What's Happening?
Ormat Technologies, a Nevada-based independent power producer, has reported a substantial increase in its energy storage revenue, which more than doubled in the third quarter of 2025. The company operates
a diverse portfolio of geothermal, waste heat recovery, solar, and energy storage resources. In a recent earnings call, Ormat executives highlighted a 108% year-over-year growth in energy storage revenue, driven by favorable seasonality and higher capacity prices in the PJM Interconnection. Despite challenges such as grid disruptions and transmission upgrades, Ormat's overall revenue increased by nearly 18% compared to the previous year. The company is also expanding its energy generation and storage capacity, with plans to nearly double by 2028.
Why It's Important?
The growth in Ormat's energy storage segment underscores the increasing importance of renewable energy and storage solutions in the U.S. energy market. As the country continues to transition towards cleaner energy sources, companies like Ormat are positioned to benefit from policy incentives such as the Inflation Reduction Act of 2022 and the One Big Beautiful Bill Act of 2025. These policies provide tax benefits for energy storage and geothermal projects, encouraging further investment in these areas. Ormat's expansion plans, particularly in geothermal and solar energy, could contribute to a more sustainable energy infrastructure, reducing reliance on fossil fuels and enhancing grid reliability.
What's Next?
Ormat plans to continue its expansion in energy storage and geothermal projects, with significant growth expected in both U.S. and international markets. The company is also advancing its enhanced geothermal systems (EGS) strategy through partnerships with SLB and Sage Geosystems. These partnerships aim to develop commercial-scale power plants, potentially operational by 2026. As Ormat navigates challenges related to foreign sourcing rules and tax credit eligibility, its strategic focus on safe-harboring components could mitigate near-term impacts and support long-term growth.
