Recently, while looking into the big trend of energy transition, I found that the energy storage track is getting hotter and hotter. With the global net-zero carbon emissions goal, the widespread adoption of electric vehicles, and wind and solar power being rolled out on a large scale, power storage concept stocks have already become an investment theme in the stock market that you can’t avoid.

Put simply, energy storage means storing excess electricity and releasing it when it’s needed. It sounds straightforward, but behind it is the entire industrial chain, including battery manufacturing, system integration, power equipment, and material supply. I recently put together a list and found that whether in the U.S. stock market or the Taiwan stock market, the leading companies in power storage concept stocks each have their own strengths.

In battery manufacturing, major players in the U.S. include Tesla, Enphase, and QuantumScape. Tesla’s Megapack is second to none in the global energy storage market, Enphase is also doing well in residential energy storage penetration, and QuantumScape is betting on the future of solid-state batteries. In Taiwan, Xin Shengli and Long Yuan Ke focus on lithium batteries and lithium iron phosphate materials, and their technical routes are also very clear.

The opportunities for system integrators are also significant. Fluence Energy is a joint venture between Siemens and AES, and it is among the strongest worldwide in grid-scale energy storage integration. In Taiwan, Delta Electronics is considered the strongest integrator—ranging from power conversion systems to energy management software end-to-end. Zhongxing Electric also has a considerable share in Taiwan Power Company’s frequency regulation market.

In the area of power equipment and renewable energy integration, U.S. companies such as NextEra Energy and Vistra combine energy storage with the power grid very closely. Vistra even converted an old coal-fired power plant into the largest energy storage base in the U.S., and that transformation idea is quite interesting. In Taiwan, Huacheng, Yali, and Shidian have also been benefiting recently from Taiwan Power Company’s grid resilience program.

In the upstream materials supply chain, Albemarle controls the world’s largest lithium mine, and Freeport-McMoRan’s copper mines are also benefiting from the surge in demand for energy storage equipment. In Taiwan, Formosa Chem & Fibre, San Hyo, Compu, and Meiqima all hold a place in the supply chain.

Why should you pay attention to power storage concept stocks now? According to BloombergNEF’s forecast, by 2030, the cumulative installed energy storage capacity worldwide will exceed the key threshold of a terawatt-hour, and most of it will be provided by lithium-ion batteries. In the UK, wind power provided 32.4% of electricity in the first three months of 2023, but wind output is unstable—negative electricity prices even appeared before dawn. At that time, energy storage facilities become an urgent necessity. Government-led policy support makes investment in this sector relatively stable and transparent, and the logic for long-term growth is also very clear.

However, investing in power storage concept stocks also requires seeing things clearly. Some companies still lack strong technological competitiveness, especially newer companies with weaker fundamentals. If they record long-term losses or see revenue decline, their stock prices will face enormous pressure. Therefore, stock selection must be cautious: keep monitoring changes in fundamentals and manage risk well.

To be honest, clean energy is inseparable from energy storage technology, and countries will continue to invest in it in the future. Whenever new policies are announced, they may stimulate the market, and investors can seize these opportunities. But like other high-tech sectors, in the energy storage space, a company’s R&D may not ultimately translate into commercialization and profitability—so discipline and risk control are the key to whether you can profit in the end. Now is a good time to observe power storage concept stocks, but the prerequisite is that you do your homework.