The Geothermal Supply Chain Is America’s to Gain — or Lose

Why It Matters

A domestic geothermal supply chain would accelerate deployment, lower project costs, and generate significant manufacturing jobs, strengthening U.S. energy security and economic resilience.

Key Takeaways

• U.S. geothermal investment grew 100‑fold to $2.2 billion by 2025
• Oil‑and‑gas expertise covers over 75% of next‑gen equipment needs
• Domestic turbine production is limited; most ORC turbines imported
• Policy incentives and data gaps hinder rapid supply‑chain development

Pulse Analysis

The United States now sits at a pivotal moment for next‑generation geothermal, a technology that can deliver firm, baseload power while decarbonizing the grid. Investment has exploded, moving from a modest $22 million in 2018 to an anticipated $2.2 billion in 2025, and pilot projects are already feeding electricity into the system. Enhanced geothermal systems, closed‑loop designs, and super‑hot‑rock approaches promise higher temperatures and energy densities, expanding the resource base far beyond traditional hydrothermal sites. This surge positions geothermal as a strategic complement to wind and solar, especially as policymakers seek reliable, dispatchable clean energy.

However, the rapid deployment required to meet climate goals is constrained by supply‑chain bottlenecks. While the oil‑and‑gas sector supplies more than three‑quarters of the necessary equipment—drill rigs, bits, casings—these components were not engineered for the extreme conditions of super‑hot‑rock drilling. Specialized rigs and millimeter‑wave drilling tools remain scarce, and the domestic market for organic Rankine‑cycle turbines is virtually nonexistent, forcing developers to import most turbines. These gaps inflate project costs and introduce schedule risk, underscoring the need for a coordinated effort to repurpose existing manufacturing capacity and develop new domestic capabilities.

Policy can bridge the divide. The 48E investment credit and 45Y production credit already provide a decade of financial certainty for developers, but extending incentives like the 45X advanced manufacturing credit to geothermal equipment would directly stimulate U.S. production. Coupled with a comprehensive inventory of component needs, lead‑time data, and regional manufacturing strengths, such measures could unlock over 100,000 jobs across oil‑field equipment hubs in Texas and Louisiana to turbine clusters in the Southeast. By aligning federal and state actions with targeted research, the United States can capture a lucrative global supply chain, diversify regional economies, and cement its leadership in a clean‑energy technology poised for worldwide adoption.