Renewable-powered heat systems could supply up to a third of U.S. industrial heat demand by 2035, according to an April 2026 study by researchers at the University of California, Berkeley.

“Emerging low cost and efficient options such as thermal electric storage and industrial heat pumps offer a promising alternative when combined with local low-cost solar and wind power,” according to the study.

The study examined the effectiveness of specific renewable-powered heat sources and natural gas, the conventionally used source, at three distinct temperature ranges that industrial processes operate: steam generation below 200°C, typically used for food processing, textile manufacturing and low-pressure industrial steam; chemical processing from 200°C to 850°C, typically used for ethane cracking and petrochemical applications; and high-temperature manufacturing above 850°C, typically for glass melting, steel production and cement manufacturing.

“Heat pumps exhibit superior efficiency at low temperatures but declining performance at higher temperatures, while electric thermal storage maintains consistent efficiency across all temperature ranges,” the authors wrote. “Natural gas systems show moderate efficiency with gradual decline at higher temperatures.”

The study then examined the cost effectiveness of using renewable energy sources across the United States and found that regions with persistently high natural gas costs, particularly parts of California and the Northeast, could economically benefit from using renewable energy sources for any industrial temperature range. However, regions with lower gas prices and higher industrial power costs skew toward combustion being the least-cost option.

But as electricity prices decline and thermal storage costs fall, more regions could see benefits from using renewable-powered heat sources for industrial uses, including the Midwest and large industrial states with mixed price conditions, such as Louisiana.

Several challenges remain for widespread adoption of renewable-based industrial heating solutions, including reliability concerns for operations that must run continuously; upfront capital investment constraints for the alternative heating equipment; and limited availability to local renewable sources such as solar and wind, particularly in urban areas.

“Addressing these challenges will require targeted policy interventions, including incentives and financial mechanisms to reduce upfront investment barriers for industrial entities and/or regulatory support for industrial heat decarbonization to align long-term planning with net-zero targets,” according to the report.