Hot Topic: Energy Storage Inverters, the Intelligent Heart of Energy Transition
Energy storage inverters (PCS, Power Conversion System) are the core devices 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. Conversely, during discharging, they invert DC back to AC for use by loads. As the “bridge” connecting energy storage batteries with the grid or loads, the performance of PCS directly impacts the efficiency, stability, and economic viability of energy storage systems.
With the increasing share of wind and solar power in the global energy mix and the rising demand for flexibility in power systems, the energy storage inverter market is experiencing explosive 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 predicted to surpass 100 billion yuan by 2025.
Technological innovations such as integrated solar and storage solutions, high-voltage cascaded systems, and grid-forming technologies are becoming focal points in the industry, driving the evolution of PCS from simple inverter functions to “smart grid regulators.”
The technology roadmap for energy storage inverters primarily revolves around the evolution of topology structures, control strategies, and application scenarios. Based on their connection methods, energy storage inverters can be broadly categorized into three types: grid-connected, off-grid, and DC inverters. Grid-connected inverters are predominantly used in grid-side or commercial and industrial scenarios, requiring functionalities such as seamless switching between grid-connected and off-grid modes, frequency and voltage regulation. Off-grid inverters, on the other hand, are suitable for microgrid or island operation environments and must support independent voltage and frequency stability. DC inverters are mainly employed in solar and storage DC 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 highly efficient, high-density bidirectional topologies. Common structures include bidirectional Buck-Boost, full bridge, and dual-active bridge (DAB) configurations. Among these, DAB is particularly popular in mid-to-high power applications due to its strong bidirectional energy transfer capability and support for high-frequency isolation. Furthermore, multi-port inverters are also emerging to enable multi-source collaboration and system integration, especially in integrated solar and storage systems.
Regarding control strategies, early systems mainly 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 artificial intelligence-based adaptive control algorithms have been gradually introduced, enhancing the dynamic response capabilities and intelligence of the systems.
As key devices for ensuring safe and efficient operation, energy storage inverters are currently undergoing rapid development and structural upgrades. In application terms, energy storage inverters are increasingly serving diverse scenarios such as grid frequency regulation, peak-shaving and valley-filling for commercial and industrial applications, and combined solar-storage power generation. This has led to higher demands for their rapid response and multi-mode operational capabilities. In solar-storage systems, inverters must not only facilitate bidirectional energy flow but also coordinate solar output with energy storage charging and discharging strategies, thereby improving the overall system’s economic efficiency and stability.
The energy storage inverter industry chain can be broadly divided into three segments: upstream, midstream, and downstream, with each segment interconnected and collectively driving the development of the energy storage industry. The upstream focuses on supplying core components and raw materials, including power semiconductors (like IGBT and SiC MOSFET), magnetic components, capacitors, inductors, control chips, and circuit boards. The gradual maturation of wide bandgap semiconductor materials such as silicon carbide (SiC) and gallium nitride (GaN) has highlighted their advantages in high-voltage, high-frequency, and high-efficiency applications, progressively replacing traditional silicon-based devices and becoming a key driver for the performance enhancement of inverters. Additionally, the localization of control chips and driver circuits is currently a major focus of technological advancement, directly influencing the response speed and control precision of inverter systems.
The midstream involves the design, manufacturing, and system integration of energy storage inverters, which represents the core value of the entire industry chain. Companies at this stage are primarily responsible for the structural design of inverters, circuit topology selection, control algorithm development, and the integration of hardware and software systems, which presents a relatively high technical barrier. Currently, several domestic companies have developed independent R&D capabilities, offering various energy storage inverter products across different power levels suitable for various application scenarios, including high-voltage, high-power inverters for grid-side applications and modular, multifunctional units for commercial and residential use. As market demand for high efficiency, high power density, and intelligent control continues to grow, midstream enterprises are also optimizing designs, adopting new materials, improving heat dissipation solutions, and developing more complex energy management systems to enhance product stability and adaptability.
The downstream segment encompasses energy system integrators, power investors, commercial and industrial users, and grid operators. This segment represents the final application scenarios for inverters, directly determining their product forms and technical requirements. As the construction of new power systems progresses, energy storage is gradually shifting from a supportive regulatory role to a more central role in the electric power resource mix, with application scenarios expanding from traditional grid frequency regulation to peak-shaving, integrated solar-storage solutions, virtual power plants, microgrids, and even vehicle-to-grid interactions for electric vehicles. Different scenarios place varying performance demands on inverters; for instance, grid-side energy storage prioritizes response speed and grid integration capabilities, while residential systems emphasize efficiency, size, and cost-effectiveness. This has driven ongoing pressure for functional integration and intelligence upgrades in downstream applications.
Overall, the upstream, midstream, and downstream of energy storage inverters are closely interconnected, with technological innovation concentrated in the midstream. However, the release of development potential heavily relies on breakthroughs in upstream core components and the continuous expansion of downstream application scenarios. Against the backdrop of the “dual carbon” goals and the trend of energy transition, energy storage inverters are becoming essential to supporting energy storage systems.
In April 2021, China’s 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 the “14th Five-Year Plan” for new energy storage, which aims for installed capacity to exceed 30 GW by 2025. In February 2025, to promote the high-quality development of the new energy storage manufacturing industry, the Ministry of Industry and Information Technology and eight other departments jointly issued and implemented the “Action Plan for High-Quality Development of the New Energy Storage Manufacturing Industry.”
Recent financing trends in the energy storage inverter sector show a general upward trend from 2020 to 2024, followed by a decline. In 2021, the number of financing events peaked at 30 but has decreased annually, with only five events projected by 2024. In terms of financing amounts, 2023 saw a peak, but 2024 is expected to experience a significant drop, indicating that while the energy storage inverter sector experienced an investment boom from 2021 to 2023, capital interest has rapidly cooled off since 2023, suggesting a potential market correction.
Qianfan Yi Digital Energy was established in December 2022 and is a provider of core power equipment and solutions for energy storage systems. Its business covers various fields, including energy storage inverters, power quality management, and intelligent energy monitoring systems, applicable in scenarios such as renewable energy grid integration, power frequency regulation, demand-side response, microgrids, and commercial and residential applications. The founding team consists of seasoned experts from the power supply industry, with the founder having participated in the development of Huawei’s first-generation UPS inverter algorithm and served as a technical leader at a leading charging pile company, thus having comprehensive experience in the industry’s growth from inception to scale. As a technology-driven enterprise, Qianfan Yi Digital Energy has established a complete product matrix covering standardized PCS modules ranging from 50 kW to 215 kW, along with supporting products like intelligent STS and DC/DC converters. Currently, its products are undergoing certification from international authorities such as CGC, CE, and TUV. Their flagship product features a four-bridge arm topology and utilizes silicon carbide devices with a string-based centralized design, covering power ranges from 50 kW to 2.5 MW, suitable for diverse applications including commercial energy storage, large-scale grid-side storage, and solar-storage microgrids. Notably, their 130 kW PCS product, which employs a full silicon carbide solution, has achieved an industry-leading conversion efficiency of 99.16% and was the first to receive the new national standard certification for 130 kW PCS. This product series not only fully complies with the latest industry standards but also aligns with the development goals highlighted in the national “Action Plan for High-Quality Development of the New Energy Storage Manufacturing Industry,” which aims to enhance energy efficiency and system stability. In February 2025, Qianfan Yi Digital Energy completed a multi-million yuan Series A financing round led by Yongzhou Capital, which will primarily be used for overseas certification of its PCS products, new product development, and market expansion.
Huazhi Energy, established in June 2022, focuses on the R&D, production, and system integration of core equipment for renewable energy. The company leverages over a decade of technical experience in energy storage, photovoltaics, wind power, charging piles, and artificial intelligence to develop stable and impactful storage products and systems utilized globally. Huazhi Energy targets the commercial and industrial storage market with its proprietary PCS designed specifically for commercial use, featuring a patented vertical cooling design that achieves optimal energy density in limited space, facilitating flexible deployment and easy maintenance. In 2023, Huazhi Energy launched the industry’s first 125 kW energy storage system, paired with a 280 Ah battery cell, increasing system energy capacity to 250 kWh. In January 2025, the company completed a Series A+ financing round exceeding 100 million yuan, led by October Capital, with follow-up investments from Dongping Capital and Hefei Innovation Investment. In July 2024, Huazhi Energy completed a Pre-A+ financing round exclusively funded by Fenghe Capital, and within less than six months, it also secured several million yuan in Series A financing from Chaowei Group. The funds will be used to enhance technological innovation, product iteration, overseas market expansion, and capacity expansion.
Shengyun Energy was established in April 2014, focusing on research and development of new energy storage technologies and products. The company is an integrated service provider of energy storage equipment, system integration, and energy storage services. By collaborating closely with upstream and downstream partners, Shengyun Energy provides comprehensive solutions for the safe and efficient development, design, construction, and operation of energy storage power stations. The company is focused on developing a variety of energy storage inverters to meet the growing and diverse needs of both grid-side and user-side applications. Through flexible design and optimized control systems, Shengyun Energy aims to deliver more efficient and stable energy storage support, providing reliable guarantees for energy storage and dispatch in various scenarios, thereby assisting users in enhancing energy efficiency and supporting clean energy goals. In November 2024, Shengyun Energy secured nearly 100 million yuan in Series A financing, with undisclosed investors. The funds will be allocated to building an energy storage equipment production facility, deepening research and development of PCS equipment, and developing multiple models for large-scale and commercial storage, thereby advancing the company’s strategic planning and technological upgrades in the energy storage sector.
In March 2025, China’s first hybrid grid-forming energy storage project successfully went online. On March 6, the National Energy Group’s Ningdong Photovoltaic Base’s “Lithium Battery + Super Capacitor” hybrid energy storage key technology research and demonstration project achieved successful grid connection. This project is the country’s first hybrid grid-forming energy storage project, a major technological initiative by the National Energy Group in 2023, developed collaboratively with the New Energy Institute and Ningxia Power. In February 2025, Tesla’s Shanghai energy storage super factory officially commenced production, marking the rollout of the first large-scale commercial electrochemical energy storage system, Megapack. The launch event took place on February 11 at Tesla’s Shanghai facility, signifying a new phase for Tesla’s operations in the Chinese market. In January 2025, the State Grid Xinjiang Electric Power Research Institute released the nation’s first set of group standards for grid-forming energy storage systems, filling a significant industry gap. Recently, the technical team from the research institute embarked on a journey from Urumqi, Xinjiang, to Lhasa, Tibet, to conduct testing and support for grid-forming energy storage power stations, guided by the implementation plans stipulated in the “Technical Specifications for Grid-Forming Energy Storage Systems” and “Testing Specifications for Grid-Forming Energy Storage Systems.” In December 2024, Envision Energy’s liquid-cooled energy storage inverter with the highest power in the world commenced mass production in Jiangyin. This model is the world’s largest single-unit power energy storage inverter, compatible with standard 20-foot 5MWh + DC side solutions, featuring high reliability, strong protection, and high power density, with optional next-generation system-level grid-forming technology called GenGrid, which has passed all-scenario performance tests by the China Electric Power Research Institute, achieving internationally leading performance. In April 2024, Huawei launched the world’s first wind-liquid intelligent cooling commercial energy storage product, introducing significant breakthroughs in safety, thermal management, and power supply architectures.
