AI, overseas orders to drive new China renewable growth cycle

Energy storage returns are set to rise 37% CAGR amidst spike in high-margin overseas orders.

China’s renewable electricity sector is expected to enter a new growth cycle in 2026, driven by anti-involution policies and technological breakthroughs, according to CGS International.

Rising demand from artificial intelligence data centres, rapid overseas expansion, and global policy support are driving growth in the energy storage sector.

"The demand for commercial & industrial energy storage in Europe, residential energy storage in Australia, and both segments in emerging markets remains robust, leading to a sharp increase in overseas orders for Chinese enterprises," the report added. 

Chinese independent energy storage projects are expected to generate an internal rate of return with a compound annual growth rate of approximately 37% from 2025 to 2027.

Domestic onshore wind installations in 2026F are estimated at 110GW to 120GW, whilst offshore installations are projected at 12GW to 16GW.

Onshore turbine prices have stabilised since the third quarter of 2024, whilst offshore price declines remain limited, the report said.

Original equipment manufacturers are expected to recover, whilst submarine cables and pile foundations are expected to benefit from higher margins through overseas growth.

China’s solar capacity is also projected to reach 230GW to 250GW, alongside the expansion of back-contact battery capacity, mass production of perovskite, and silver-reduction technologies.

Price pass-through for solar modules is expected to commence as early as spring 2026.

The report maintains an “overweight” rating on China’s renewable electricity sector.