The year 2022 witnessed a surge in competitiveness within the global Battery Energy Storage Systems (BESS) integrator market, as the top five integrators collectively accounted for 62% of overall BESS shipments in megawatt-hours (MWh), according to an analysis by Wood Mackenzie.
Sungrow emerged as the leader, commanding a 16% share of the global market based on shipment rankings, closely trailed by Fluence and Tesla, each with a 14% share. Huawei and BYD claimed 9% each, rounding out the top five.
Kevin Shang, a senior research analyst at Wood Mackenzie, noted, “As significant policy developments continue to drive the battery energy storage systems market, the BESS integrator industry is experiencing growing competitiveness. While existing integrators are striving to expand their market share, the burgeoning energy storage sector has also attracted new entrants.”
Shang further explained, “Leading BESS integrators typically share the advantage of a global presence, enabling them to tap into a broader customer base and unlock additional revenue streams.”
However, Shang also pointed out a significant challenge facing the industry. He stated, “Although global battery supply has somewhat normalized in 2023 after experiencing tightness in the preceding year, the limited availability of transformers has emerged as a new bottleneck in the energy storage supply chain. The industry is grappling with transformer shortages and price spikes, with lead times exceeding one year for transformers of all sizes. This directly impacts system integrators since transformers are essential for grid connections.”
In North America, the BESS integrator market displays concentration, with the top five players securing an impressive 81% of the regional market share in 2022. Tesla led the pack with a 25% market share, followed by Fluence at 22%. Chinese company Sungrow held the third position, boasting a 13% market share in North America, attributed to its cost competitiveness and advanced liquid-cooling products.
Shang stated, “Government initiatives such as the Inflation Reduction Act and state-led clean energy policies are poised to fuel growth in the storage market. We anticipate that the US BESS integrator market will become increasingly competitive in the years ahead. Companies will need robust business strategies to thrive in this highly competitive landscape.”
In the Asia Pacific region, China asserted its dominance, capturing an impressive 86% market share in the BESS integrator market in 2022.
Shang concluded by highlighting the intensifying competition within China's integrator market, influenced by pressures from both upstream and downstream supply chain participants. He emphasized the growing importance of manufacturing capacity for key components, including cells, power conversion systems, battery management systems, and energy management systems.
“The price competition among system integrators in China has already begun, with more players willing to sacrifice profits for market share. This has the potential to erode industry profitability,” Shang added. “However, we anticipate that strategies with minimal profit margins may not be sustainable in the long term. As market competition intensifies, companies with low profitability and unclear competitive advantages may face challenges in surviving.”