The Battle of Energy Storage System Integrators

Last year, the energy storage industry was once anxious about the tight battery supply chain. As the problem eased, the price of energy storage batteries continued to drop, and the quotations of downstream energy storage systems also fell accordingly.

At present, the competition among domestic energy storage system integrators is very fierce, the products are showing a trend of homogeneity, and the prices have also "involved" to new heights. Therefore, price has become a key factor for companies to obtain orders. From the perspective of industrial development, in a multi-party game, relying solely on low-price competitive strategies is not sustainable. In the future, companies with vertically integrated industrial chains, global business layout and strong comprehensive strength can quickly stand out.

01 Vertically integrated industrial chain

The energy storage system integration industry chain includes batteries, PCS, EMS, BMS and other links. Among them, the energy storage devices that account for the highest cost and have the greatest impact on product performance and product safety are mainly batteries and PCS.

As downstream customers put forward more specific and diversified requirements for products, energy storage system integrators are no longer just "aggregators" of various energy storage equipment. How to optimize battery performance, ensure the safe operation of thousands of cells, and improve System life has become a factor that tests the strength of integrators.

Energy storage has become a hot trend in the past two years. From the subsidy policies in various places to the many new and old players who have caught wind of the trend, the good scenery of energy storage has indeed attracted a large number of entrants.

Currently, the energy storage system integration market is a mixed bag with many participating companies. How can we truly get a share of this pie? More and more leading companies are deeply involved in all aspects of system integration through vertical integration, improving product design and production from top to bottom. Companies with integrated vertical manufacturing capabilities will be more competitive.

02 Global business layout

Currently, business competition in the global market is fierce, and the "high profit" attribute of overseas energy storage markets allows energy storage companies to have a better competitive landscape. However, at the same time, overseas markets also have higher entry barriers. Leading companies that are one step ahead have already quickly deployed and increased their overseas business, continuously strengthened the brand's coverage of end customers, and expanded market incremental space in many aspects.

Customer resources closer to the terminal, the ability to lock orders in advance, a more comprehensive business layout, and more advantageous prices all allow leading companies to quickly gain a higher market share. In the long run, on the basis of improving one's own products, building one's own brand and deepening customer awareness will be the moat for the stable business development of energy storage companies. Only by transforming from "product exporting" to "brand exporting" and continuing to enhance brand influence can we go global.

03 Energy storage development trends in 2024

Affected by various factors such as the rapid growth of new energy installed capacity, the development of power trading models, falling raw material costs, and policy guidance, the global new energy storage market has developed rapidly, and the energy storage market has experienced "explosive" growth in the past two years.

According to statistics, the world's newly installed energy storage capacity will be 52GW/117GWh in 2023; looking forward to 2024, it is expected that the world's newly installed energy storage capacity will be 71GW/167GWh in 2024, a year-on-year increase of 36%/43%, maintaining high growth.

In terms of incremental growth, Dazhu still maintains its absolute leading position. In terms of industrial and commercial storage, as the peak-to-valley electricity price gap continues to widen, the economics of the project have been cleared, and it is expected that there will be a certain increase in 2024. In terms of household savings, although the urgency of residents to install capacity has weakened, due to the early start of household savings and the relatively mature profit model, the increase in household savings in 24 years will be slightly higher than that of industrial and commercial savings.

From a profit perspective, overseas large-scale storage system integrators can still enjoy the dividends of lithium carbonate price cuts next year. The profits of domestic large-scale storage system integrators and PCS companies are already at the bottom, but it will take time for the industry to clear up. Leading energy storage system integrators with a high proportion of overseas shipments and vertically integrated manufacturing capabilities will have certain advantages.