China solar and energy storage markets transition to market-based growth

China's solar energy and energy storage sectors are undergoing a strategic transition from capacity-led expansion toward market-based integration and grid flexibility. While China maintains global leadership in solar manufacturing, future growth is increasingly shaped by electricity-market reforms, grid investment, and the development of commercially bankable value within the power system.

Recent semi-annual reports from major energy storage firms, including Deye, Sineng Electric, Narada Power, and Zhuhai CosMX, reveal divergent performance trajectories. Deye reported a significant milestone in the first half of 2026, with operating revenue surpassing RMB 10 billion for the first time, marking a 92.23% year-on-year increase. This growth was driven primarily by rising market demand and the rapid expansion of its energy storage battery pack business, which saw revenue jump 244.12% year-on-year. Inverters and battery packs combined accounted for over 90% of Deye's total revenue during this period.