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Sudden change in the energy storage market: orders go out, shares plunge over 70%

Summary:

As of mid-2023, energy storage battery capacity utilization rate is less than half, including household energy storage, from 85% in 2022, fell to less than 30%. Since the beginning of this year, the leading company PYlon  Tech stock price plummeted more than 70%!

The development of new energy has brought fire to the energy storage market, and its hot degree can be seen from the new registered enterprises.


In the first half of this year, the country registered nearly 40,000 new energy storage-related enterprises, more than last year's total of 36,000 new registrations.


The fire of the energy storage market can also be seen from a variety of international and domestic exhibitions.


June's Munich Solar Show, the British Solar Show in mid-October, as well as the 2023 International Conference and Exhibition on Energy Storage Technology and Equipment and Applications (hereinafter referred to as "Shanghai Energy Storage Exhibition") in Shanghai, large and small energy storage vendors were inundated, and the popularity of the show was overwhelming.


But behind the hot, hidden deep concern, one is the beginning of a serious overcapacity, the second is the price rolled out of the new low, the third is the orders fell off a cliff.




Echoing this, the share prices of some energy storage companies began to plummet.


This shift, which occurred in a very short period of time. In the first half of the year, orders are still growing rapidly, to the second half of the year, suddenly began to decline. Orders in the once-hot overseas market also suddenly disappeared.


January-June 2023, the national energy storage new installed capacity of about 8.63 million kilowatts/17.72 million kilowatt-hours, equivalent to the sum of the cumulative installed capacity in previous years, the major energy storage companies earned a lot of money.


But a few months past, the wind has shifted, people in the energy storage exhibition talk about the topic of energy storage overcapacity and orders are scarce.


GCL Group Chairman Zhu Gongshan said at the Shanghai Energy Storage Exhibition, as of mid-2023, China's lithium-ion power (energy storage) battery industry, the actual capacity of nearly 1900GWh, the industry's nominal capacity utilization rate of less than half, and is still declining.


Poor capacity utilization is the most intuitive manifestation of overcapacity, the most serious is the household energy storage capacity utilization rate, from 85% in 2022, fell to less than 30% now.


As a leading enterprise in the field of household energy storage batteries, Pai Neng Technology has become a storage stock that has risen too much and fallen too hard. According to the statistics of the Globe, the overall capacity utilization rate of Pai Energy Technology in the third quarter of this year is only 10%, which is the lowest quarterly capacity utilization rate of Pai Energy Technology in five years.


Generally speaking, the household energy storage market is the market with the highest gross profit margin and the fastest growth rate in the energy storage segment. But from the performance of this year's Pai energy science and technology, the current stage of its gross profit margin decline faster than any previous stage.

For a time, "energy storage industry early into the winter" this statement fermentation, the industry on the development of energy storage industry doubts and pessimism is constantly amplified. Is it true that in May this year, Zheng Hanbo, general manager of energy storage division of Vision Energy, said that by next year, 80% of energy storage system integrators will fall?

Why just half a year, energy storage, especially household energy storage will be transformed from "oversupply" to "overcapacity"? What are the reasons behind? How can enterprises win in the fierce competition?

No more orders for overseas household storage?


For household energy storage, the most important market is overseas. Overseas household storage is known as the most fertile piece of "swan meat" in the field of energy storage.

Once household energy storage lithium battery enterprise shipments ranked first ningde times, according to its 2023 half-yearly report shows that the overseas battery business operating income increased by 195.15% over the same period last year. BYD, Pai Energy Technology, ATL, Ruipu and other domestic household storage battery head enterprises, more than 90% of the products are also exported overseas.

The aforementioned Pai energy technology, its stock soared nearly four times in the last six months, is the global household energy storage system market champion last year, the situation seems to be a good thing.

However, this year, Pai Neng Technology shares plummeted more than 70%, and in the third quarter revenue fell 71% year-on-year, profit fell 110.05% year-on-year, almost overnight back to the liberation of the former.

From the point of view of Pai Energy Technology's shipments, the first three quarters of this year, household energy storage products shipped 1.69GWh, but in the second and third quarters, shipments were only 390MWh, 300MWh respectively.

Not only Pai Energy Technology, the performance of enterprises overseas household energy storage enterprises also have similar characteristics.

Starting from the second quarter of 2023, the year-on-year growth rate of enterprises such as DEI, Goodway, Crestec, and Womai shares fell rapidly, and the highest year-on-year growth rate of DEI fell back to 83.3%.

So what's wrong with the swan's meat of overseas household storage? It boils down to demand in overseas markets, which is in trouble.11.22 1.jpg


According to S&P Global Commodity Insights, the second quarter of 2023 was the first quarter in which global household storage shipments saw a 2% year-over-year decline. In Europe, shipments of household storage systems slowed significantly, with Belgium and Spain down 60% year-over-year, and Italy down over 40%.

The reason behind this has to do with the European energy crisis.

In 2022, the Russian-Ukrainian war superimposed on large-scale power outages overseas made Europe's energy costs and electricity prices climb, and the market demand for PV+energy storage spiked, with demand outstripping supply, and European distributors stocked up heavily.

This year, the energy crisis in European countries has been alleviated. In the United Kingdom, for example, in the first half of the year, the price of natural gas plummeted, down 66% from the previous year. As natural gas prices began to return to normal, the corresponding PV + storage of energy supply lost its appeal.

Demand is down and inventories are still plentiful. For example, Spain's Betasolar, the largest energy storage distributor in the region, stocked up last year directly for this year's volume.

According to EESA statistics, as of the second quarter of 2023, the European household energy storage system inventory amounted to about 6.4GWh, about 8 months of installed capacity in the European household storage market, the inventory level is still at a high level, and it is expected that the European household storage inventory clearing will continue until the end of 2023.