China Galaxy Securities Co., Ltd. forecasts that the energy storage sector will navigate increasingly competitive landscape dynamics, with large-scale storage profitability expected to stabilize and recover in the second half of this year, while residential and commercial storage segments maintain high margins.
The global energy storage shipment concentration ratio for the top 10 companies stood at 57.7% in the first half of 2026, down approximately 2 percentage points from 2025 figures. As the industry enters a lifecycle-based competition phase, requirements for large-scale storage system cost, efficiency, and stability are rising simultaneously. Key competitive hotspots for the latter half of this year include large-capacity cells, grid-forming storage systems, and long-duration storage technologies.
Residential storage exhibits clear consumer goods characteristics, with China Galaxy Securities Co., Ltd. favoring manufacturers possessing brand and channel advantages that are expected to gain market share. On the profitability front, if lithium carbonate prices decline in the second half of the year, large-scale storage manufacturers could gradually improve their earnings through optimized regional shipment structures and cost reduction via larger cells. Residential and commercial storage, benefiting from sequential shipment growth trends and smooth price transmission, are likely to maintain high profitability levels.
Global market enters diversified growth phase with strong medium-to-long-term demand
The functional positioning of large-scale storage is gradually transitioning from a supporting facility for renewable energy to a key flexible resource balancing multiple values including peak shaving, frequency regulation, capacity support, standby backup, and power trading, thereby deepening its role within the power system.
For residential and commercial storage, heightened geopolitical risks are driving stronger energy security demands across countries, while persistent power shortage issues in Asia, Africa, and Latin America create resilient demand fundamentals. The economic viability of residential and commercial storage is becoming increasingly apparent. China Galaxy Securities Co., Ltd. believes global energy storage demand will maintain robust growth over the next 1-2 years, with 2026 and 2027 installations projected to reach 480 GWh and 630 GWh respectively, representing year-over-year growth of approximately 50% and 30%.
Large-scale storage outlook for second half of 2026
Large-scale storage projects are entering a concentrated delivery period, with demand volume accelerating. Domestically, China installed 21.64 GW/58.2 GWh in the first half of 2026, up 15% year-over-year, while procurement and bidding volumes reached 96.5 GW/273.7 GWh, representing a 60% increase. With lithium carbonate prices expected to decline in the second half and capacity pricing policies continuing to take effect, high bidding volumes are expected to support concentrated domestic large-scale storage installations. The bank forecasts China's 2026 installations at 250 GWh, up 30% year-over-year.
In the United States, traditional large-scale storage projects have ample reserves, while AI data center energy storage co-location opens up medium-to-long-term growth space. The bank expects 2026 large-scale storage installations of 70 GWh in the US.
In Europe, the contradiction between high renewable energy penetration and aging grid infrastructure is intensifying, with frequent curtailment of wind and solar power and negative electricity price events. Under supportive policies, storage project development in countries such as the UK and Italy is expected to accelerate further.
Emerging markets including the Middle East, Latin America, Australia, and Southeast Asia are expected to contribute significantly more incremental demand as large-scale renewable energy projects come online, grid stability requirements increase, and storage revenue streams diversify. China Galaxy Securities Co., Ltd. forecasts 2026 global large-scale storage installations of 400-420 GWh, representing approximately 50% year-over-year growth.
Residential and commercial storage outlook for second half of 2026
High momentum in residential and commercial storage is spreading globally, with multiple regions showing strong performance. Since July, Brent crude oil prices have been rising continuously, while extreme high temperatures have significantly increased electricity demand. Anticipated electricity price increases are expected to strengthen the economic viability of residential and commercial storage.
The bank sees demand blooming across multiple markets, with commercial storage likely to achieve higher growth rates. 2026 residential and commercial storage installations are projected to reach 34 GWh and 29 GWh respectively, representing year-over-year growth of 28% and 63%.
Investment recommendations
For the large-scale storage segment, recommended companies include Sungrow Power Supply Co., Ltd., Haibo Sichuang, Canadian Solar Inc., SNE Co., Ltd., and Chint Power Systems Co., Ltd.. For the residential storage segment, recommended companies include Deye Industry Co., Ltd., Sigenergy New Energy, Jinlang Technology Co., Ltd., Airo Energy, Homey Co., Ltd., and Yuneng Technology Co., Ltd..
Risk warnings
Risks include trade policy fluctuations, intensifying industry competition, raw material and core component price volatility, and fluctuations in energy storage demand.
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