Energy storage is booming! Understand the opportunities for investment in this article.

This year, the global energy storage market has witnessed a “China moment.”

★ By the end of September, my country’s installed capacity of new energy storage exceeded 100 million kilowatts, a more than 30-fold increase compared to the end of the 13th Five-Year Plan period. Its installed capacity accounts for over 40% of the global total, ranking first in the world.

★ In the first half of the year, Chinese energy storage companies secured 163 GWh of new overseas orders, a year-on-year increase of 246%, covering more than 50 countries and regions worldwide, involving over 50 companies.

It can be said that 2025 will be a “boom year” for Chinese energy storage companies going global. How should investors seize the investment opportunities in this field?

Energy storage refers to storing energy in a medium or device and releasing it when needed.

For example, energy storage in a power system can be understood as a “reservoir,” addressing the “mismatch” between wind and solar power generation. When winds are strong and sunlight is abundant, power generation is high, but electricity consumption may not be, leading to waste. Storing energy in a storage system and releasing it according to actual electricity demand allows for the efficient use of resources.

Energy storage essentially addresses the mismatch between energy supply and demand, and it can be applied in all stages of the power system, including power generation, transmission, transformation, distribution, and consumption.

Based on application scenarios, it can generally be divided into three main categories: “large-scale storage,” “residential storage,” and “commercial and industrial storage.”

★ Large-scale energy storage: Think of it as a “national team power bank,” primarily used on the power supply and grid sides. It’s massive in scale and can be used in conjunction with wind and solar power generation. It can adjust power output according to peak and off-peak periods and provide frequency regulation services to the grid company.

★ Home energy storage: Can be seen as a “home version of a power bank.” It can automatically switch during power outages to ensure a stable power supply for the home. It can also store electricity when electricity prices are low and use it when prices are high, reducing electricity costs. In places like Europe and America where residential solar power is widely used, it can also be used to store solar energy.

★ Industrial and commercial energy storage: Primarily used in factories, businesses, and data centers, it reduces electricity costs through peak-valley arbitrage and serves as a backup power source to ensure a continuous and stable power supply.

Simply put, the global surge and rapid growth in energy storage demand is driven by a combination of factors: rigid demand, policy incentives, and improved economics.

In recent years, the proportion of renewable energy generation has been increasing daily, while the utilization rate of renewable energy has declined. In the first half of 2025, my country’s wind curtailment rate was 6.6% and solar curtailment rate was 5.7%, both showing a year-on-year increase, driving continuous growth in demand for energy storage installations.

This year, the “Notice on Deepening the Market-Oriented Reform of Renewable Energy Feed-in Tariffs to Promote High-Quality Development of Renewable Energy” (Document No. 136) abolished mandatory energy storage allocation for renewable energy, prompting a shift in domestic large-scale energy storage from policy-mandated allocation to market-driven profitability, ushering in a cyclical reversal.

Document No. 136 has propelled the industry from “mandatory energy storage” to the era of “independent energy storage.” Besides coordinating with wind and solar power generation, independent energy storage can theoretically generate revenue through multiple methods, including peak-valley arbitrage, capacity leasing, capacity compensation, and ancillary services. Furthermore, the cost of energy storage is continuously decreasing, leading to an improvement in the overall profitability of the energy storage industry.

There’s a saying: “The end of AI is electricity, and the core of electricity is energy storage,” which succinctly captures AI’s rigid demand for energy.

Developing AI requires powerful AI Data Centers (AIDCs), which rely heavily on a stable power system. “AIDC + Energy Storage” is becoming a new growth engine.

On the one hand, data centers exhibit high load density and large fluctuations in their electricity demand. Energy storage systems can reduce the grid-connected capacity of data centers, smooth out fluctuations, and reduce the impact on the power grid. On the other hand, energy storage systems can effectively save on the operating costs of AIDCs through “peak-valley arbitrage.”

Data shows that the data center energy storage market has vast potential. The global and Chinese data center energy storage markets are expected to reach 212 GWh and 98.8 GWh respectively by 2030, with a compound annual growth rate of approximately 49% from 2023 to 2030.

Looking ahead to 2026, from the demand side, domestic energy storage policies are shifting from mandatory energy storage allocation to independent energy storage. Local governments are intensively introducing energy storage capacity electricity price compensation policies, driving continuous optimization of energy storage installation returns and promoting continuous growth in domestic energy storage installation demand.

Globally, the rapid development of AI in the United States has highlighted energy consumption issues, leading to persistent power supply shortages. European countries are accelerating efforts to address grid instability and improve the peak-valley price spread, resulting in increased returns on energy storage installations. In Southeast Asia, South Africa, Australia, and other regions, unstable electricity prices are driving rapid growth in residential energy storage demand. The Middle East, India, Brazil, and other regions have significant potential for large-scale energy storage demand, and emerging market governments are frequently introducing supportive policies, which are expected to significantly increase energy storage installation demand.

From the supply side, the industry structure is rapidly optimizing, and profitability is expected to rebound. Driven by anti-involution policies, the domestic energy storage industry is expected to accelerate industrial consolidation, leading to a more optimized structure. Simultaneously, with battery cell prices bottoming out and rebounding, domestic pricing for energy storage system integration is expected to drive up prices, ultimately resulting in a bottoming out and recovery in overall industry profitability.

Research institutions predict that global energy storage installation demand will grow by over 30% in 2026, with large-scale storage installations increasing by 31%, residential storage by 15%, and commercial and industrial storage by 32%, marking the beginning of a new cycle.

While the energy storage industry is a “gold mine,” it has certain professional barriers to entry, high thresholds and great difficulty. Moreover, there are many listed companies in related fields, so individual investors face considerable challenges in finding truly worthwhile investment opportunities.