Why Storage Has Not Yet Rescued Chinese Solar Manufacturers
Energy storage is becoming a genuine second business for China's leading photovoltaic manufacturers. However, it remains too small and too demanding to offset the losses generated by their much larger, overbuilt solar manufacturing operations.
In the first half of 2026, five leading Chinese photovoltaic groups reported combined losses attributable to shareholders of RMB 14.81 billion. Excluding Tongwei, whose interim report does not disclose a comparably material storage products business, the four players expanding into storage still lost RMB 9.69 billion. These totals are calculated from the listed companies’ interim filings and describe group-level results, rather than losses attributable solely to PV manufacturing. (Source 1, 2, 3, 4, 5)
A much larger PV base remains under pressure
China’s photovoltaic downturn reflects pressure on prices, capacity utilisation, and fixed costs, despite the continuing need for solar deployment. In 2024, China produced 588 GW of modules, up 13.5%, while module prices fell by 29.7%. Polysilicon output exceeded 1.82 million tonnes, up 23.6%, while prices fell by 39.5%, according to the Ministry of Industry and Information Technology. Growing output alongside falling prices put manufacturers under financial pressure. (Source 6)
The domestic demand comparison then worsened. China added approximately 212 GW of PV capacity in H1 2025, amid a rush ahead of electricity-pricing reforms. H1 2026 additions fell to 71.77 GW, about 66% lower. This partly reflects the unusually high comparison base, rather than establishing a permanent collapse in demand. Jinko’s H1 2026 report, citing the China Photovoltaic Industry Association, nevertheless describes an industry-chain supply-to-demand ratio above 2:1. (Source 3, 7, 8)
Underutilised factories still incur depreciation, labour, and financing costs. Inventory can require write-downs, while technological change can make older production lines less competitive. Overseas trade barriers add further pressure. These factors help explain the challenge, although investment, currency, and other items also influence group results.
A new storage business can help, but it cannot make the costs associated with an underutilised PV manufacturing base disappear.
Fast storage growth is producing profit, but not yet enough
Trina offers the clearest example. Its storage shipments exceeded 5 GWh in H1 2026, up 188%. Its product-category disclosure shows storage revenue of RMB 2.47 billion and gross profit of approximately RMB 519 million, a 21% gross margin. PV products generated RMB 17.79 billion of revenue against RMB 17.57 billion of cost of sales: approximately RMB 226 million of gross profit and a margin of 1.3%, before operating expenses and other below-gross-profit items. Storage therefore generated more than twice the gross profit of the much larger PV products category. (Source 5)
However, storage was still only about 7.7% of group revenue. Trina also disclosed approximately RMB 135 million of storage segment net profit. This segment figure uses a slightly different reporting scope from the product-category figures above, so it is not a direct net-margin measure for that product category. At group level, Trina reported an attributable loss of RMB 270 million, or RMB 2.89 billion excluding non-recurring items. Approximately RMB 2.62 billion of non-recurring gains explain most of the difference. Storage is making a positive contribution, but its scale remains limited. (Source 5)
Other manufacturers are at different stages. LONGi obtained control of storage integrator PotisEdge on 7 January 2026. It reported more than 3 GWh of signed storage orders during H1; from acquisition to June-end, the subsidiary contributed approximately RMB 498 million of revenue and recorded a net loss of RMB 127 million. Those are subsidiary figures, rather than attributable group results. (Source 2)
Jinko delivered 3.1 GWh of storage systems in H1 2026, but its interim report did not separately identify storage revenue or earnings. JA Solar’s interim report likewise did not provide separate storage earnings. These disclosures show commercial progress, while limiting how precisely investors can assess the contribution to group profitability. (Source 3, 4)
It is worth noting that a signed gigawatt-hour order is not a shipment. A shipment is not necessarily recognised revenue. Likewise, revenue is not gross profit, and gross profit is not cash generation or net earnings.
Storage faces its own price and demand pressures
The storage market is also exposed to intense competition. The China Energy Storage Alliance (CNESA) reported an average winning bid of RMB 553.94/kWh for two-hour lithium iron phosphate systems in China in 2025. Two-hour centralised or framework procurements averaged RMB 464.45/kWh, with a minimum of RMB 416/kWh. The lower RMB 370/kWh minimum applied to four-hour procurements. CNESA described framework procurement prices as approaching the cost line; an indication of the commercial pressure on suppliers. (Source 9)
For H1 2026, CNESA reported an average two-hour system winning price of RMB 599.3/kWh. It also reported that newly commissioned new-type storage capacity in China fell 18% year on year when measured in power terms, while the number of commissioned projects declined 51%. These figures concern new additions, not a contraction in the cumulative installed storage fleet. (Source 10)
The commercial model is changing too. Document 136 from the National Development and Reform Commission (NDRC) and National Energy Administration (NEA), dated 27 January 2025 and published on 9 February, prohibits making storage configuration a precondition for approval, grid connection or electricity export by new wind and solar projects. It does not ban storage. It can strengthen the focus on economic value, while removing a source of policy-driven demand. (Source 11)
Projects consequently need credible revenue models, drawing on mechanisms such as capacity payments, energy-price arbitrage, and ancillary services where available. CNESA reports that narrowing peak-to-off-peak price spreads and higher system charges have reduced energy-market returns in some regions. Local market rules and project economics therefore matter as much as the equipment price. (Source 10)
Solar sales channels help but storage needs additional capabilities
Solar manufacturers have useful advantages: established utility and developer relationships, overseas sales channels, procurement scale and recognised brands. These can support combined solar-plus-storage proposals and reduce the cost of winning customers.
However, the engineering and service requirements are different. A utility-scale battery system integrates cells, battery management systems, power conversion equipment, energy management software, thermal controls and fire safety. It must meet local grid codes, be commissioned correctly and perform over many years. Overseas expansion also requires certification, engineering, maintenance and warranty capabilities. Solar sales channels provide a head start, but they do not automatically confer these capabilities.
Acquisitions can accelerate entry, but expanding storage can still require substantial upfront investment in product development, delivery, and service. That investment competes for capital while the parent’s traditional business is under pressure. The pace and financial burden will vary by company.
Sungrow shows the potential and the competitive hurdle
Sungrow’s H1 2026 storage revenue was RMB 15.46 billion, more than six times Trina’s, and represented 50% of group revenue. Storage achieved a gross margin of 32.43%, while Sungrow reported attributable group net profit of RMB 5.26 billion. (Source 12)
Sungrow is a power-electronics and inverter specialist, so it is not a like-for-like comparison with PV module manufacturers. Its capabilities in power conversion and grid control are closely adjacent to storage. Even so, storage revenue fell 13.18% year on year and its gross margin narrowed by 7.49 percentage points. Established suppliers can face weaker financial performance too; the figures alone do not isolate the effects of pricing, project timing or sales mix. (Source 12)
A strategic bridge rather than an immediate bailout
Storage is adding revenue and opening opportunities to sell more complete energy solutions. Trina’s positive storage profitability demonstrates that diversification can create value. But the selected manufacturers’ results show that growing storage businesses have not yet offset wider group losses. The test is whether rising storage sales translate into sustained earnings and cash generation.
Investors should look for clearly disclosed storage operating profit and cash flow, margins that hold after warranty and localisation costs, and a larger contribution to group gross profit. Capacity rationalisation, factory utilisation, and pricing discipline in PV remain important alongside the development of storage.
Whether storage becomes a second profit engine will depend on its scale, margins, and cash generation, alongside the pace of adjustment in the PV business. The H1 2026 results support a measured conclusion: storage can help rebuild profitability, but it is not a quick fix.
Sources
1. Tongwei: H1 2026 interim report
https://vip.stock.finance.sina.com.cn/corp/view/vCB_AllBulletinDetail.php? id=12545102&stockid=600438
2. LONGi: H1 2026 interim report
3. Jinko Solar: H1 2026 interim report
4. JA Solar: H1 2026 interim report
5. Trina Solar: H1 2026 interim report
6. MIIT: China’s photovoltaic manufacturing industry in 2024, 27 February 2025
7. NEA: H1 2025 renewable energy statistics, 31 July 2025
8. NEA: H1 2026 renewable energy statistics, 30 July 2026
9. CNESA: 2025 storage winning-bid price review, 8 January 2026
10. CNESA: H1 2026 storage market review, 27 August 2026
11. NDRC and NEA: Document 136, section IV(9), published 9 February 2025
12. Sungrow: H1 2026 interim report
