Ormat's Q2 2025 Earnings Call: Unpacking Key Contradictions in Geothermal Energy Development

Geothermal energy storage timeline and tariff impact, geothermal production and permitting, energy storage and FEOC concerns, enhanced geothermal systems (EGS) technology, permitting and drilling process are the key contradictions discussed in Ormat's latest 2025Q2 earnings call.



Record Financial Performance:
- Ormat reported a 9.9% increase in revenue for Q2 2025, with a 26.1% rise in net income and a 6.7% improvement in adjusted EBITDA.
- This outstanding performance was driven by the full recovery of the product segment revenue and margins, improved performance of the energy storage segment, higher merchant prices in the PGM market, and the acquisition of the Blue Mountain geothermal power plant.

Geothermal Development and Permitting:
- Ormat completed the acquisition of the Blue Mountain geothermal power plant and released for construction 50 megawatts of new projects, including 28 megawatts of geothermal and 22 megawatts of solar projects.
- The company benefited from accelerated permit approvals due to recent federal permitting reforms, which are expected to speed up development timelines for multiple projects in the U.S.

Energy Storage Segment Growth:
- The energy storage segment revenue increased by 62.7% to $14.5 million in Q2 2025, mainly due to the commencement of commercial operation of new energy store facilities and strong merchant prices in the PGM market.
- The anticipated strong performance in the energy storage business is expected to continue, driven by the benefits of newly commissioned storage facilities.

Tax Equity and Policy Support:
- Ormat secured $139 million of cash tax benefits through tax equity partnerships, with expectations for an annual tax benefit rate between 5% to 15% in 2025, excluding changes in law or one-time events.
- The extension of the PTC and ITC runways for both geothermal and energy storage segments, facilitated by the recently signed legislation, positions Ormat uniquely within the renewable energy sector.