Popular Track | Energy Storage Inverters: The Intelligent Heart of Energy Transition
Energy storage inverters (PCS, Power Conversion System) are essential components of energy storage systems, playing a crucial role in the bidirectional conversion of electrical energy. During charging, they convert alternating current (AC) from the grid or renewable energy sources into direct current (DC) for storage in batteries. When discharging, they invert the DC back to AC for use by loads. As the “bridge” connecting energy storage batteries to the grid or loads, the performance of PCS directly influences the efficiency, stability, and economic viability of energy storage systems.
With the increasing share of solar and wind energy and the rising demand for flexibility in power systems globally, the market for energy storage inverters has experienced significant growth. According to GGII data, global shipments of energy storage PCS exceeded 150 GW in 2023, with China accounting for over 60%. The market is expected to surpass 100 billion yuan by 2025.
In terms of technological advancements, integrated solar storage solutions, high-voltage cascaded systems, and grid-forming technologies are becoming industry focal points, transforming PCS from simple inverters into “smart grid regulators.”
As a core device connecting energy storage systems to the grid and loads, energy storage inverters evolve primarily around topological structures, control strategies, and application scenarios. Based on their connection methods, energy storage inverters can be broadly categorized into grid-connected, off-grid, and DC types. Grid-connected inverters are commonly used on the grid side or in commercial and industrial settings, requiring features such as grid connection/disconnection and frequency/voltage regulation. Off-grid inverters are suitable for microgrids or islanded operation environments and must support independent voltage and frequency. DC inverters are primarily used in solar storage systems or DC microgrids, achieving voltage matching and energy regulation through DC/DC conversion.
In terms of topology, energy storage inverters are transitioning from traditional unidirectional structures to high-efficiency, high-density bidirectional topologies. Common structures include bidirectional Buck-Boost, full bridge, and dual active bridge (DAB) designs. Among these, DABs are particularly popular in medium to high-power applications due to their strong bidirectional power transfer capability and support for high-frequency isolation. Furthermore, to facilitate multi-source cooperation and system integration, multi-port inverters are gradually gaining traction, especially in integrated solar storage systems.
Regarding control strategies, earlier systems primarily used current or voltage control methods, such as PI control and current-loop voltage-loop control. As system complexity has increased, more advanced techniques like model predictive control (MPC), virtual synchronous generator (VSG) control, and AI-based adaptive control algorithms have been introduced, enhancing dynamic response capabilities and intelligence. Energy storage inverters are now in a crucial phase of rapid development and structural upgrading.
In terms of applications, energy storage inverters are increasingly serving a variety of scenarios, such as grid frequency regulation, peak shaving and valley filling in commercial and industrial sectors, and integrated solar storage generation. This has led to heightened expectations for their rapid response and multi-mode operation abilities. Especially in solar storage systems, inverters must facilitate bidirectional energy flow while coordinating photovoltaic output with energy storage charging and discharging strategies, thereby improving the overall system’s economic viability and stability.
The energy storage inverter industry chain can be broadly categorized into upstream, midstream, and downstream segments, with each section interconnected and collaboratively advancing the storage industry. The upstream focuses on the supply of core components and raw materials, including power semiconductors (such as IGBT and SiC MOSFET), magnetic components, capacitors, inductors, control chips, and circuit boards. As wide-bandgap semiconductor materials like silicon carbide (SiC) and gallium nitride (GaN) mature, their advantages in high-voltage, high-frequency, and high-efficiency applications are becoming increasingly apparent, gradually replacing traditional silicon-based devices and driving the high-performance evolution of inverters. Additionally, localizing control chips and driver circuits has become a key technical focus, directly influencing inverter system response speeds and control accuracy.
The midstream consists of the design, manufacturing, and system integration of energy storage inverters, representing the core value of the entire industry chain. Companies in this phase are primarily responsible for inverter structural design, circuit topology selection, control algorithm development, and the integration of hardware and software systems, which involves relatively high technical barriers. A number of domestic companies have developed independent research capabilities, providing a variety of energy storage inverter products for different applications, such as high-voltage, high-power inverters for the grid side and modular, multifunctional units for commercial and residential use. As the market demands higher efficiency, power density, and intelligent control, midstream companies continue to optimize designs and adopt new materials, improve cooling solutions, and develop more complex energy management systems to enhance product stability and adaptability.
The downstream encompasses energy storage system integrators, power investors, commercial and industrial users, and grid operators, representing the final application scenarios for inverters and directly determining their product forms and technical requirements. As the new power system construction progresses, energy storage has gradually transitioned from a supportive role to a more central power resource, expanding application scenarios from traditional grid frequency regulation to peak shaving and valley filling, integrated solar storage, virtual power plants, microgrids, and even vehicle-to-grid interactions for electric vehicles. Different scenarios have varying performance requirements for inverters; for instance, grid-side storage emphasizes response speed and grid connection capabilities, while residential systems prioritize efficiency, size, and cost-effectiveness. This has driven downstream applications to continuously push for the integration and intelligence of inverter functionalities.
Overall, the upstream, midstream, and downstream segments of energy storage inverters are closely linked, with technological innovations primarily concentrated in the midstream. However, the potential for development is highly reliant on breakthroughs in upstream core components and the continuous expansion of downstream application scenarios. Under the backdrop of the “dual carbon” initiative and the trend of energy transformation, energy storage inverters play a pivotal role in supporting energy storage systems. In April 2021, the National Development and Reform Commission and the National Energy Administration jointly issued the “Guiding Opinions on Accelerating the Development of New Energy Storage” (draft for comments), outlining that China’s new energy storage plan aims to exceed 30 GW of installed capacity by 2025. In February 2025, to promote the high-quality development of the new energy storage manufacturing industry, eight departments, including the Ministry of Industry and Information Technology, jointly issued the “Action Plan for the High-Quality Development of the New Energy Storage Manufacturing Industry.”
Recent analysis of financing for related companies shows that from 2020 to 2024, financing events in the energy storage inverter sector initially increased, then declined. The peak occurred in 2021 with 30 financing events, which subsequently decreased each year, leaving only 5 events by 2024, indicating a significant drop. In terms of financing amounts, 2023 saw a peak, but 2024 experienced a steep decline, reflecting that the energy storage inverter sector may have experienced an investment boom from 2021 to 2023, followed by a rapid cooling of capital enthusiasm and a more stable market or potential reorganization thereafter.
Related Companies
Qianfan Yi Digital Energy was established in December 2022 and is a provider of core power equipment and solutions for energy storage systems. Their business encompasses energy storage inverters, power quality management, and intelligent energy monitoring systems applicable in various scenarios, including supporting renewable energy grid integration, power frequency regulation, demand response, microgrids, and commercial and residential applications. The core team consists of experienced experts from the power industry, and the founder participated in the development of Huawei’s first-generation UPS inverter algorithms. The company has a complete product matrix ranging from 50 kW to 215 kW standardized PCS modules, along with smart STS and DC/DC products. Their distinctive products utilize a four-bridge arm topology combined with silicon carbide devices, covering power ranges from 50 kW to 2.5 MW for diverse applications.
Huazhi Energy was founded in June 2022 and is focused on the research, production, and system integration of core equipment for new energy. The company aims to productize solutions for energy storage core equipment, with a team experienced in storage, photovoltaics, wind power, charging stations, and artificial intelligence. Their products are used globally in various fields, providing stability and importance in facilitating renewable energy grid integration and demand response. In 2023, Huazhi Energy launched the industry’s first 125 kW energy storage system, achieving a system energy capacity of 250 kWh.
Shengyun Energy, established in April 2014, specializes in research and development of new energy storage technologies and products. The company provides integrated services encompassing energy storage equipment, system integration, and energy storage services. They work closely with upstream and downstream partners to deliver comprehensive solutions for energy storage station development, design, construction, and operations. In November 2024, Shengyun Energy secured nearly 100 million yuan in Series A financing, with the funds designated for the construction of a storage equipment manufacturing facility and the in-depth research and development of PCS devices.
In March 2025, the country’s first hybrid grid-forming energy storage project successfully connected to the grid. This project is a significant technological research and demonstration initiative by the National Energy Group. In February 2025, Tesla’s Shanghai energy storage super factory officially commenced production, marking a new chapter in Tesla’s business in the Chinese market.
In January 2025, the State Grid Xinjiang Electric Power Research Institute released the nation’s first group standard for grid-forming energy storage systems, filling a significant industry gap. This standard will guide the testing of grid-forming energy storage stations.
In December 2024, Envision Energy’s 5.X MW energy storage inverter began mass production, aimed at high reliability and power density while integrating advanced grid technology, demonstrating international leadership in performance.
In April 2024, Huawei launched the world’s first wind-liquid intelligent cooling commercial energy storage product, achieving breakthroughs in safety, thermal management, and power supply architectures.
