The four segmented markets mainly include: source grid side energy storage, industrial and commercial energy storage, household energy storage, and portable energy storage.

   In fact, the photovoltaic industry has long been divided into markets such as source grid side photovoltaics (centralized photovoltaics), industrial and commercial distributed photovoltaics, and household photovoltaics, presenting different market patterns and investment logics.

   Source grid side energy storage

  The investors of energy storage on the source grid side are mainly the existing construction and operation enterprises on the source grid side, such as power grid companies (such as State Grid's State Grid Xinyuan, which mainly engages in investment and operation of grid side pumped storage power stations), and traditional large-scale power generation enterprises (Big Five and Small Four). Source network side energy storage is a highly buyer's market, where there is a relationship between a few investors and a large number of sellers. Investors have extremely high bargaining power, and the profit level of sellers is always suppressed.

   From the perspective of downstream buyers, the only monetization channel for energy storage on the source grid side is through the provincial auxiliary service market, where energy storage service products are sold to grid dispatch, which is almost a single buyer market.

   From the perspective of alternative products, source grid side energy storage is a provider in the "centralized auxiliary service market", providing related services including backup, frequency regulation, and peak shaving. However, there are many competitors who can provide similar services, especially market-oriented flexible thermal power units, market-oriented hydropower units, gas turbines, and even large-scale industrial and commercial energy storage, large-scale adjustable loads, which may also participate in some form of virtual power plants.

   Industrial and commercial energy storage

  The industrial and commercial energy storage market is expected to reach a scale of 6 trillion yuan, with participation from industrial and commercial owners, investors, energy storage integrators, and EPC parties, forming a four party collaborative contract energy management model (EMC).

  The main profit model is to reduce electricity costs through arbitrage of peak valley price differences, as well as participate in trading or demand response events of virtual power plant products. In June 2023, the maximum peak valley price difference in 19 regions of China exceeded 0.7 yuan/kwh, which also means that the economic viability of industrial and commercial energy storage is gradually increasing.

  The market capacity of industrial and commercial energy storage is the largest, far greater than that of the power generation side and the grid side, and there are definite cooperation and operation modes. The annual yield of distributed energy storage power stations with good conditions can reach 8% -15%.

  Household energy storage

  Household energy storage has become an important part of the energy storage industry chain and one of the golden tracks for the future. Household energy storage systems are usually combined with renewable energy devices such as solar photovoltaic panels to provide clean and reliable power supply for households.

  The market demand for household energy storage is still in a high state of prosperity, but the main market is still distributed overseas. According to the Energy Storage Application Branch of the China Chemical and Physical Power    Industry Association, it is expected that the penetration rate of household energy storage will reach 28% by 2025, and the penetration rate of household energy storage in Europe is expected to increase from 18% in 2022 to 56% by 2025.

   The development of domestic household energy storage market is actually limited by power grid enterprises. In China, due to the high social responsibility of power grid enterprises, the overall reliability level of residential power supply services has long been leading the world, which to some extent hinders the development prospects of household energy storage.

   Moreover, from an economic perspective in China, the investment return rate of household energy storage is relatively low.

  Portable energy storage

   Portable energy storage products are power systems with built-in high-energy density batteries that can provide stable AC/DC voltage output. They can be used in outdoor travel, emergency preparedness, and other scenarios. Compared with traditional small fuel generators, portable energy storage products have the advantages of safety, portability, environmental friendliness, noiselessness, and easy operation. They can widely replace small fuel generators and provide a better user experience.

   The wave of portable energy storage market has begun to surge. Under the huge market potential and competitive pressure, which players can ultimately stand firm and gain something? We'll wait and see!

   There is currently no consensus on the product form and business model of another segmented market.

   Peak summary, four markets, each with its own characteristics

   Due to the differences in the elements, marketization level, policies, and customer demands of the Five Forces Model, energy storage products will gradually differentiate into four segmented markets: source network side, industrial and commercial, household, and portable. There may be differences in technology, products, business models, and commercial models, and the closer they are to the operational end, the greater the differences.

   The development space for industrial and commercial energy storage is enormous. Driven by the factors of electricity marketization, combined with digital technology innovation and operational model innovation, it will present a situation of blue ocean competition and rapid product iteration. China will be the market with the greatest opportunities.