In 2023, the commercial and industrial (C&I) energy storage sector saw a significant uptick in installations, marking a pivotal moment with 4.77 gigawatt-hours (GWh) of energy storage capacity added. This surge was largely fueled by China's C&I policy initiatives, including the implementation of time-of-use (TOU) electricity pricing and widened valley and peak pricing differentials, coupled with a decline in investment costs for energy storage infrastructure.
Consequently, the economic viability of C&I energy storage became increasingly compelling, catalyzing rapid growth within the energy storage industry. This robust momentum positioned 2023 as a promising starting point for C&I storage.
Projections from TrendForce indicate that 2024 is poised to witness even more substantial growth, with an anticipated addition of 8 gigawatts (GW) or 19 GWh in new C&I storage installations, marking a remarkable 128% and 153% increase from the previous year, respectively.
Additionally, according to the Energy Storage Association of America (EESA), user-side energy storage installations surged in 2023, adding 1.89 GW or 4.77 GWh, representing staggering increases of 626.9% and 412.9% compared to the preceding year.
Furthermore, based on data from the Global Grid Integration Institute (GGII), C&I energy storage shipments soared to 7 GWh in 2023, underscoring the sector's rapid expansion and market uptake.
From the latter half of 2023 up to February 2024, documented installations of C&I storage have already surged to 12.81 gigawatt-hours (GWh), signaling a robust foundation for future growth. Despite this impressive progress, the C&I storage sector is still in its early stages.
Analysis of documented installations reveals significant strides: in the six months of 2023, user-side energy storage installations totaled 4.18 gigawatts (GW) or 10.00 GWh, followed by a noteworthy 1.12 GW or 2.81 GWh in January and February 2024. These figures bode well for continued growth throughout 2024.
According to forecasts by the Energy Storage Association of America (EESA), domestic C&I storage installations are projected to reach 4.8 GW or 9.5 GWh in 2024, with a year-on-year (YoY) growth rate of 99.2%. Subsequently, in 2025, installations are expected to climb further to 6.15 GW or 14.3 GWh, with a YoY growth rate of 50.5%.
Zhejiang, Guangdong, and Jiangsu Provinces emerge as frontrunners in China's documented installation projects.
According to the Energy Storage Association of America (EESA), in 2023, the total documented installation projects numbered 4666, with Zhejiang Province leading the pack at 1188 documented energy storage projects, followed closely by Guangdong and Jiangsu with 755 and 705 projects, respectively.
The combined documented projects in these three provinces account for approximately 60% of China's total projects, highlighting them as pivotal regions for the development of C&I energy storage in 2023. Meanwhile, other areas such as Shandong, Henan, Hubei, Anhui, and Fujian also witnessed substantial activity, each reporting more than 100 projects.
Data of Domestic Documented C&I Energy Storage Projects in 2023
TrendForce forecasts that in 2024, the C&I energy storage sector will see a significant expansion, with capacity additions reaching 8 gigawatts (GW) or 19 gigawatt-hours (GWh). This represents a remarkable increase of 128% and 153% compared to the previous year. The widening gap between electricity prices during off-peak and peak hours enhances the economic feasibility of C&I energy storage, thereby sustaining rapid growth in installations.
Projections for Added Energy Storage Installations in 2024 (Unit:GW)
Regarding costs, the price of lithium carbonate has significantly decreased. Since storage battery costs constitute over 60% of the total energy storage system (ESS) expenses, declines in battery prices and ESS prices are expected as key raw material prices decrease. This reduction in costs enhances the return on investment (ROI) of energy storage, encouraging greater flexibility in demand for C&I energy storage solutions.
In terms of installations in China, the domestic C&I storage market is still nascent but has already attracted considerable interest from cross-border companies spanning industries such as furniture, energy, consumer electronics, environmental technology, lithium-ion battery production, and solar energy. With ongoing power sector reforms driving an increasing gap in electricity prices between off-peak and peak hours, coupled with significant and stable power demand from C&I ESS owners, the economic attractiveness of C&I energy storage is high, fostering expectations for further installations.