What’s Driving the Reference Price of Energy Storage Systems to New Lows?
Why Is the Reference Price of Energy Storage Systems Dropping Faster Than a Rollercoaster?
If you’ve been tracking the energy storage market lately, you’ve probably noticed something wild: the reference price of energy storage systems (ESS) is plunging like a daredevil skydiver. In 2024 alone, we’ve seen lithium-ion battery storage bids hit 0.437元/Wh in China’s utility-scale projects[4], and even lower for specialized systems like liquid-cooled ESS (0.478元/Wh)[10]. But what’s fueling this race to the bottom? Let’s break it down.
Key Factors Shaping ESS Pricing
- Battery Chemistry Wars: The dominance of lithium iron phosphate (LFP) batteries, which accounted for 80% of new installations in 2024, has pushed costs down by 40% year-over-year[6].
- Supply Chain Overdrive: With battery-grade lithium carbonate prices crashing from 100,000元/ton to <75,500元/ton[4], manufacturers are swimming in raw material discounts.
- “Survival of the Fittest” Bidding: Recent tenders like China Huadian’s 5GWh project saw 73 vendors competing, resulting in bids as low as 0.495元/Wh[2].
Decoding the Numbers: 2024-2025 ESS Price Benchmarks
Let’s get granular with actual project data:
Utility-Scale Storage (Source: CESA 2024 Report[4])
- Average system price: 0.574元/Wh
- Lowest recorded bid: 0.437元/Wh (China Resources Power, Dec 2024)
- Top 5% premium projects: Up to 1.383元/Wh for grid-forming tech
Commercial & Industrial (C&I) Storage
While not as dramatic, C&I systems saw a 25% price drop:
- 2023 average: 1.4元/Wh (e.g., Sungrow’s PowerStack 200CS)[10]
- 2024 Q2 average: 0.752元/Wh[4]
- Bargain alert: Sodium-ion systems now entering at 1.03元/Wh[5]
When “Low-Cost” Meets “High-Stakes”: Industry Reactions
The price freefall isn’t all confetti and champagne. As one industry vet quipped: “We’re not just trimming fat anymore—we’re operating on bone marrow.” Here’s why:
- Profit margins for LFP systems have shrunk to 2-5%[6]
- Over 30% of ESS suppliers are operating at a loss to maintain market share[7]
- EPC costs aren’t keeping pace, creating a 0.69-1.763元/Wh spread between equipment and total project costs[3]
Case Study: The 0.47元/Wh Shockwave
When CNPC’s Jichai Power set a 0.478元/Wh ceiling for its 150MW/300MWh liquid-cooled ESS tender[10], it wasn’t just a pricing stunt. The company had secretly verticalized:
- In-house battery pack production since Q1 2024
- Proprietary thermal management tech cutting cooling costs by 40%
- Bulk lithium contracts locked at 2023 prices
What’s Next for ESS Prices? 3 Trends to Watch
1. The 314Ah Cell Revolution
Manufacturers are all-in on jumbo-sized battery cells:
- CATL’s 314Ah cells now cost 0.3元/Wh in bulk[4]
- 25% fewer cells per rack → 15% lower BOS costs
2. “Battery-Plus” Bundling
Forward-thinking developers are masking ESS costs through:
- Solar-storage PPAs (e.g., 0.6228元/Wh EPC bids with integrated PV)[5]
- Virtual power plant revenue-sharing models
3. Policy Wildcards
With China’s 2025 carbon neutrality push, expect:
- Stricter cycle life requirements (6,000+ cycles becoming standard)
- New safety certifications adding 0.05-0.1元/Wh to compliant systems[8]