How many more years can the energy storage industry be popular?

According to the latest industry data and trend analysis in 2025, the energy storage industry will continue to maintain rapid growth in the future, and is expected to continue to be hot until at least 2030, and gradually shift from scale expansion to high-quality development. The following is a comprehensive interpretation from the dimensions of core driving factors, market growth potential, technology iteration direction and potential risks:

1. Core driving factors: policy + demand + technology “troika”

Policy support continues to increase

Under China’s “dual carbon” goal, new energy storage is clearly defined as the key support for building a new power system. In 2025, the policy focus will shift to the improvement of market-oriented mechanisms, including electricity price compensation, spot trading, shared energy storage models, etc., to promote the transformation of energy storage from “policy-driven” to “market-driven”. For example, many places have introduced new energy storage capacity leasing policies to explore the revenue channels for energy storage to participate in the power market.

In overseas markets, the United States, Europe, the Middle East and other places stimulate demand through subsidies, tax incentives and local production capacity requirements. For example, in response to the increase in energy storage tariffs to 25% in 2026, the United States will see a rush to install in 2025.

Rigid demand for increased penetration of new energy

The proportion of new energy power generation continues to rise (China is expected to exceed 20% in 2025), and its volatility requires energy storage for peak and frequency regulation. The global proportion of new energy storage is increasing. In 2025, the global new photovoltaic installed capacity is expected to reach 490GW, driving the simultaneous growth of energy storage demand. In addition, emerging scenarios such as data centers have an explosive demand for “photovoltaic storage integration”, and photovoltaic storage-powered data centers in the Middle East are already economical.

Technological progress and cost reduction

Battery cell technology: large-capacity battery cells (500Ah+) and long-term energy storage systems (4h+) are accelerating their popularization. In 2025, the cost of energy storage systems is expected to drop by 15%-20% compared with 202435.

Application of new materials: Sodium-ion batteries have entered the commercialization stage, and the advantages of solid-state batteries in safety and life are gradually emerging. 2025 may become the first year of large-scale application.

Intelligent upgrade: AI technology optimizes energy storage system scheduling and fault warning, and digital twin technology improves operation and maintenance efficiency510.

2. Market growth potential: Global multi-regional outbreak, structural opportunities highlighted

Regional market differentiation

China: In 2025, the installed capacity on the source-grid side is expected to exceed 110GWh, with Inner Mongolia, Xinjiang and other new energy provinces leading the way; the growth rate of industrial and commercial energy storage on the user side exceeds 50%, and centralized procurement of high-energy-consuming enterprises in central China has become a trend.

United States: The rush to install pre-meter energy storage has driven the new installed capacity to exceed 45GWh in 2025, and the high-gross-profit market has attracted Chinese companies to deploy local production capacity.

Europe: Policy subsidies and capacity market mechanisms are mature, and the growth rate is expected to exceed 60% in 2025, with Germany and Spain as the main incremental markets.

Middle East: New energy replacement plans in Saudi Arabia, the United Arab Emirates and other countries have spawned GWh-level projects, which may become the world’s fourth largest energy storage market in 2025.

Segmented track opportunities

Large storage: The global new installed capacity accounts for more than 70%, with 10GWh-level projects in the Middle East and independent energy storage power stations in the United States becoming the main force.

Industrial and commercial energy storage: The overseas market growth rate exceeds 100%, and the application scenarios are diversified (such as data centers and industrial parks).

Long-term energy storage: The demand for systems longer than 4 hours has surged, and the commercialization of flow batteries and compressed air energy storage technologies has accelerated.

3. Technology iteration direction: from “bigger” to “smarter”

Large-capacity battery cells and system integration

In 2025, the capacity of mainstream battery cells will reach 400Ah+, and the capacity of 20-foot container energy storage systems will exceed 8MWh. Leading companies such as CATL and Envision Energy will lead the technology upgrade.

Breakthrough in new energy storage technology

Sodium-ion batteries: BYD, CATL and others have launched dedicated energy storage products, and the mass production cost is expected to be lower than that of lithium batteries in 2025.

Solid-state batteries: Qingtao Energy, Tailan New Energy and other projects have been put into production, with high safety adapted to large-scale energy storage scenarios.

Grid-type energy storage: Huawei and Sungrow have laid out active grid support technology, and the penetration rate may reach 7GW in 2025.

Intelligence and material innovation

AI empowers battery life prediction and safe operation and maintenance, and silicon carbide (SiC) devices improve the efficiency of energy storage converters, driving the system energy density to increase by 30%.

4. Potential risks and challenges

Industry reshuffle and intensified competition

In 2024, low-price internal circulation will lead to the exit of small and medium-sized enterprises. In 2025, the market share of the top 10 enterprises may exceed 85%, and enterprises with backward technology or fragile capital chain will face elimination.

Uncertainty of policies and market mechanisms

In some regions, the energy storage dispatching rules are imperfect, and the peak-valley price difference income is unstable; the US tariff policy and the local production capacity requirements in the Middle East increase the difficulty of going overseas.

Technical bottlenecks and cost pressures

The industrialization of sodium electricity is constrained by the fluctuation of lithium prices, the mass production cost of solid-state batteries is high, and the cost of long-term energy storage needs to be further reduced to below 0.3 yuan/kWh.

5. Future Outlook: High growth can be expected before 2030

Market size

It is estimated that the global energy storage installed capacity will exceed 250GWh in 2025, and the market space will exceed 200 billion yuan; by 2030, China’s cumulative installed capacity of new energy storage may reach 220GW, and the total output value of the industry will exceed 3 trillion yuan.

Investment direction

High barrier link: Energy storage converters (PCS) and system integrators (such as Sungrow) have strong profitability and significant premium in overseas markets.

Technology-leading companies: CATL (battery cells), Haichen Energy Storage (sodium electricity), Huawei (grid-type energy storage), etc. have first-mover advantages.

Long-term energy storage track: Liquid flow batteries and compressed air energy storage projects have received policy support and are suitable for long-term layout.

The “fire” of the energy storage industry will continue at least until 2030, but the growth model will shift from extensive expansion to technology-driven and market-refined operations. In the next five years, companies with core technologies and global layout capabilities will dominate the market, and the intensity of policy support, the speed of technological cost reduction, and the progress of power market reform are key variables for the continued popularity of the industry. Investors can focus on sub-sectors such as large storage, industrial and commercial energy storage, and sodium electricity/solid-state batteries