Accelerating Decarbonization and Rebuilding the Value of the New Electric Industry

The deadly threat of the energy crisis is also the sweet spot for new energy. Chinese solar and storage companies are riding the wave. Amid the backdrop of US-Iran military conflicts, on March 11, the A-share inverter sector experienced a rare surge.

European Commission President Ursula von der Leyen stated in a speech to the European Parliament that the Middle East situation has impacted the global energy market. Turmoil in the Gulf region has rapidly driven up prices. As long as Europe continues to import large amounts of fossil fuels from unstable regions, it cannot escape vulnerability and dependence. She pointed out that since the conflict erupted, natural gas prices have risen 50%, oil prices 27%, and in just 10 days, European taxpayers have paid an extra approximately 3 billion euros for fossil fuel imports—highlighting the cost of energy dependence. Von der Leyen emphasized that the EU will adhere to a long-term strategy of developing renewable energy and nuclear power domestically and is formulating plans to lower energy prices.

Market recovery is positive but requires calm analysis.

European household energy storage shows signs of localized revival—has this wave truly arrived?

Hungary’s subsidy policies have indeed boosted local household storage demand, but can this partial revival represent a nationwide European market rebound?

Do the energy price fluctuations caused by US-Iran conflicts truly trigger household storage purchases across Europe?

Are EU subsidy policies uniform nationwide or fragmented regionally?

In the context of overall prosperity in European energy storage, which Chinese companies are truly benefiting from this localized revival, and which are just riding the trend?

What lessons can domestic large-scale storage market overcompetition offer to household storage companies?

Everything is starting to feel like 2022 again!

That year was a traumatic memory for Europeans. They not only remember the security impacts of the Russia-Ukraine conflict but also painfully recall the energy supply and price shocks that followed.

Prices soared, supply concerns loomed over the continent, and governments were forced to spend hundreds of billions of euros rescuing households and industries. Now, due to another uncontrollable European war, oil and natural gas prices have surged again. Leaders are scrambling to find solutions.

G7 finance ministers held an emergency meeting, stating they are “ready at any time” to take “necessary measures,” including deploying emergency oil reserves. However, they did not make firm commitments. French Finance Minister Bruno Le Maire, chairing the meeting, said the G7 has not yet reached an agreement.

Meanwhile, the Strait of Hormuz—the vital shipping route for 20% of global oil—remains effectively closed due to Iran’s threats to shipping. Oil and gas production in several Gulf countries has slowed or stopped, with Iran’s drones and missiles targeting energy infrastructure.

This is directly affecting Europe, with gasoline prices already rising. Natural gas prices—the main driver of the 2022 crisis—are also soaring, briefly exceeding €60 per MWh. While still below the peak of 2022, this is the highest level since then.

Ursula von der Leyen warned EU ambassadors that “what we are seeing now is a regional conflict with unimaginable consequences.” She listed impacts on energy, trade, and finance, emphasizing that “these spillover effects are now a reality.”

On March 4, 2026, in Fujairah, UAE, a drone intercepted by air defenses caused an explosion that ignited a fire and produced thick smoke.

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European energy storage is generally prosperous, with localized household storage revival—not a full-scale explosion!

Recently, we’ve been monitoring the global energy crisis driven by the risks in the Strait of Hormuz. According to IEA data, about 20 million barrels per day of crude oil are transported through this strait, accounting for 25% of global maritime oil trade, and it also handles 19% of LNG trade. Its security directly influences global energy prices. IEA states that roughly 80% of the oil transported through Hormuz ultimately flows to Asia, with limited direct impact on European energy supply, but indirect effects via re-pricing in the global LNG market.

Geopolitical escalation has caused short-term volatility in European energy markets. On March 9, 2026, the Dutch TTF natural gas futures for April rose 11.59%, closing at €59.57/MWh, up from €31.96/MWh on February 27—a jump of 86.4% over six trading days. Brent crude oil futures in London briefly hit about $119 per barrel, the highest since 2022. However, whether this short-term price spike translates into widespread household storage purchases across Europe remains unsupported by authoritative data; more likely, it reflects market sentiment.

Policy-wise, Hungary’s subsidy policies have been the direct catalyst for localized household storage revival.

According to an official statement by Hungary’s Prime Minister’s Office on December 15, 2025, the country launched a household energy storage plan with a total budget of 100 billion forints (about €2.61 billion). Eligible households can receive non-repayable subsidies of up to 2.5 million forints (about €6,532) for purchasing 10kW storage systems and related installation, covering up to 80% of costs.

Applications opened on February 2, 2026, and run until March 15. Gábor Czepek, State Secretary of the Hungarian Ministry of Energy, confirmed on Facebook that priority is given to PV users who have or will exit net metering, and to small rural settlements.

It’s important to note that Hungary’s energy structure differs significantly from Western and Southern Europe. Data shows that in the first half of 2025, residential electricity prices in Hungary were around €10/100kWh, among the lowest in the EU. The economic logic for household storage demand there relies heavily on subsidies, unlike in Germany or Italy, where market-driven demand is more prevalent. Therefore, Hungary’s experience cannot be directly extrapolated to a pan-European household storage boom.

EU policies mainly focus on the synergy between renewable energy and building efficiency, not on directly promoting household storage to explode nationwide. The EU’s EPBD (Energy Performance of Buildings Directive) explicitly states that by December 31, 2026, new public and non-residential buildings should deploy appropriate solar energy systems where feasible; for residential buildings, solar requirements will take effect by December 31, 2029.

Looking at the overall European market, energy storage is growing, but household storage shows only localized revival.

According to SolarPower Europe’s 2025 review, the EU added 27.1 GWh of new battery storage in 2025, a 45% increase. The main growth driver is utility-scale/grid storage, while residential storage declined 6% to 9.8 GWh. This indicates that the market’s prosperity is mainly driven by large-scale storage, with household storage only experiencing localized revival in markets like Hungary due to subsidies.

News from Chinese companies shows some phased growth in European orders for household storage.

Sungrow, in March 2026, signed a 1 GWh framework agreement with Swiss utility-scale storage developer Delta Capacity, supplying PowerTitan 2.0 liquid-cooled storage systems for European grid projects. This is a large-scale utility project, not household storage.

Gotion, a key supplier in Europe’s household storage sector, has seen phased overseas order growth. Our team visited Gotion’s Anhui workshop before the Spring Festival; it is operating at full capacity.

We believe that the recent rebound in A-share storage concept stocks is mainly driven by market sentiment and the overall prosperity of energy storage, rather than fundamental demand for household storage.

Locally in Hungary, according to Hungary Today (a reputable local English media), after the subsidy program launched, some applications were received in Q1 2026, supporting an estimated 40,000 households. Based on the total budget, this could cover thousands to tens of thousands of households. Whether the scale will expand further depends on official announcements.

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Subsidies Drive Local Demand; Geopolitical Impact Is Limited

Based on authoritative data, the recent localized revival of European household storage is primarily driven by Hungary’s subsidy policies. The influence of US-Iran conflicts and surge in computing power is limited and cannot support a conclusion of a “full-scale explosion.”

First, the US-Iran conflict is a short-term sentiment catalyst, not a core driver of household storage demand. As previously noted, 80% of oil transported through Hormuz flows to Asia, with limited direct impact on European energy supply. Its main effect is through re-pricing in the global LNG market, causing short-term volatility. Currently, there is no authoritative data showing this short-term price impact has broadly triggered household storage purchases across Europe, nor that it is strong enough to influence major markets like Germany, France, or Italy. The logic chain of “conflict escalation → European household storage explosion” is weak; more a macro narrative than a verified market fact.

Second, Hungary’s subsidy policy is the direct cause of the localized revival. Its high coverage rate, relatively low application thresholds, and effective reduction of household investment costs have stimulated local demand. But as noted, Hungary’s very low residential electricity prices mean that household storage economics mainly depend on subsidies. This cannot be generalized to Europe as a whole, and thus cannot be considered a “trigger” for a continent-wide boom.

Third, the core demand in Europe’s energy storage market is for utility-scale projects, not household storage. SolarPower Europe’s 2025 report shows that 45% of new storage capacity in 2025 was driven by utility projects, while household storage declined 6%. The growth logic has shifted from emergency demand in 2022 to large-scale utility deployment. Household storage only shows localized demand driven by subsidies.

Fourth, the impact of increased computing power on household storage is minimal. IEA’s “Energy and Artificial Intelligence” report projects that by 2030, data centers will consume about 150 TWh, with EU data centers accounting for roughly 15%. Data center power demand mainly supports grid-side storage and infrastructure, not residential household storage.

Additionally, we believe that this European household storage revival is fundamentally different from the 2022 Russia-Ukraine conflict-driven surge. The key difference is “localized subsidy-driven” versus “global emergency demand.”

From the root causes, the 2022 energy crisis was primarily about supply disruption.

Before the conflict, the EU relied heavily on Russian natural gas—over 40% of its gas, 27% of oil, and 46% of coal imports came from Russia. The Nord Stream 1 pipeline transported over 55 billion cubic meters annually, accounting for more than a third of Russian exports to Europe. After the Russia-Ukraine conflict, the EU imposed comprehensive sanctions on Russian energy, causing supply to plummet, natural gas and electricity prices to soar, and risking “gas and power outages.” The household storage demand then was a continent-wide emergency, with a systemic and sudden nature.

In contrast, the current localized revival is driven by subsidies in specific markets, not by energy supply disruptions. The US-Iran conflict has not caused direct supply interruptions in Europe, only short-term price fluctuations. Demand is concentrated in markets like Hungary with strong subsidies; major markets like Germany and Italy have not seen a significant demand surge.

During the 2022 crisis, household storage demand was mainly for emergency backup power, with low-end, small systems. Now, in Hungary and similar markets, demand includes PV-related needs, but the core remains cost-sensitive, subsidy-driven, not representative of the overall European trend.

Market participants in 2022 were mainly local companies; Chinese firms had a small share. Recently, Chinese companies’ European market share has increased.

According to SolarPower Europe, this localized revival is a subsidy-driven demand release, not a supply-demand imbalance causing a full-blown explosion. Capital speculation has amplified the A-share energy storage rebound but lacks fundamental support.

Supply-wise, the European household storage market is not in a state of full shortage. The 2025 report shows only 9.8 GWh added, down 6% year-on-year, indicating overall weak demand, with only Hungary and a few markets showing temporary growth due to subsidies. Globally, most capacity is in China; Europe’s overall demand remains limited, with no systemic supply gap.

Regarding demand sustainability, Hungary’s demand relies on subsidies, which may be temporary. Once subsidies end or change, demand could decline. Other major markets show no clear signs of demand recovery. SolarPower Europe predicts that the EU household storage market will not return to 2022’s explosive level in the short term.

From a capital perspective, the recent rebound in A-share storage stocks is mainly driven by market sentiment and overall storage prosperity, not by fundamental demand. Some stocks without real European orders or business are also rising temporarily, but with limited gains and quick corrections. This indicates that speculation only amplifies the trend, not changes the core situation.

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Does the EU Still Have Funds for Subsidies?

Our team finds that EU household storage subsidy policies are fragmented, with no unified national standard.

European countries’ subsidy policies are highly fragmented, often combining federal, regional, and temporary programs. There is no single nationwide standard, and subsidy levels and coverage vary widely.

For example, Hungary—our key market for this localized revival—has a high coverage rate and broad support.

According to an official statement by Hungary’s Prime Minister’s Office on December 15, 2025, the country launched a household energy storage plan with a total budget of 100 billion forints (about €2.61 billion). Eligible households can receive non-repayable subsidies up to 2.5 million forints (about €6,532) for purchasing 10kW storage systems and related equipment, covering up to 80% of costs. Conditions include having or planning to install solar PV; applications run from February 2 to March 15, 2026. The storage systems must meet technical thresholds: ≥10kWh capacity, DC coupling, zero or minimal feed-in, new inverters ≤5kW, and minimum 100V voltage.

Hungary also offers subsidies for industrial energy storage, with 50 billion forints (about €1.3 billion) in grants, forming part of its energy transition policy (Hungary Today, March 3, 2026).

Germany currently lacks a nationwide household storage subsidy. Discussions in 2026 include potential removal of small rooftop PV subsidies; some states have old programs. VAT reductions for off-grid systems are limited to specific scenarios.

France offers some tax incentives for clean tech manufacturing, and reforms in grid fees are underway. Support measures are regional or temporary.

Austria’s PV subsidies are about €160/kW (small systems), and battery storage subsidies around €150/kWh, stackable with European manufacturing bonuses. Budget increased from €12 million to €48 million, but policies vary regionally.

Poland uses a tiered subsidy model: 45% for large household storage projects, 55-65% for small and medium projects, with a dedicated 4 billion zloty fund. But subsidies are limited to certain enterprise types.

Spain has no nationwide household storage subsidy. “Grid-side 85%, user-side 65%” subsidies are only for specific funds or tenders. The country launched a €700 million aid plan mainly for overall energy projects, not specifically household storage.

At the EU level, the REPowerEU plan is the core fund to address the energy crisis and promote energy transition, with a total of €210 billion, about 15% allocated to household storage, PV, and distributed energy. The EU Battery Passport, now operational, standardizes quality and promotes integration with renewables.

Despite long-term economic challenges and high debt levels, the EU and member states use a mix of “EU funds + national budgets + social capital” to sustain subsidy policies.

First, EU funds are key supplements. The REPowerEU plan, ERDF, and EIB loans support member states’ storage subsidies. REPowerEU’s €210 billion includes funds for distributed energy; EIB offers low-interest loans (2-3%), up to 20 years, easing fiscal pressure.

Second, national budgets prioritize energy transition. Countries allocate funds for storage and renewables, often by cutting other expenditures. For example, Germany’s 2026 budget allocates €8 billion for energy transition, including some for household storage; France increases energy taxes and carbon levies to fund energy projects.

Third, social capital participation is encouraged. Governments promote private investment through guarantees, loans, and leasing models, reducing household costs and filling subsidy gaps.

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Who Benefits, Who Just Rides the Trend?

The economic comparison between solar+storage and fossil fuels significantly influences household storage demand. Public data shows regional differences: advantages are mainly in Southern and Western Europe, where sunlight and electricity prices are higher, but no authoritative global share data exists.

Southern Europe (Spain, Italy, Portugal, Greece) is the core advantage zone. With over 2000 hours of sunlight annually, high PV efficiency, and electricity prices above €0.3/kWh, these regions have relatively short payback periods of 3-6 years, making storage more economical. Western Europe (Germany, France, Netherlands) has less sunlight but higher prices (~€0.25-€0.3/kWh), with subsidies improving economics. Central and Eastern Europe (Hungary, Poland, Czech Republic) have lower sunlight (~1500-2000 hours) and prices (~€0.2-€0.25/kWh), making storage less competitive without subsidies.

Northern Europe (Sweden, Norway, Denmark) has less sunlight (<1500 hours) and lower electricity prices, so storage is less economical, relying more on wind and grid integration.

System costs have fallen significantly in recent years, boosting parity prospects. From 2022 to 2026, the costs of integrated PV+storage systems in Europe declined, driven by lower prices for PV modules and batteries. However, regional and configuration differences remain.

In the context of overall European storage prosperity and localized revival, A-share storage concept stocks have seen phased rebounds. But some companies are merely “riding the trend” without real European orders. The key criterion for genuine benefit is whether they have actual European storage business and orders.

First, core beneficiaries: companies with clear European market presence and confirmed orders, mainly benefiting from utility-scale growth and some from household revival.

Sungrow, a leading storage firm, has long been active in Europe. In March 2026, it signed a 1 GWh framework deal with Swiss developer Delta Capacity, supplying large-scale grid storage. It also has some household storage projects, but no evidence of large-scale orders yet. Its gains are mainly from the overall European storage boom.

Pylontech, a domestic household storage leader, has over 80% overseas market share, with some projects in Hungary and Central Europe. Its growth depends on local subsidies, but detailed order data is not publicly available.

Gotion, with stable European household storage business, benefits from local policies. Its phased growth is promising but needs further confirmation.

Second, marginal beneficiaries: companies with European storage-related activities but not core household storage, indirectly benefiting from overall market growth.

CATL, for example, supplies batteries to European projects, mainly utility-scale and some household storage, benefiting from overall growth.

Jinlang, inverter manufacturer, supplies European markets, indirectly benefiting from storage expansion.

Third, hype-driven companies: those without European storage business or orders, whose stock rises mainly on market sentiment. These are speculative and risky, with high correction potential.

05

The Pain of Overcompetition in China’s Large Storage Market: How to Avoid Externalization?

The overall prosperity of European storage, especially utility-scale, offers opportunities for Chinese PV+storage firms. Localized household revival also creates some short-term opportunities. But companies should remain rational, avoid over-optimism, and focus on long-term value.

In the context of overall market prosperity, China’s large storage sector faces internal overcompetition—excess capacity, weak demand, and unreasonable bidding mechanisms—leading to “overproduction without revenue.” This comparison warrants reflection.

The core causes include supply glut, demand rigidity, and flawed bidding systems. Overly aggressive cost reduction by project developers and fierce price wars among leading firms have driven profit margins down.

For household storage companies, lessons from domestic overcompetition include maintaining rational competition, avoiding low-price traps, and establishing healthy market order. Leading firms should lead by example, improve cost control, and manage risks.

Postscript

Rational View of Local Revival: Focus on Long-term Growth

We believe that Europe’s energy storage market remains generally prosperous, with utility-scale storage as the main growth engine. Household storage shows localized revival mainly due to subsidies, not a full-scale explosion.

Sustainable growth in utility storage is supported by EU policies and energy transition momentum. Household storage revival is limited and dependent on subsidies; once policies change, demand may decline. It’s unlikely to replicate the 2022 boom across Europe.

For Chinese PV+storage firms, the overall European market is a rare opportunity. But they should remain rational, avoid blindly following trends, and focus on core markets and high-quality products. Building local partnerships, technological innovation, and cost management are key to long-term success.

The European energy transition will continue, and household storage will gradually recover, but not in a short-term explosive manner. Chinese companies with technological and cost advantages can gain a higher share, provided they adhere to rational competition and quality-first principles.

In summary, Europe’s storage prosperity is noteworthy, but the localized revival of household storage should not be overstated. Chinese firms should judge carefully, plan precisely, prioritize quality, and avoid overcompetition—only then can they seize the historic opportunity of energy transformation and achieve sustainable growth, contributing China’s strength to global energy transition.

Editor: Zhen Tan