China’s Solar Titans Bet Big on Batteries

• China’s solar giants pivot to batteries, bundling solar-plus-storage to beat panel glut, smooth grids, and sell dispatchable power—chasing 30–40% growth and stickier, all-in energy services.

China’s biggest solar manufacturers are moving into battery energy storage, seeking to offset margin pressure and oversupply in panels while tapping faster-growing demand. By bundling solar-plus-storage for utilities and industrial users, they aim to manage intermittency, shift loads, and ensure power after dark—keeping revenues steadier and offerings stickier.

Analysts see battery storage expanding 30%–40% annually, outpacing traditional PV. The pivot positions firms to lead next-generation grid infrastructure and deliver more dispatchable renewable power. Wider adoption could reshape demand for batteries, grid-scale storage, and integrated energy services, especially in markets with high renewable penetration or fragile grids, making paired solar-storage the industry default.

Which battery chemistries and financing models will dominate bundled solar-plus-storage deployments?

 Battery chemistries likely to dominate
- LFP (lithium iron phosphate): Cost-leading, safer, long cycle life; will be the default for 2–4 hour utility and C&I solar-plus-storage worldwide, led by China supply.
- NMC (nickel manganese cobalt): Higher energy density; will persist where space is tight or cold-weather performance is critical, but shrinking share due to cost and safety.
- Sodium-ion: Rapidly scaling in China; attractive for stationary PV-paired storage where energy density matters less and cost/supply-chain resilience matter more; strong candidate for 2–4 hour durations in emerging markets.
- Flow batteries (vanadium, iron): Niche growth for 6–12 hour applications and high-cycle, high-temperature sites; paired with PV to shift over-day energy and reduce degradation risk.
- Zinc-based (zinc-bromine/zinc-air) and iron-air: Early deployments for 8–100 hour needs; won’t dominate near term but may co-exist for long-duration PV shifting and resiliency.
- Second-life EV batteries: Select C&I microgrids and community storage where low capex trumps uniform performance; not mainstream utility-scale.

Financing models likely to dominate
- Solar-plus-storage PPAs: Bundled energy, capacity, and ancillary services in a single contract; increasingly with separate capacity and augmentation clauses.
- Capacity-tolling/resource-adequacy contracts: Offtakers pay for availability and dispatch rights; common in markets valuing firm capacity from PV+storage.
- Energy-as-a-Service/lease models (C&I): No-money-down subscriptions with fixed or indexed tariffs; provider owns/operates, customer gets bill savings and backup.
- Utility rate-base (regulated markets): Utilities own PV+storage with cost recovery; favors standard 4-hour LFP builds.
- Merchant plus hedges: Partial merchant revenues (arbitrage/ancillary) balanced with hedges or contracts-for-differences; growing in markets with price volatility.
- Community solar-plus-storage and VPP aggregation: Shared savings and bill-credit structures; revenue stacking from demand charge management and grid services.
- BOO/BOOT and project finance with tax incentives: Build-own-(operate)-transfer structures leveraging investment tax credits, transferability, and adders; DC-coupled designs used to optimize incentives and capture clipped PV.
- Securitization of contracted cash flows: Portfolio-level financing for behind-the-meter fleets and community projects to lower cost of capital.