Energy Storage at a Crossroads: Are Companies Ready for a Shift Toward Value-Driven Growth?

The energy storage industry is at another crossroads. During the 13th International Energy Storage Summit and Exhibition (ESIE 2025) held from April 10 to 12, one of the most discussed topics was the recent announcement regarding the reform of the pricing mechanism for renewable energy, known as Document No. 136 issued by the National Development and Reform Commission on February 2025.

As policies shift from administrative mandates to market incentives, energy storage development is entering a new phase. Several companies have informed Beike Finance that, from a long-term perspective, Document No. 136 will promote market-driven growth in the industry. However, in the short term, the adjustments in demand bring challenges, and companies now face stringent tests regarding energy efficiency and economic viability.

The transition from a focus on “price competition” to “value competition” poses new challenges for enterprises. One of the most significant provisions in Document No. 136 states that “energy storage configuration shall not be a prerequisite for the approval, grid connection, or power purchase of new renewable energy projects,” effectively eliminating mandatory energy storage requirements that have historically been the largest demand driver in China’s energy storage market.

Wang Kai, the product director at Midea Group, explained, “In simple terms, Document No. 136 changes the narrative from ‘I have to build’ to ‘I want to build’ and ‘I choose to build.'” Many companies have expressed a positive attitude towards the new market landscape created by this document.

Shu Peng, co-founder and COO of Haibo Shichuang, stated, “We are very pleased with the release of Document No. 136, as it represents the market-oriented approach we have been hoping for. Energy storage is now at a point where it can deliver tangible value across various industries. With the introduction of Document No. 136, the market will truly be willing to pay for more efficient and safer energy storage products.”

According to Cao Wei, General Manager of the commercial energy storage product line at Sungrow Power Supply, the value of energy storage stations must be realized through long-term operation. He noted that in the current fiercely competitive pricing environment, there is often an overemphasis on initial investment costs, resulting in frequent low-cost bidding scenarios. However, merely driving down initial costs cannot sustain the healthy and stable operation of stations over a decade. The policy change in Document No. 136 will facilitate the industry’s shift from “price competition” to “value competition,” with future growth being driven more by market factors.

In a landscape where price is no longer the sole measurement, the investment in research, development, and innovation by companies will have the opportunity to be recognized and rewarded with premium pricing. However, as energy storage stations become genuine market products, the investments with design lifecycles of over ten years will face more severe tests.

Liu Si, R&D General Manager of Ruipu Lanjun Energy Storage Systems, remarked that the introduction of Document No. 136 has transformed the energy storage market into one driven by market forces, which will also generate real demand. For equipment manufacturers, this raises genuine performance requirements for products. He emphasized that customers who actually use the products are more concerned with long-term operation and stability. In essential scenarios where energy storage systems are called upon, the primary income source will be from the benefits of long-term operations.

According to Dai Yi, Vice President of the International Marketing Center at Nandu Power, the overseas commercial energy storage market demands that each project undergo detailed evaluations from development through financing, revenue models, and subsequent operations. For instance, projects in Australia require warranties of 10 to 15 years. Thus, the focus for companies is not just on reasonable initial investment costs, but also on ensuring that the project can operate stably for the required duration. With the implementation of Document No. 136, China’s energy storage market will gradually move towards commercialization, and companies’ accumulated experience in R&D and operations will become a competitive advantage.

While short-term growing pains are inevitable, the establishment of sustainable profit models remains a challenge. The core logic of Document No. 136 is still to advance electricity market reforms. A report from CITIC Futures indicated that from 2019 to 2024, the energy storage industry has shifted from being driven by policy requirements to being profit-driven, particularly as profit-driven grid-side energy storage exceeds 60%. The cancellation of mandatory energy storage requirements and a complete transition to market-driven operations have become inevitable trends for industry development.

In the new market landscape, short-term “growing pains” are difficult to avoid. Various companies have noted that the new policy is expected to impact demand in the short term, leading to a “vacuum” period for orders after the rush to install systems. Currently, the specific implementation details of the new policy and the alignment of local grids and pricing are still being clarified, and the industry remains observant.

As the environment becomes more market-oriented, companies will inevitably alter their order strategies. Shu Peng shared that Haibo Shichuang will focus on independent energy storage this year, stating, “We aim to earn through trading.” He mentioned that in this new development phase, the company will prioritize the quality of orders, emphasizing purely market-driven orders that consider cycle efficiency and safety, while reducing orders based solely on low prices.

Moreover, the energy storage industry needs to continue exploring reliable profit models in this new phase. Yu Zhenhua, Executive Vice President of the Zhongguancun Energy Storage Industry Technology Alliance, stated that Document No. 136 compels a reconstruction of the electricity market rules related to energy storage. The industry faces development challenges as it fully enters the market. From a future business model perspective, energy storage should achieve comprehensive revenue from peak-valley arbitrage, electricity spot market trading, and ancillary services. However, the profitability of specific projects will largely depend on the design of electricity market rules in each province. Additionally, advancing a capacity pricing mechanism for new types of energy storage will be an effective way to establish sustainable profit models.

Cao Wei believes that the revenue model for energy stations will shift from a primary focus on “arbitrage” to a “multi-dimensional overlay,” where time-of-use pricing will enhance arbitrage opportunities. Furthermore, additional revenue sources such as ancillary services, demand response compensation, carbon emission trading, and carbon asset realization will diversify the income streams for commercial energy storage stations.