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Panoramic Interpretation of China's Energy Storage Policy: A New Wave of Energy Investment Led by the State
Created on 09.01
- A top-down wave of energy storage policy is sweeping across the country. From central ministries to local governments, more than 45 direct subsidy policies will be implemented intensively by 2025. China's new energy storage industry has ushered in an unprecedented golden development period.
As of now, China's new energy storage installed capacity has jumped from about 3 million kilowatts at the end of the "13th Five-Year Plan" to 73.76 million kilowatts by the end of 2024, achieving leapfrog development. Behind this explosive growth is strong support from national and local policies.
In the first half of 2025 alone, the total compensation amount for the discharged electricity from the independent new energy storage power stations included in the plan in Inner Mongolia has exceeded 200 million yuan. From Zhejiang in East China to Shenzhen in South China, and from Inner Mongolia in North China to Sichuan in Southwest China, local governments are paving the way for the development of the energy storage industry through substantial subsidies and clear policy guidance.
01 National Strategy: Top-level design lays the foundation for the industry
2025 is the final year of the national "14th Five-Year Plan" and also a key year for the new type of energy storage to transition from the initial stage of commercialization to large-scale development. At the national level, a policy framework for the development of new energy storage has been established with "four beams and eight pillars."
The "China New Energy Storage Development Report (2025)" released for the first time by the National Energy Administration clearly points out that new energy storage is a key technology to support the construction of a new energy system and a new power system.
The report shows that since the "14th Five-Year Plan," the development of new energy storage in our country has achieved remarkable results. By the end of 2024, the installed capacity of new energy storage nationwide will reach 73.76 million kilowatts, nearly 25 times the scale at the end of the "13th Five-Year Plan."
The National Energy Administration, in conjunction with the National Development and Reform Commission and other units, is actively improving the policy system for new energy storage, promoting the transition of industry development from policy-driven to market-driven. It is necessary to quickly improve the pricing mechanism for new energy storage, accelerate the establishment of a capacity compensation mechanism that adapts to the development of new energy storage, and ensure reasonable returns for new energy storage.
02 Local Response: Provincial Policies Blooming in Variety
Under the guidance of national policy, provincial governments have successively introduced specific implementation plans and subsidy policies, creating a situation of a hundred flowers blooming.
According to the incomplete statistics of the CNESA DataLink Global Energy Storage Database, as of the end of 2024, a total of 162 new energy storage subsidy policies have been issued across the country. Among them, the number of subsidy policies issued in 2024 reached 52, a year-on-year increase of 29.7%.
In May 2025, the Shanghai Municipal Development and Reform Commission issued the "Management Measures for the Reward Fund for the Regulation Capacity of the New Power System in Shanghai," which provides rewards for energy storage projects based on actual discharge amounts: independent storage 0.35 yuan/kWh, user-side storage 0.2 yuan/kWh, with continuous rewards for 3 years.
The Inner Mongolia Autonomous Region Energy Bureau issued a notice on March 2025 regarding the acceleration of new energy storage construction, providing a compensation of 0.35 yuan/kWh for independent new energy storage power stations included in the regional plan, with an implementation period of up to 10 years.
The Sichuan Provincial Development and Reform Commission will issue policies in August 2025 to provide subsidies for new energy storage projects at a rate not exceeding 15% of the total investment, with a maximum of 20 million yuan for a single project.
Gansu Province has innovatively implemented the "Fire Storage Co-subsidy" policy, where new types of energy storage on the grid side enjoy the same capacity compensation standard as coal-fired power units—330 yuan/kW/year.
03 Subsidy Form: Transition from Installed Capacity to Actual Efficiency
From the perspective of subsidy types, they are mainly divided into four categories: charging and discharging subsidies, investment subsidies, capacity subsidies, and industrial subsidies. The first three are mainly used to support energy storage station projects, while the latter is mainly used to stimulate local industrial investment. Among the policy types released in 2024, industrial subsidies have the highest number of releases, accounting for 38%, followed by subsidies for energy storage stations based on discharge volume, accounting for 29%.
A significant change in the energy storage subsidy policy for 2025 is the shift from simple installation subsidies to more precise discharge subsidies and response subsidies. This transition marks a shift from "installed capacity assessment" to "actual operation and maintenance."
Discharge Subsidy
The discharge subsidy is based on the discharge amount of the energy storage station, encouraging the demonstration application of energy storage stations and realizing their value of use.
Zhejiang Province: Yongkang City has introduced a discharge subsidy of 0.8 yuan/kWh, and Ningbo Qianwan New Area provides a response subsidy of up to 2 yuan/kWh for virtual power plant applications (with a cap of 1.2 million yuan).
Chongqing Tongliang District: For new energy storage projects with an annual utilization of no less than 600 hours on the industrial and commercial side, a financial subsidy of 0.5 yuan/kWh will be granted to the project investors for 3 consecutive years based on the actual discharge amount of the energy storage facilities each year.
Shenzhen City, Futian District, Guangdong: For electrochemical energy storage projects that have been merged and put into operation with an actual investment of over 1 million yuan, support will be provided based on the actual discharge amount, not exceeding 0.5 yuan/kWh. The support period for each project is 3 years, and the support for the same project will not exceed 2 million yuan (this policy has been extended until December 31, 2025).
Tianjin Binhai New Area: For energy storage projects that are actually put into operation in the high-tech zone, financial subsidies will be provided to the project investors based on the actual discharge amount, with a subsidy standard of 0.5 yuan/kilowatt-hour. The subsidy period will not exceed 24 months from the actual operation date within the policy validity period, and the annual subsidy for a single project will not exceed 1 million yuan.
Capacity subsidy
Capacity subsidies are provided based on the installed capacity of energy storage power stations to encourage the construction of energy storage power stations.
Hefei City, Anhui Province: The subsidy is the largest, providing a subsidy of 400 yuan/kWh, with a maximum not exceeding 40 million yuan.
China (Shanghai) Pilot Free Trade Zone Lingang New Area: A reward support of 200 yuan/kilowatt-hour will be provided according to the installed capacity scale of the project, distributed over 3 years, with a maximum of 5 million yuan for a single project.
Chongqing Liangjiang New Area: A one-time subsidy is adopted, and the capacity subsidy is 200 yuan/kWh.
Dongguan City, Guangdong Province, Foshan City: A one-time subsidy is adopted, with a capacity subsidy of 100 yuan/kWh.
Investment Subsidy
Investment subsidies are provided based on the investment amount of energy storage power stations to encourage investment in energy storage power stations.
Beijing: For manufacturing enterprises that configure new energy storage facilities within their factory area or the park they are located in, achieving efficient energy utilization, a reward fund of up to 30% of the total investment included in the reward scope, with a maximum of 30 million yuan, will be granted.
Shenzhen Guangming District: The largest subsidy intensity, providing a subsidy of 20% of the investment amount, with a maximum not exceeding 10 million yuan (Note: In the revised draft for soliciting opinions, the funding cap for new energy storage station projects has been adjusted to 5 million yuan).
Jiangsu Suqian City: For major new energy storage projects with high technological content, energy-saving and environmentally friendly advantages, and strong driving effects, for equipment investments exceeding 100 million yuan during the current period, a subsidy of no more than 10% of the recognized equipment investment amount will be granted after the completion and production, with a maximum of 20 million yuan for a single enterprise. Sichuan Chengdu City: For energy storage projects that have been newly built and put into operation since 2023, an operating subsidy of 0.3 yuan/kilowatt-hour will be granted based on the actual discharge amount of the energy storage facilities each year. For different installed capacities, the annual maximum subsidies are 5 million yuan, 8 million yuan, and 10 million yuan, with subsidies granted for three consecutive years.
The shift in this subsidy method is forcing project owners to actively explore diversified market profit scenarios such as peak-valley arbitrage, demand response, and ancillary services, promoting a deeper integration of energy storage into the electricity system ecosystem.
04 Investment Prospects: Market Mechanisms Gradually Improve
With the advancement of the construction of the electricity spot market and the establishment of the capacity compensation mechanism, new types of energy storage will no longer rely on subsidies but will realize their true value through market mechanisms.
Inner Mongolia Autonomous Region has established a "discharge compensation + spot price difference" dual-dimensional revenue model, and energy storage power stations are transforming from cost centers to profit centers.
Shandong Province implements a compensation mechanism for independent energy storage based on available capacity, providing capacity compensation in tiers according to the two-year availability rate, with a standard upper limit of 330 yuan/kW·year.
Shenzhen Futian District provides support for electrochemical energy storage projects that have been merged and put into operation with an actual investment of over 1 million yuan based on the actual discharge amount, with a standard not exceeding 0.5 yuan/kWh. The support period for each project is 3 years, and the support for the same project does not exceed 2 million yuan.
The exploration of these market-oriented mechanisms has laid a solid foundation for the sustainable development of the energy storage industry.
05 Technology Orientation: Encourage Advanced Technology Innovation
Policies in various regions not only focus on the scale of energy storage but also emphasize technological advancement and safety.
The policies of Shanghai clearly stipulate that additional rewards will be given for advanced technology projects that adopt high safety and reliability technologies, including but not limited to solid-state batteries, flow batteries, sodium-ion batteries, and compressed air energy storage.
Shenzhen Guangming District has removed subsidies for major projects in the lithium battery sector in the revised policy, focusing more on demonstration applications and intelligent transformation, guiding the industry towards high-quality development.
This policy orientation encourages enterprises to increase R&D investment, promote the iteration and upgrading of energy storage technology, and form a virtuous development cycle.
06 Business Opportunities: How to Seize Policy Dividends
For energy storage companies, this is currently the golden window period for market layout.
Pay close attention to the latest policy dynamics on the official websites of the target provinces and cities, especially the official information released by the Development and Reform Commissions and Energy Bureaus of various regions.
During project planning and design, advanced technologies can be considered in order to obtain higher subsidies. At the same time, a deep understanding of local electricity market rules should be explored to combine policy subsidies with market returns, maximizing project economics.
Enterprises should also establish a regular update mechanism to promptly track policy changes. Energy storage policy updates iterate quickly, and many local policies are in the form of "draft for comments" or have set decline mechanisms and deadlines, requiring a high level of sensitivity.
07 Future Outlook: The Energy Storage Industry Matures
With the rapid development of new energy, the demand for new energy storage and other adjustment resources in the power system is continuously increasing. According to the research on the development demand of new energy storage during the "14th Five-Year Plan," new energy storage will continue to maintain a relatively fast development speed in the near future.
It is necessary to make efforts from multiple dimensions such as planning, innovation, market, and application to continuously promote the healthy and orderly development of new energy storage. It is essential to strengthen forward-looking planning, scientifically plan the development of new energy storage during the "14th Five-Year Plan" period, and coordinate the integration of new energy storage with various links of source, grid, and load.
Increase efforts to support technological innovation in the new energy storage field, strengthen tracking and publicity for new energy storage pilot projects and typical cases, and continuously promote the research and development application of various technologies to drive industrial innovation through technological innovation.
Accelerate the promotion of the electricity spot market, strengthen the connection between the medium and long-term electricity market and the spot market, scientifically expand the trading varieties of auxiliary service markets, and accelerate the establishment of a capacity compensation mechanism that adapts to the development of new energy storage.
From central to local, from installation subsidies to discharge volume rewards, China's energy storage policy system is continuously improving and innovating. This wave of energy investment led by the state is injecting strong momentum into the new energy industry.
For enterprises, this is both an opportunity and a challenge. Only by accurately grasping policy orientation and closely following market changes can they seize the initiative in the great development of the energy storage industry. In the future, with the improvement of the electricity market mechanism, new energy storage will no longer rely on subsidies but will realize its true value through market mechanisms.
As of August 2025, approximately 45 direct subsidy policies for energy storage have been intensively implemented nationwide, and this number continues to grow. The policy dividend period for China's energy storage industry has arrived. Are you ready?
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