Solar District Heating Market Report 2026

The solar district heating market size has grown rapidly in recent years. It will grow from $4.15 billion in 2025 to $4.63 billion in 2026 at a compound annual growth rate (CAGR) of 11.6%. The growth in the historic period can be attributed to early adoption of centralized heating infrastructure, expansion of urban district heating networks, availability of solar thermal collector technologies, rising fossil fuel heating costs, public sector renewable heating initiatives.

The solar district heating market size is expected to see rapid growth in the next few years. It will grow to $7.01 billion in 2030 at a compound annual growth rate (CAGR) of 10.9%. The growth in the forecast period can be attributed to increasing investments in low-carbon district heating, rising energy efficiency regulations, expansion of renewable heating mandates, growing deployment of large-scale thermal storage, increasing focus on urban decarbonization. Major trends in the forecast period include expansion of large-scale solar thermal collector fields, increasing integration with district heating networks, rising deployment of seasonal thermal energy storage, growing use of hybrid solar heating systems, enhanced focus on heat loss reduction.

The increasing adoption of sustainable energy is driving the growth of the solar district heating market. Governments, residents, and industries worldwide are focusing on embracing sustainable energy to reduce reliance on conventional energy sources and enhance the use of clean energy such as solar, wind, hydropower, and bioenergy. This rising trend is expected to boost the implementation of solar district heating systems, which provide the most cost-effective heating solutions for commercial, residential, and industrial customers compared to existing heating options. For example, in April 2023, a report from the National Renewable Energy Laboratory (NREL), a US-based research organization dedicated to advancing renewable energy and energy efficiency technologies, revealed that global photovoltaic (PV) installations reached 231 gigawatts of direct current (GWdc) in 2022, totaling 1.2 terawatts of direct current (TWdc) cumulatively. Annual installations are projected to exceed 300 GW by 2023 and surpass 400 GW by 2025. Therefore, the increasing adoption of sustainable energy is anticipated to enhance the utilization of solar district heating during the forecast period.

Leading companies in the solar district heating market are focusing on developing large-scale solar thermal solutions to decarbonize heating, reduce dependence on fossil fuels, and enhance energy efficiency in urban areas. Large-scale solar thermal solutions use extensive solar collector fields to capture and store solar heat for centralized district heating or industrial processes, providing renewable and efficient thermal energy on a citywide or industrial scale. For example, in December 2025, Kosovo Energy Corporation j.s.c.a., a Kosovo-based energy company, launched the largest solar thermal district heating project in the Western Balkans. The project includes a 40.6 MW solar collector field paired with a 408,000 m³ seasonal heat storage facility, allowing solar heat captured in summer to be stored and used during winter. The system will serve approximately 38,000 residential consumers in Pristina, reduce reliance on coal-based heating, and cut around 47,000 tonnes of CO₂ emissions annually.

In March 2023, Solar, a Europe-based company, acquired a 51% stake in ThermoNova A/S, a Denmark-based company specializing in high-capacity heat pumps for heating buildings. This acquisition is expected to accelerate the green transition in both small and large companies, particularly in the industrial sector, by offering energy-efficient heating solutions to replace traditional gas and oil-based systems. ThermoNova A/S's expertise in producing heat pumps aligns with the broader objective of advancing energy-efficient solutions in the solar district heating market.

Major companies operating in the solar district heating market are DESMI A/S, Göteborg Energi AB, Keppel District Heating and Cooling Services Pte. Ltd., Korea District Heating Corporation, LOGSTOR A/S, Arcon-Sunmark A/S, Savosolar Oyj, Solvis GmbH, S. O. L. I. D. GmbH, Sunamp Ltd., WOLF GmbH, Aalborg CSP A/S, Absolicon Solar Collector AB, Institut für Nachhaltige Technologien, BrightSource Energy Inc., CitrinSolar GmbH, Energie Solaire SA, Frenell GmbH, Heliodyne Inc., Industrial Solar GmbH, Sunlumo Technology GmbH, Sunoptimo SA, Suntrix Company Limited, TSK Flagsol Engineering GmbH, TVP Solar SA, Viessmann Werke GmbH & Co. KG, Wagner Solar GmbH, Institute for Sustainable Technologies, KBB Kollektorbau GmbH, Alfa Laval AB.

Western Europe was the largest region in the solar district heating market in 2025.Asia-Pacific is expected to be the fastest-growing region in the solar district heating market share during the forecast period. The regions covered in the solar district heating market report are Asia-Pacific, South East Asia, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the solar district heating market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Taiwan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The solar district heating market includes revenues earned by entities by providing services such as thermal energy storage, district heating system, and seasonal storage with the aid of solar thermal collectors and flat-plate collectors. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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