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Elevated Stakes: Intense Competition Unfolds Among Energy Storage System Integrators

published: 2024-01-09 17:43

Last year, the energy storage industry faced concerns over battery supply chain tensions. Fortunately, this issue has been resolved, leading to a decline in the prices of energy storage batteries. Consequently, prices of Energy Storage Systems (ESS) have also dropped. Currently, domestic energy storage integrators are engaged in fierce competition, offering products that are increasingly similar, intensifying the price war.

As a result, price has become a pivotal factor for manufacturers to secure orders. However, relying solely on a low-price strategy for industry competitiveness is not sustainable in terms of industrial development. Looking ahead, companies equipped with a vertically integrated industrial chain, a global business layout, and robust overall strength will be better positioned to maintain their market presence.

Vertical and Integrated Industrial Chain:

The complete industrial chain of the energy storage system encompasses batteries, PCS, EMS, and BMS, with the highest costs typically associated with the latter. Moreover, the battery and PCS significantly impact product performance and safety. Given the increasingly specific and varied demands of downstream customers, being a mere integrator of diverse energy storage equipment is insufficient for ESS integrators.

To truly showcase their prowess, integrators must go beyond mere integration. Key factors for demonstrating strength lie in optimizing battery performance, ensuring the secure operation of thousands of battery cells, and enhancing the overall system lifespan. This multifaceted approach is crucial in meeting the unique requirements of downstream customers and solidifying the position of integrators in the industry.

In the past couple of years, the energy storage sector has experienced a significant boom. With enticing subsidies fueling the growth, new players are entering the field in droves. The energy storage industry has become a diverse landscape, posing the question of how enterprises can turn a profit in such a dynamic environment.

To navigate this terrain, an increasing number of companies are delving into each segment of system integration, fostering vertical and integrated business models. They are honing their product design and production processes to stay ahead of the curve. As a result, companies equipped with the capability for vertical and integrated manufacturing emerge as more competitive and powerful players in the industry.

Global Business Expansion:

Presently, the competition in the global market is fierce. On one hand, the overseas energy storage market offers lucrative prospects, enhancing the competitive landscape. On the flip side, entering the global market comes with a higher threshold. Recognizing this, leading enterprises are swiftly expanding their presence abroad, broadening their customer base and capturing market growth from various angles. By amassing more customer resources, enhancing order acquisition capabilities, fortifying their business footprint, and offering competitive pricing, these leading enterprises can swiftly gain a larger market share. Looking ahead, sustained success involves not only improving product quality but also establishing and deepening brand recognition. Enterprises must transition from merely taking their products global to having their brands make a global impact, ultimately ensuring long-term success in the global market.

Energy Storage Trends in 2024:

The global energy storage market is undergoing rapid development, experiencing explosive growth driven by the swift increase in new energy installations, evolving electricity trading models, declining raw material costs, and favorable policies. According to TrendForce, global new energy storage installations reached 52GW/117GWh in 2023. Looking ahead to 2024, TrendForce predicts a substantial increase, with the new installed capacity reaching 71GW/167GWh—a year-on-year growth of 36% and 43%.

In this trajectory, large-sized energy storage dominates the market, fueled by increasing installation demand. Commercial and industrial energy storage projects are gaining economic viability due to a widening gap between peak and off-peak electricity prices, leading to a predicted uptick in installations. While residential energy storage installations may not be as urgent for residents, the established profit model makes it a lucrative sector, projecting higher profit increments compared to commercial and industrial counterparts. On the profitability front, overseas large-sized Energy Storage System (ESS) integrators continue to benefit from the reduced prices of lithium carbonate. However, domestic integrators face challenges in profiting from large-sized energy storage systems, indicating a need for industry adjustment and recovery. Notably, leading energy storage system integrators with a higher proportion of overseas shipments and strong vertical and integrated manufacturing capabilities are poised to enjoy significant advantages in this competitive landscape.

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