The energy storage industry’s seven-year "spring" finally arrives in 2026.

Ask AI · What are the multiple driving factors behind the springtime in the energy storage industry?

(This article was authored by 万联万象 and is published with permission from Ti Media.)

By 万联万象

At the start of 2026, China’s energy storage industry has turned in an impressive set of results.

According to the latest data from the National Bureau of Statistics, in January–February 2026, the output of lithium batteries used for energy storage increased 84% year over year. This growth rate far exceeded market expectations, showing strong growth momentum across the energy storage industrial chain.

Meanwhile, statistics from China’s General Administration of Customs show that, over the same period, the total export value of inverters from China reached $1.66 billion, up 56% year over year. Of that, the export value in February alone was $820 million, up as much as 81.4%; export volume was 7.82 million units, up 9.1%.

Behind these standout figures are multiple factors working together, including rising global energy security demand, a surge in European natural gas prices, and the rollout of domestic “compute-power-and-grid” policy coordination.

After waiting for 7 years, the energy storage industry—this spring— is now entering a new upturn cycle of favorable conditions.

Blooming at home and abroad

From the domestic market to overseas markets, the energy storage industry is seeing the long-awaited spring.

According to a research report published by Huayuan Securities on March 23, 2026, in January–February 2026, the scale of newly tendered capacity for domestic new-type energy storage reached 136.7GWh, up 120.8% year over year; the total newly added installed capacity was 24.18GWh, up 472.06% (capacity basis).

This data indicates that China’s energy storage market is not only expanding rapidly in scale, but also showing an accelerating trend in project implementation speed.

Overseas markets have been equally active. In February 2026, Chinese companies secured 30 energy storage orders in overseas markets in total, with total capacity of 35.71GWh, involving multiple leading industry players such as Ternary Energy Storage, Chint Energy, TBEA, BYD, EVE Energy Storage, NR Electric, Contemporary Amperex Technology, and Sungrow Power Supply.

Securing these orders not only reflects the international competitiveness of China’s energy storage enterprises, but also shows that global markets recognize China’s energy storage technologies and products.

This wave of energy storage boom has a clear logic of drivers. In Europe, natural gas prices climbed to the highest level since 2024, directly raising residents’ electricity costs, significantly improving the economics of the self-use photovoltaic-plus-storage model and clearly shortening the payback period. At the same time, several European countries introduced supporting policies and streamlined approval procedures, further stimulating the release of energy storage demand.

In the domestic market, the “compute-power-and-grid” coordination policy was written into the government work report for the first time. Demand for green electricity for data centers increased significantly, opening up new market space for energy storage applications. More importantly, global anxiety about energy security is continually intensifying. Countries are accelerating their efforts to pursue energy independence strategies. As a key link for enhancing the flexibility and reliability of energy systems, the strategic value of energy storage is becoming increasingly prominent.

Europe is especially “hot”

Looking at export structure, in January–February 2026, inverter exports showed clear regional characteristics.

According to data released by China’s General Administration of Customs in March 2026, Europe became the highest-value destination for China’s inverter exports, reaching $620 million; the Asia-Pacific region came next with export value of $480 million; the Middle East was $214 million; Africa was $170 million; Latin America was $132 million; and North America was $46 million.

By country distribution, the Top 10 export markets are, in order: the Netherlands, Germany, Australia, India, the United Arab Emirates, Brazil, Nigeria, Japan, Hungary, and Italy.

By province distribution within China, Guangdong had the highest export value at $620 million; Zhejiang ranked second with $470 million; Jiangsu third with $240 million; and Anhui fourth with $170 million. This distribution pattern reflects the broad global layout of China’s inverter companies and their differentiated competitive strategies.

The performance in the European market is particularly worth noting. Xingzheng Electric New (兴证电新) pointed out in its research report that, given current global power supply tightness alongside rising fossil energy prices, the economic advantages and independent supply benefits of new energy are highlighted—highly consistent with the logic that the Russia-Ukraine conflict in 2022 drove the surge in Europe’s demand for photovoltaic-plus-storage.

In Europe, TTF natural gas prices reached the highest level since 2024, pushing up residents’ electricity costs and further improving the economics of the self-use photovoltaic-plus-storage model, with the payback period shortened even more visibly. Combined with supporting policies rolled out in multiple countries and streamlined approval processes, energy storage demand in Europe in the first half of 2026 will become the core growth pole in the global energy storage market.

This view is supported by market data: as Europe is the largest market for China’s inverter exports, its continued demand growth provides a stable source of orders for China’s energy storage enterprises.

The “spring” of energy storage in the eyes of institutions

The high-visibility, high-demand cycle in the energy storage industry is shifting from short-term event-driven momentum to long-term structural demand support. In its weekly tracking report on the power equipment industry (March 22, 2026), Soochow Securities noted that with the upward trend in energy storage lithium batteries, both performance and valuations are expected to rise. This judgment is based on an in-depth analysis of the industry’s fundamentals:

On the one hand, the sustained decline in energy storage costs continuously improves the economics of energy storage projects; on the other hand, increased policy support provides a favorable external environment for industry development. More importantly, ongoing advances in energy storage technology have significantly improved energy storage systems in areas such as safety, efficiency, and lifespan, further driving the release of market demand.

Xingzheng Electric New believes that, under current macroeconomic volatility, energy storage is one of the strongest “certainty” sectors, and valuation for core targets is within a reasonable range of around 20x, with no obvious bubble. Even if geopolitical conflicts ease later, the rigid demand for global power investment will continue to support the industry’s favorable cycle, so there is no need to overly worry about the persistence of demand.

This view is supported by industry data: according to the International Energy Agency’s forecast, by 2030 global energy storage installed capacity will reach over 1000GWh, with a compound annual growth rate exceeding 30%. This growth expectation provides ample long-term development room for the energy storage industry.

In a research report, Huayuan Securities states that, aside from short-term “rush exports” driven by export tax rebate policies and marginal improvement in overseas tariff policies, the sustained commissioning of projects driven by factors such as rising penetration of new energy, improvements in business models, data center grid interconnection, and energy security—are the medium- to long-term drivers of sustained industry favorable conditions.

With these driving factors layered on top of one another, a powerful growth engine is formed: rising penetration of new energy increases demand for energy storage for grid peak shaving and frequency regulation; improvements in business models enhance the profitability of energy storage projects; grid interconnection for data centers opens up new application scenarios for energy storage; and rising energy security demand drives the development of the energy storage industry from a strategic level.

From the perspective of which segments benefit along the industrial chain, performance upside is most prominent in the inverter and energy storage integration segments, and upstream energy storage battery segments will also fully benefit early in the upturn cycle. As the core component of an energy storage system, inverters have relatively high technical barriers, and market competition is relatively concentrated; leading companies are expected to benefit fully from the improvement in industry conditions.

Energy storage integration segments benefit from expanding project scales and improving system integration capabilities. Companies with the ability to provide integrated solutions will gain a larger share of the market. Upstream energy storage battery segments, although facing some pricing pressure, will still secure good development opportunities as demand grows rapidly and technology continues to advance, especially for firms with cost and technology advantages.

Conclusion

Since 2019, the energy storage industry has been looking forward to spring. At the start of 2026, the industry’s impressive performance not only reflects strong current market demand, but also signals a long-term development trend that remains positive.

Driven by multiple factors—rising global energy security demand, increased policy support, technological progress, and falling costs—the energy storage industry is entering a new upturn cycle of favorable conditions. The word “spring” can truly be applied to the energy storage industry.

Looking ahead, the energy storage industry’s development will show the following trends:

First, diversification of technology routes, with different routes leveraging their respective advantages in different application scenarios; second, the growing importance of system integration, where companies capable of providing integrated solutions will gain greater competitive advantages; third, continually improving levels of digitization and intelligence, making energy storage systems smarter, more efficient, and safer; fourth, ongoing innovation in business models, with the value of energy storage realized in multiple ways; and fifth, tighter coordination across the industrial chain, with upstream and downstream companies jointly promoting industry development through cooperation.

As energy storage technology continues to mature and the market continues to expand, energy storage will play an increasingly important role in the global energy transition, providing strong support for building a modern energy system that is clean, secure, and efficient.

• Information source notes:

Data sources: National Bureau of Statistics; China’s General Administration of Customs

Research report sources: Huayuan Securities; Soochow Securities; Xingzheng Electric New