Image: HithiumChina has built the world’s largest battery storage fleet in record time. According to a new report from energy think tank Ember, total installed lithium‑ion battery storage capacity reached nearly 150 GW by the first quarter of 2026 – more than half of global BESS capacity, up from just over 20% in 2021. Now, the country is targeting 300 GW of new energy storage by 2030 under its 15th Five‑Year Plan.
But as Biqing Yang, energy analyst for Asia at Ember, puts it: “Having the batteries is not the same as using them.”
At Sunlink (Xiamen), we see this as a pivotal moment for solar‑storage integration in China and beyond. The shift from mandate‑driven expansion to market‑driven utilisation will reshape how batteries are deployed, operated, and valued – and create new opportunities for developers, investors, and equipment suppliers.
The Policy Pivot: Document 136 Ends Co‑Location Mandates
In February 2025, China’s National Development and Reform Commission (NDRC) and National Energy Administration (NEA) issued Document 136, which ended the requirement for new wind and solar projects to co‑locate battery storage.
Previously, many renewable projects were forced to add storage as a condition of grid connection – regardless of whether it made economic sense. This led to rapid capacity growth, but also to underutilised assets. Ember notes that renewable co‑located batteries historically run fewer annual charge‑discharge cycles than standalone systems, due to limited dispatch flexibility, rigid operational patterns, and restricted revenue streams.
The policy change marks a deliberate move toward market‑driven deployment, where storage projects must justify themselves on economic merit rather than regulatory obligation.
The Numbers: Standalone Storage Takes Over
Between January and April 2026, standalone battery storage systems – which operate independently and can participate directly in power markets – accounted for 84.7% of new installed capacity. In contrast, renewable co‑located systems accounted for only 8.4%.
This is a dramatic reversal from earlier years, when co‑location was the default. It signals that developers and investors increasingly see standalone storage as a better business case: more flexible dispatch, access to multiple revenue streams (spot markets, ancillary services, capacity payments), and higher utilisation rates.
What’s Driving the Shift?
Ember identifies several factors reinforcing the pivot:
Capacity remuneration mechanisms are expanding to include battery storage, providing a stable revenue floor.
Provincial pilots now allow the same battery assets to participate in both spot power and ancillary service markets simultaneously – unlocking multiple value streams.
Market integration is being prioritised over sheer capacity growth, as policymakers recognise that underutilised batteries do not support grid stability or decarbonisation.
The Utilisation Challenge
Despite the policy shift, utilisation remains a challenge. Co‑located storage has historically been used less intensively, often serving only as a compliance checkbox. Even standalone systems face competition from pumped hydro and thermal plants in some regions.
The 300 GW target is ambitious. Achieving it will require not just building batteries, but operating them well – which depends on:
Mature spot and ancillary service markets
Grid operators willing to dispatch storage frequently
Clear price signals that reward flexibility
Sunlink’s Perspective: Opportunities for Solar‑Storage Integration
As a global PV and storage solution provider, Sunlink is closely watching this transformation. The pivot from scale to utilisation has several implications for our customers and partners:
For developers: The end of co‑location mandates means you no longer have to add storage to every solar project unless it makes commercial sense. Evaluate standalone BESS opportunities in regions with strong price spreads and ancillary service markets. For projects that do include storage, focus on dispatch optimisation and revenue stacking – not just compliance.
For investors: The shift toward market‑driven storage creates a more transparent risk‑return profile. Standalone batteries with access to multiple revenue streams (energy arbitrage, frequency regulation, capacity payments) are more bankable than co‑located assets with limited use cases. Track provincial market reforms – some regions are moving faster than others.
For asset owners and operators: With more emphasis on utilisation, monitoring and analytics become critical. Understanding when to charge, when to discharge, and which market to participate in can make the difference between a profitable asset and an underperforming one. Pairing storage with solar and smart energy management software maximises revenue capture.
For equipment suppliers: China’s storage boom continues, but the product mix is changing. Standalone BESS requires larger, more sophisticated systems with longer durations and advanced grid‑forming capabilities (as discussed in our previous analysis). Suppliers who can deliver integrated PV‑storage solutions with market‑ready controls will have a competitive advantage.
What This Means for Global Markets
China’s shift from scale to utilisation is not just a domestic story. It provides a blueprint for other markets – including Europe, the US, and Southeast Asia – that are building storage capacity rapidly. The lesson is clear: mandates can build capacity, but markets must deliver utilisation.
Policymakers should prioritise:
Market designs that reward flexibility (spot markets, ancillary services, capacity payments)
Allowing storage assets to stack multiple revenue streams
Phasing out forced co‑location requirements once markets are mature enough
Conclusion
China’s battery storage sector has reached a critical inflection point. The era of mandate‑driven expansion is giving way to a more market‑oriented phase. The 300 GW target by 2030 is ambitious, but the real measure of success will be how well those batteries are utilised – not just how many are installed.
At Sunlink, we are committed to delivering integrated solar‑storage solutions that are not just compliant, but commercially optimised. As the Chinese market pivots to utilisation, we are ready to help developers, investors, and operators capture the full value of their storage assets.
Ready to optimise your solar‑storage project for utilisation, not just compliance? Contact Sunlink to learn about our integrated solutions and market advisory services.