Elastic energy is the potential energy stored in a material or physical system as the volume or shape is distorted. When objects are stretched or compressed, elastic energy is stored, according to the Physics Classroom.
Reversibility is the key to how elastic energy is stored and released. When force is applied to an elastic material, energy is transferred into the material, and then by yielding that energy to the surroundings, the object can return to its original shape. All materials have a certain point at which the force is too great, causing the material to break or irreversibly altering its internal structure. Elastic energy is potential energy and is stored by changing the inter-atomic distances between nuclei.
Thermal energy is the randomized distribution of kinetic energy within a material, which can occur from twisting, bending or by applying other types of force that distorts the material's shape. Common devices that use elastic energy to work are rubber bands, bungee cords, trampolines, springs, and bows and arrows.
Springs are a special instance when compression is used to create and store elastic potential energy. The more compressed a spring is, the more force the spring exerts when it returns to original form. When a spring is not compressed or stretched, there is no elastic energy stored, and the spring is said to be at its equilibrium position. An object possesses elastic energy when it is at any position other than that of its equilibrium.