How is Sungrow Power Seeking Optimal Solutions for Commercial and Industrial Energy Storage Development Amidst Major Market Changes?
After consistently ranking first in the Chinese energy storage system integration market for eight consecutive years, Sungrow Power is now leveraging its advantages in large-scale energy storage to penetrate the commercial and industrial storage sector. In 2023, the long-anticipated breakthrough of commercial and industrial energy storage was finally realized, with domestic shipments surpassing 3 GWh, marking it as the inaugural year for commercial and industrial energy storage in China. Furthermore, from late 2023 to early 2024, Sungrow Power’s advertisements for commercial and industrial energy storage solutions have appeared on high-speed trains in Shanghai and Guangzhou, effectively reaching key customer groups in the vibrant Yangtze River Delta and Guangdong-Hong Kong-Macau Greater Bay Area.
Over the past year, Sungrow Power has achieved remarkable success in the commercial and industrial energy storage space. According to statistics from Gaogong Industry Research, in 2024, Sungrow Power’s commercial and industrial energy storage shipments topped the charts for the first time. However, this sector is still highly competitive, with numerous companies vying for market share. Currently, there are hundreds of businesses engaged in commercial and industrial energy storage, leading to a fragmented market where the difference in performance between the top and tenth-ranked companies is minimal. Amidst a fierce price war and a nationwide fire safety overhaul, the rapidly growing commercial and industrial energy storage sector has entered a period of significant restructuring.
As 2025 approaches, the introduction of new regulations in Document No. 136 will reshape the development logic of energy storage, including commercial and industrial sectors. On one hand, ongoing electricity reforms are being implemented; on the other hand, significant breakthroughs in technologies such as AI are occurring. These changes are profoundly affecting the development trajectory of the energy storage industry. What does the future market direction for commercial and industrial energy storage look like, and what opportunities and challenges lie ahead? On April 11, under the guidance of Dr. Kou Nannan from Bloomberg New Energy Finance, a deep dialogue was held featuring Dr. Cao Wei, General Manager of Sungrow Power’s commercial and industrial energy storage product line; Dr. Song Jing, an energy project researcher at WRI’s Beijing Sustainable Transformation Center; and Dr. Zhou Wenwen, General Manager of Sungrow Huican, focusing on the theme, “Deeply Cultivating Scenarios x Smart Empowerment: Optimizing Solutions for Commercial and Industrial Energy Storage Development.”
The Era of Scenario-Driven Development is Here
Unlike large-scale energy storage, the commercial and industrial sector presents a distinct market characterized by a vast and dispersed customer base. Application scenarios range from the scenic waterways of Jiangnan to the oil fields of the Gobi Desert, urban centers, and rural areas. In theory, all electricity-consuming enterprises have the potential to connect with energy storage solutions. According to application scenario statistics, over 90% of newly installed commercial and industrial energy storage systems in China from January to September 2024 were directly integrated by commercial users. New application scenarios accounted for approximately 5%, while solar-storage-charging scenarios comprised about 2%. The boundaries of commercial and industrial energy storage applications are dynamically expanding as the cost per kilowatt-hour decreases and the electricity market evolves. The integration of distributed photovoltaics with energy storage can enhance overall system operational efficiency, leading to improved investment returns.
Dr. Cao Wei from Sungrow Power stated that energy storage is transitioning from being “policy-driven” to “value-driven,” where innovative scenario-based approaches are crucial. All customer value must be realized within these scenarios, which are inherently complex. For instance, commercial buildings, due to their high occupancy, demand rigorous safety standards for energy storage systems. Charging stations rely on energy storage to balance grid loads and meet the charging demands of numerous electric vehicles during peak times, thus enhancing charging efficiency. Data centers require exceptional power stability, as any disruptions could lead to data loss or equipment damage. Energy storage systems in industrial microgrids must effectively manage distributed generation, emergency power supply, and ancillary services such as peak shaving and frequency regulation.
To address customer value and scenario needs, Sungrow Power has developed a range of scenario-based product solutions. In March of this year, the company launched the 255CS series, which supports both “AC coupling” and “DC coupling” modes for solar-storage integration. For existing photovoltaic installations, it allows direct connection with current photovoltaic inverters; for new installations, it pairs with Sungrow’s hybrid photovoltaic inverters.
In China, commercial and industrial electricity consumption is significant, with high and volatile electricity prices. The energy consumption in the secondary and tertiary industries has been on the rise over the past five years. As the country implements carbon peaking plans in key industrial sectors while attempting to mitigate the impact of carbon border adjustment mechanisms from Europe and the U.S., there is increasing pressure for the second and third industries to adopt energy-saving and green energy practices. In response, Sungrow Power has introduced products tailored for large industrial settings. One such product, a 420 kW/835 kWh commercial energy storage solution, emphasizes “multiple discharges, stable power supply, and simplified maintenance,” aiding high-energy-consuming enterprises in reducing costs, enhancing efficiency, and transitioning to low-carbon operations.
In this new era, commercial and industrial energy storage applications are moving deeper. A one-size-fits-all product is becoming increasingly recognized as insufficient. Customizing solutions for different scenarios has become a critical challenge for enterprises. To date, Sungrow Power has leveraged its 28 years of experience in power electronics to develop a comprehensive “product matrix” for commercial and industrial energy storage. Solutions include the 100 kWh, 125 kW/257 kWh, 420 kW/835 kWh, and 5 MWh series, covering voltage levels of 400V, 10/20KV, and 35KV, fully meeting commercial and industrial storage requirements.
How AI Empowers Commercial and Industrial Energy Storage
After nearly two years of rapid development, commercial and industrial energy storage system solutions are evolving from mere hardware integration to a focus on sophisticated software algorithms and operational refinement. The future of AI lies in integrating with new energy and energy storage, which is the next step for energy storage solutions. Commercial and industrial energy storage must leverage big data and AI algorithms to enhance system intelligence, which is one of Sungrow Power’s core strengths. Currently, Sungrow Power holds the world’s leading position in cumulative energy storage installations, and its extensive data accumulation and engineering practices lay a solid foundation for future AI algorithm training.
Sungrow Power believes that AI technology will reshape the energy storage industry value chain along three dimensions: precision in energy management, real-time scheduling decisions, and optimization of electricity trading strategies. For example, in a gigawatt-hour scale energy storage station containing millions of battery cells, the varying states of these cells over time pose significant management challenges. Traditional techniques struggle to provide precise oversight and alerts. “Sungrow Power integrates data from multiple components of the energy storage system; using AI-based big data analytics allows for precise management of vast numbers of battery cells, with early thermal runaway alerts achieving over 99% accuracy, enabling thousands of battery cells to operate as if they were a single cell,” Dr. Cao Wei explained.
AI applications in grid configuration are also expanding. Sungrow Power utilizes its globally leading simulation and modeling capabilities to simulate the operational status of grid systems under various application scenarios during steady-state and transient processes. AI-enhanced grid configuration algorithms can tailor strategies for specific networks, ensuring reliable grid configurations for gigawatt-hour scale stations. In 2024, Sungrow Power is set to introduce the concept of commercial and industrial energy storage grid configuration within the industry, enabling energy storage to adapt better to the grid and, to some extent, improve grid conditions in complex environments. Sungrow Power’s commercial and industrial energy storage products also incorporate unique technologies from the large-scale storage sector, such as AC storage, battery lifespan pre-diagnosis, and DC arc detection, while also integrating stem cell grid technology. This allows user-side energy storage to work in conjunction with the electricity environment of the facility, providing grid configuration and black start functionality, which not only improves voltage frequency but also addresses harmonic issues.
Sungrow Power believes that the dispatch model for commercial and industrial energy storage is undergoing a profound transformation, shifting from “one-way control to two-way interaction” and from “following the grid to supporting the grid.” The ability to actively configure the grid will become a “market entry certificate” and a “premium moat” for commercial and industrial energy storage, shifting the industry focus from price competition to value competition. The essence of energy storage lies in trading, where the core of electricity trading is to “capture certain returns amidst uncertainty.” Some experts argue that as the complexity of the electricity market rises exponentially, AI will transition from being an “optional tool” to a “survival necessity.” Within three years, companies lacking AI trading capabilities may be excluded from the mainstream market. In the electricity spot market, the fluctuations in new energy output and sudden load changes require millisecond responses, while manual strategy adjustments can take minutes. Grid dispatch must manage thousands of variables in real-time, including weather, electricity prices, load, and equipment status, with human rules covering at most 20% of scenarios. Sungrow Power has developed the Power Bidder system to assist decision-making in electricity spot trading, utilizing extensive station information processing and various AI algorithms for intelligent scheduling decisions, achieving an average annual electricity price prediction accuracy of around 90%.
AI is evolving into the “intelligent brain” of energy storage systems, with its value transitioning from “efficiency enhancement tools” to “core engines for restructuring business models.” Through a three-pronged strategy of “vertically integrating AI technology chains, horizontally connecting energy data ecosystems, and deeply binding electricity market rules,” Sungrow Power aims to continue leading the intelligent energy storage revolution.
Long-Term Strategies to Navigate Market Cycles
With the explosive growth of new energy generation, commercial and industrial energy storage has reached a critical point. However, this does not mean a clear path ahead; rather, it heralds fierce competition and brutal price wars. Currently, nearly all energy storage companies are entering the commercial and industrial energy storage space, with participants peaking at over 600. Coupled with the steep decline in lithium battery costs, competition among integrated systems has intensified, raising the bar for technological iteration, cost control, and business model innovation for system integrators. Amidst the influx of competitors and increasing rivalry, some companies have resorted to bidding below cost to secure contracts, leading to hidden cost reductions that compromise key performance indicators.
As a system integrator bridging different sectors, maintaining profitability is crucial for the sustainable and healthy development of the industry, ensuring that energy storage investors and asset operators can operate sustainably. Industry insiders have outlined the BOM costs for commercial and industrial energy storage, with the integrated cost of a 125 kW/261 kWh energy storage cabinet falling between 0.51 to 0.53 yuan per kWh. As a leading enterprise, Sungrow Power is calling for a shift away from price competition towards technological innovation and service quality. Dr. Cao Wei stated that commercial and industrial energy storage represents a financial asset for customers—an energy station’s lifecycle spans not just one or two years but over a decade. Many low-priced winning bids may fail to ensure safe and stable operation for such extended periods. The value of commercial and industrial energy storage is generated over its usage, including enhanced returns and reduced operational costs.
Currently, commercial and industrial energy storage models are primarily built around peak and valley price differences, while virtual power plants (VPP) represent the ultimate evolution of this sector. “Peak-valley arbitrage is merely superficial returns; ultimately, commercial and industrial energy storage must evolve into virtual power plants, aggregating participants to engage in electricity trading and balancing power loads. This also addresses users’ concerns about green energy consumption,” Dr. Cao Wei emphasized. Recently, two ministries jointly issued a directive stating that by 2030, the national virtual power plant adjustment capacity will reach 50 million kilowatts, establishing a clear roadmap for development across operational mechanisms, market participation, safety management, and technological innovation. This significant policy marks the transition of virtual power plants from pilot phases to large-scale, market-driven developments, clarifying the direction for all industry stakeholders.
The shift from simple peak-valley arbitrage to complex virtual power plants signifies an elevation in competition within the commercial and industrial energy storage sector, marking a crucial step towards a healthy and mature industry. Only those who adhere to long-term principles regarding technology, products, and markets will navigate through the challenges and embrace a remarkably bright future.
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