Geothermal Energy Factsheet

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Geothermal Resource and Potential

  • Geothermal energy is derived from Earth’s natural heat.1 It exists in high enthalpy (volcanoes, geysers) and low enthalpy forms (heat stored in rocks in the Earth’s crust). Most heating and cooling applications utilize low enthalpy heat.2
  • Geothermal energy has two primary applications: heating/cooling and electricity generation.1 Ground source heat pumps (GSHPs) use 75% less energy than traditional heating and cooling systems.3
  • The U.S. has tapped less than 1% of its geothermal electricity resources; the majority is accessible through Enhanced Geothermal System (EGS) technology.4,5
  • Improving exploration and management technology could reduce development costs and risks, potentially increasing geothermal power generation 26-fold to 90 GW of always-on, flexible electricity generation capacity by 2050.6,7
  • The U.S., Indonesia, Turkey, Philippines, and New Zealand accounted for over 67% of global installed geothermal capacity in 2023.8 The U.S. leads with 4 GW of installed capacity. 95% of U.S. capacity is in California and Nevada.9
  • Geothermal electricity generation is projected to increase from 15.7 TWh in 2025 to 56 TWh by 2050.10,11
U.S. Geothermal Resources at 10 km Depth12
Most geothermal energy is in the Western U.S.

Geothermal Technology and Impacts

Direct Use and Heating/Cooling

  • GSHPs are the primary method for direct geothermal use, utilizing shallow ground as an energy reservoir that maintains nearly constant temperature.13
  • GSHPs transfer heat from buildings to the ground during cooling season and from the ground to buildings during heating season.13
  • The U.S. installed capacity of geothermal heating and cooling represents less than 10% of market potential.6
  • Direct-use applications include space and district heating, greenhouses, and commercial and industrial processes.16
Geothermal Heat Pump for Residential Heating14,15
Geothermal Heat Pump for Residential Heating

Electricity Generation

  • In 2025, the U.S. had the most installed geothermal capacity in the world, representing 0.4% of U.S. electricity generation.10
  • Hydrothermal energy from underground water reservoirs is the main thermal source for electricity generation. Water is pumped as steam to the surface to spin electricity-generating turbines.17
  • Dry steam plants route steam directly from geothermal reservoirs through turbines to drive generators.17
  • Flash steam plants pump high-pressure hot water into low-pressure surface tanks, causing rapid “flashing” to steam that spins turbine generators. These are the most common type of geothermal plants.17
Flash Steam Geothermal Power Plant20
Flash Steam Geothermal Power Plant
  • Binary cycle plants use separate closed-loop systems for geothermal water and working fluid. Heat exchangers transfer heat to the working fluid, causing it to flash to steam to power turbine generators.17
  • EGS technology under development could expand geothermal use to new geographic areas. EGS creates subsurface fracture systems to increase rock permeability, allowing injection of heat transfer fluid (typically water) that is heated by the rock and returned to the surface for electricity generation.18
  • The technical potential of new geothermal systems is second only to solar PV among renewable technologies and sufficient to meet global electricity demand 140 times over.19
  • The U.S. DOE estimates 90 GW of potential geothermal electric capacity in the continental U.S.5
  • Nascent technologies such as superhot geothermal could increase the potential of geothermal in the U.S. by making deeper and hotter resources available for development.5

Installation, Manufacturing, and Cost

  • The main stages of geothermal power development are resource exploration, drilling, reservoir/plant development, and power generation.20
  • Geothermal power projects have higher capital costs (average $7,000/kW for flash plants and $9,200 for binary plants) than onshore wind (average $1,700/kW) or utility-scale solar (average $1,600/kW).6 However, geothermal offers low operating costs and high capacity factors (ratio of actual power production to production potential): 65.9% in 2025 compared to 34.2% for wind and 24.4% for solar.10,20,21 Capacity factor is not 100% due to local resource degradation,22 seasonal efficiency changes,23 scale formation on piping surfaces,24 and intentional load following.25
  • In 2025, geothermal electricity cost $88/MWh, nearly half the price of coal or gas but about $10-$20 more than onshore wind and solar.26
  • The cost of EGS has dropped by over 50% since 2021, but capital costs remain higher than conventional systems: $9,140/kW for near-field EGS binaries versus $6,349/kW for conventional binaries.5
  • Geothermal plants qualified for the federal Production Tax Credit (PTC) as of 2020. The 2023 Inflation Reduction Act renewed and expanded the PTC, providing up to 2.75¢/kWh for geothermal electricity generation.19 Geothermal plants still qualify for PTC despite recent legislation, which will provide credits through 2033.28
  • If deep cost reductions for next-generation geothermal can be achieved, total global investment could reach $1T by 2035 and $2.5T by 2050.19

Environmental Impacts

  • Geothermal power plants do not burn fuel but release small amounts of SO2 and CO2. They emit 97% less acid rain-causing sulfur compounds and 99% less CO2 than similarly sized fossil fuel plants.30
  • Most geothermal plants inject used geothermal steam and water back into the earth, helping renew the resource and reduce emissions.30
  • Binary cycle plants consume 0.24-4.21 gal of water/kWh while flash plants use 1.59-2.84 gal/kWh, compared to 15 gal/kWh for average thermoelectric plants in 2015.31,32
  • Each year, U.S. geothermal electricity avoids emissions of 22 Mt of CO2, 0.2 Mt of nitrogen oxides, and 0.11 Mt of particulate matter from coal plants.6
  • Some geothermal facilities produce solid waste due to entrained solids, such as silica and sulfur, that can be recovered and recycled.33 Some of this waste (≈15%) is hazardous material.34
  • Some geothermal facilities produce solid waste that must be disposed of in approved sites, though some by-products can be recovered and recycled.26

Solutions and Sustainable Actions

Funding Opportunities

  • With high capacity factors, geothermal electricity generation could offset coal, natural gas, or nuclear power as baseload electricity supply.36
  • The IRA provided tax credits covering up to 30% of qualifying residential GSHP system costs, which were ended by recent legislation.37,38
  • Renewable Portfolio Standards (RPS) require electricity providers to obtain a minimum fraction of energy from renewable resources.39
  • Renewable Energy Certificates (RECs) are sold by renewable energy producers in addition to the electricity they produce; for a few cents per kWh, consumers can purchase RECs to “offset” their usage and help renewable energy become more competitive.40
  • Around 850 utilities in the U.S. offer customers the option to purchase renewable energy, or “green power.”41

 

Expansion of U.S. Geothermal Capacity5
Life Cycle GHG Emissions by Power Generation35
Cite As

Center for Sustainable Systems, University of Michigan. 2026. "Geothermal Energy Factsheet." Pub. No. CSS10-10.

  1. U.S. Department of Energy (DOE), National Renewable Energy Laboratory (NREL) (2021) “Geothermal Energy Basics.”
  2. Banks, D. (2008) An Introduction to Thermogeology: Ground Source Heating and Cooling.
  3. Geothermal Exchange Organization. (2019) Geothermal Benefits.
  4. U.S. Geological Survey (2008) Assessment of Moderate- and High-Temperature Geothermal Resources of the United States.
  5. U.S. National Lab of the Rockies (2025) 2025 U.S. Geothermal Market Report https://www.nlr.gov/geothermal/2025-us-geothermal-market-report#market-future
  6. U.S. DOE, Energy Efficiency and Renewable Energy (EERE) (2019) GeoVision: Harnessing the Heat Beneath Our Feet.
  7. U.S. DOE (2025) GeoVision
  8. International Renewable Energy Agency (2025) Country Rankings Capacity and Generation
  9. IEA Geothermal (2026) Annual Report 2024
  10. U.S. Energy Information Administration (EIA) (2026) Monthly Energy Review May 2026
  11. U.S. EIA (2026) Annual Energy Outlook 2026
  12. Massachusetts Institute of Technology (2006) The Future of Geothermal Energy: Impact of Enhanced Geothermal Systems (EGS) on the United States in the 21st Century.
  13. U.S. DOE, NREL (2019) “Geothermal Heat Pump Basics.”
  14. Adapted from Geothermal Exchange Organization, Inc. (2010) Home Heating with GeoExchange.
  15. Green Match (2025) Ground Source Heat Pumps in the UK_ A Complete Guide
  16. U.S. EPA (2019) Geothermal Heating and Cooling Technologies 
  17. U.S. DOE, EERE, Geothermal Technologies Office (GTO) (2023) "Electricity Generation.”
  18. U.S. DOE, EERE, GTO (2016) “How an Enhanced Geothermal System Works.”
  19. IEA (2025) The Future of Geothermal
  20. U.S. DOE, NREL (2009) 2008 Geothermal Technologies Market Report.
  21. International Renewable Energy Agency (IRENA) (2017) Geothermal Technology Brief https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2017/Aug/IRENA_Geothermal_Power_2017.pdf
  22. Sanyal, S., & Enedy, S. (2011) Fifty years of power generation at the geysers geothermal field, California - the lessons learned. https://doi.org/10.1016/B978-0-08-100337-4.00020-6
  23. Mines, G., Richard, C., Nathwani, J., Hanson, H., & Wood R. (2015) Geothermal Plant Capacity Factors. 40th Workshop on Geothermal Reservoir Engineering, https://inldigitallibrary.inl.gov/content/uploads/50/2026/04/6582262.pdf
  24. Penot, C., Martelo, D., & Paul, S. (2023) Corrrosion and Scaling in Geothermal Heat Exchangers. Applied Sciences, https://doi.org/10.3390/app132011549
  25. Weinand, J.M., Kleinebrahm, M., Sanjuan, B., Trutnevyte, E., Treyer, K., Claret, F., Dalla Longa, F., Burgherr, P., van der Zwaan, B., McKenna, R., & Stolten, R. (2025) The role of geothermal plants in the global 
    energy and materials transition. Nexus, https://doi.org/10.1016/j.ynexs.2025.100099
  26. Lazard (2025) Lazard’s 2025 LCOE Plus Report
  27. U.S. EPA (2023) “Renewable Electricity Production Tax Credit Information.”
  28. Arangos, I.H., Kim, H.R., & Wagner, G. (2025) America's Clean Energy Transition Will Continue Despite the One Big Beautiful Bill Act. Columbia Business School, https://business.columbia.edu/insights/climate/one-big-beautiful-bill-setback-clean-energy
  29. U.S. DOE, Idaho National Laboratory (2010) “What is Geothermal Energy?”
  30. U.S. EIA (2025) Geothermal energy and the environment
  31. U.S. DOE, EERE (2015) Water Efficient Energy Production for Geothermal Resources.
  32. Dieter, C., et al. (2018) "Estimated use of water in the United States in 2015." U.S. Geological Survey Circular 1441.
  33. U.S. DOE, EERE (2020) Geothermal Power Plants — Minimizing Solid Waste and Recovering Minerals.
  34. Stringfellow, W.T., & Camarillo M.K. (2025) Solid Wastes from Geothermal Energy Production and Implications for Direct Lithium Extraction, Energies, https://doi.org/10.3390/en18061359
  35. NREL (2021) Life Cycle Greenhouse Gas Emissions
  36. U.S. DOE, EERE, GTO (2021) “Geothermal FAQs.”
  37. DSIRE (2022) “Federal Tax Credits for Residential Renewable Energy.”
  38. Geothermal Finder (2026) Geothermal incentives after the federal credit ended: your 2026 state guide. https://geothermalfinder.com/research/geothermal-incentives-by-state/
  39. U.S. EPA (2021) “State Renewable Energy Resources.”
  40. U.S. DOE, NREL (2015) “Renewable Electricity: How do you know you are using it?”
  41. U.S. EPA (2018) "Utility Green Power Products."

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