Sungrow Dominates Global BESS Market with 16% Market Share, Wood Mackenzie Report Reveals

The global Battery Energy Storage Systems (BESS) integrator market witnessed a surge in competition throughout 2022, with the top five system integrators commanding 62% of total BESS shipments (in MWh), as reported by industry analyst firm Wood Mackenzie. Sungrow led the pack, capturing 16% of the global market share, closely trailed by Fluence and Tesla, both with a 14% share. Huawei and BYD secured 9% each. The findings reflect the escalating rivalry within the industry, driven by significant policy developments and a growing energy storage market.

Insights from Wood Mackenzie Analyst:

Kevin Shang, a senior research analyst at Wood Mackenzie, commented on the competitive landscape: “As major policy developments propel the battery energy storage systems market, the BESS integrator industry is becoming increasingly competitive. While existing system integrators are striving to increase market share, the fast-growing energy storage market has also attracted many new entrants to this space.”

Shang highlighted that a common trait among leading BESS integrators is their global presence, enabling access to a larger customer base and the discovery of additional revenue streams. Many integrators are also focusing on enhancing the vertical integration of their supply chain.

Supply Chain Challenges:

Regarding the supply chain, Shang noted, “While global battery supply eased in 2023, after experiencing supply tightness the previous year, the limited supply of transformers has become the new bottleneck of the energy storage supply chain. The industry is struggling with short supply and price spikes of transformers, with a minimum lead time of more than one year for transformers of all sizes. This has a direct impact on system integrators as transformers are integral for grid connection.”

Regional Market Highlights:

North America: The North American BESS integrator market remains concentrated, with the top five players holding 81% of the region’s market share in 2022. Tesla led the region with a 25% market share, benefiting from its vertical integration, combining hardware, software, and added services to swiftly deliver improvements and new features to clients. Fluence followed closely with 22%, and Sungrow took third place with a 13% market share due to cost competitiveness and advanced liquid-cooling products.

Asia Pacific: China emerged as the leader in the Asia Pacific BESS integrator market, securing an 86% market share in 2022. Shang emphasized the intensifying competition in China’s integrator market, driven by supply chain pressures. To distinguish themselves, players have engaged in a price war. However, Wood Mackenzie predicts that aggressive pricing strategies with minimal margins may not be sustainable in the long run. Intensifying competition is likely to challenge companies with low profitability and unclear competitive advantages in the years ahead.

Closing Thoughts:

As competition in the global BESS integrator market escalates, companies are urged to adopt robust business strategies to thrive in this highly competitive landscape. The industry is poised for further growth, driven by policy changes, clean energy initiatives, and technological advancements.