systems at two Manhattan sites-Rockefeller Center and Chelsea-enabled by the 2022 Utility Thermal Energy Network and Jobs Act, using shared underground piping to deliver low-carbon heating and cooling to multiple buildings. The Chelsea project is expected to produce an estimated annual reduction of 1,400 metric tons of greenhouse gas emissions, along with the recovery of approximately 36,800 MMBtu of heat from New York City.
On the demand side, more than 45% of electricity consumption in U.S. buildings is used to meet thermal needs such as air conditioning and water heating, according to the U.S. Department of Energy. That structural load profile positions TES as a natural tool for peak-shaving and demand-side management at the building and district level.
Regulatory frameworks remain a constraint. As Rondo's chief executive noted in industry commentary, thermal batteries require customers to purchase renewable electricity at dynamic real-time prices-a structure unavailable in many states where industrial customers are limited to fixed daily tariff rates. "We are really eager to see the regulatory framework get modernized," said Rondo's CEO, according to IEEE Spectrum.
Outlook
The U.S. thermal energy storage materials market is projected to expand from USD 1.71 billion in 2025 to USD 2.44 billion by 2030, according to Fact.MR. Broader commercialization will depend on whether state utility commissions update tariff structures to enable time-of-use procurement for thermal loads and whether federal procurement programs extend explicit incentives to non-electrochemical storage technologies. Analysts at Sightline Climate note that most long-duration energy storage technologies remain pre-final investment decision, with roughly 98% of announced LDES capacity globally still not past FID, making policy-backed revenue guarantees the primary driver of large-scale deployment.
