Storage Overtakes Solar at Sungrow as H1 Revenue Falls 29%

Sungrow reported that battery energy storage revenue exceeded its solar inverter business in the first half of 2026 on 25GWh of storage shipments, while group revenue fell 28.99% year-on-year and net profit attributable to owners of the parent company dropped 32.01%.

Sungrow, the Chinese power electronics group that built its name on solar inverters, has crossed a line that many in the renewables supply chain saw coming but few expected this early: its battery energy storage business now brings in more revenue than the photovoltaic products that defined the company. Storage shipments reached 25GWh in the first half of 2026.

The milestone arrives inside a much harder set of headline numbers. Group revenue for the first half fell 28.99% against the same period a year earlier, and net profit attributable to owners of the parent company dropped 32.01%, according to results reported by Energy Storage News. In other words, storage did not take the top slot because it grew past a thriving solar business. It took the top slot in a shrinking company.

Two businesses moving in opposite directions

Read the two facts together and the shape of the half becomes clear. A near-29% decline in group revenue with storage now the largest single line implies that the PV side contracted faster than the group as a whole. That is consistent with what has been happening across the inverter and module value chain: ferocious price competition, thinner margins on every watt shipped, and buyers in several major markets pausing new solar procurement while they wait for policy and grid-connection queues to settle.

Storage, by contrast, is still in its volume land-grab phase. Utilities, independent power producers and increasingly data-centre developers are contracting battery energy storage systems — BESS, in the industry shorthand, meaning containerised lithium-ion batteries plus the inverters and controls that connect them to the grid — at a pace that solar demand growth no longer matches. Sungrow sells into that market with the same power electronics competence that made it an inverter leader, which is why the transition inside the company has been quick.

The 25GWh shipment figure is the number to hold onto. Shipments are a volume measure, not a revenue measure, and the gap between the two is where the story gets uncomfortable. A company can ship record gigawatt-hours and still report falling revenue if the price per gigawatt-hour is dropping fast enough. Sungrow's own numbers do not break that out, but the combination of a new revenue crown for storage and a sharply lower group top line points squarely at deflation in system pricing.

What falling profit says about BESS pricing

Net profit attributable to owners of the parent company fell 32.01%, slightly steeper than the 28.99% revenue decline. When profit falls faster than revenue, operating leverage is working in reverse: fixed costs — factories, R&D, sales infrastructure — are being spread across a smaller revenue base, and pricing is not covering the difference.

For anyone buying batteries, that is straightforwardly good news. Cheaper systems mean more projects clear their financing hurdles, and storage economics improve across the board — arbitrage, frequency response, capacity payments and the co-located solar-plus-storage configurations that now dominate new build in several markets. Every dollar taken out of the delivered cost of a battery system pulls forward the point at which storage beats a gas peaker on price.

For anyone selling them, it is a warning. The BESS market is following the same curve solar modules and inverters travelled: rapid volume growth, aggressive Chinese capacity expansion, and margin compression that arrives faster than most business plans assume. Sungrow is among the better-positioned players in that fight, with scale, an installed base and a genuine electronics engineering advantage. If its earnings are down a third, smaller integrators without captive cell supply or a diversified product line are facing something harsher.

Who feels this next

The knock-on effects run in several directions.

• Battery cell and materials suppliers. Integrators under margin pressure push that pressure upstream. Cell makers, and behind them the lithium, nickel, cobalt and graphite suppliers, absorb part of any system price decline. Volume growth cushions it, but per-unit economics tighten.
• Project developers and utilities. Cheaper systems and a competitive vendor field improve the returns on storage projects and strengthen buyers' hands in procurement negotiations. Warranty terms, cycle-life guarantees and balance-sheet strength become the real differentiators once price stops being one.
• Western manufacturers. Domestic BESS producers in the United States and Europe are trying to build capacity into a market where the reference price is being set by Chinese suppliers operating at compressed margins. Tariffs and content rules change the arithmetic, but they do not change the underlying cost gap.
• Solar inverter competitors. If Sungrow's PV line is contracting, the pain is unlikely to be company-specific. Pricing and demand conditions in inverters are shared across the field.

Context in a market still paying up for the AI trade

Sungrow's results land in a market where investor enthusiasm has been concentrated elsewhere. On the most recent session before this report, the S&P 500 tracker SPY closed at $765.16, up 0.44% on the day from a prior close of $761.78, with the Nasdaq 100 proxy QQQ at $709.24, up 0.23%, and the Dow tracker DIA at $530.62, up 0.54% — all as of 20:00 GMT on 2 September 2026. Broad U.S. indices have been grinding higher on technology earnings, not on the renewables complex, where hardware deflation has repeatedly punished companies that grew volumes without protecting price.

That is the tension in Sungrow's half-year. The company has successfully pivoted its revenue mix toward the fastest-growing segment in the electricity system. It has done so while the numbers investors actually pay for — revenue and net profit — moved sharply lower. Both things are true simultaneously, and which one matters more depends entirely on whether storage pricing stabilises.

What to watch from here

Three things will determine whether the storage crown turns into an earnings recovery.

First, second-half shipment growth against second-half pricing. If gigawatt-hours keep climbing while revenue per gigawatt-hour keeps falling, the revenue line will not recover regardless of how much steel and lithium leaves the factory.

Second, the geographic mix. Storage margins vary widely by market, and orders in regions where grid services are properly remunerated command better pricing than commodity procurement in oversupplied markets.

Third, whether the PV business finds a floor. Storage now carries more of the company, but a solar inverter division shrinking faster than the group cannot be written off as immaterial. Stabilising it is the difference between a transition and a decline with a favourable mix.

Sungrow has answered the strategic question — it is a storage company that also sells inverters, rather than the reverse. The financial question, whether the storage market will pay enough for the privilege, remains open.

Key facts

• H1 storage shipments: 25GWh
• H1 revenue change: Down 28.99% year-on-year
• Net profit attributable to parent owners: Down 32.01% year-on-year
• Market backdrop (2 Sep 2026, 20:00 GMT close): SPY $765.16 (+0.44%); QQQ $709.24 (+0.23%)

Frequently asked questions

What changed in Sungrow's revenue mix in the first half of 2026?

Battery energy storage revenue exceeded revenue from the company's photovoltaic business for the first time, making storage Sungrow's largest single revenue line. The shift happened as group revenue fell 28.99% year-on-year, which implies the solar inverter side contracted faster than the company as a whole rather than storage simply outgrowing a healthy PV business.

How much battery storage did Sungrow ship?

Sungrow reported first-half battery energy storage shipments of 25GWh. That is a volume measure covering containerised battery systems and associated power electronics. Shipment volume does not translate directly into revenue, because system prices per gigawatt-hour have been falling across the global BESS market as capacity expands and competition intensifies.

Why did profit fall faster than revenue?

Net profit attributable to owners of the parent company dropped 32.01% while revenue fell 28.99%. When profit declines faster than the top line, fixed costs such as factories, research and development and sales infrastructure are being spread over a smaller revenue base, and pricing is not covering the shortfall — a sign of reverse operating leverage.

What does this mean for battery storage prices?

The combination of record shipment volumes and sharply lower revenue and profit points to continued deflation in battery energy storage system pricing. That benefits project developers and utilities, whose storage economics improve with every dollar removed from delivered cost, but squeezes integrators and pushes margin pressure upstream to cell makers and battery metals suppliers.

Does Sungrow trade on a U.S. exchange?

Sungrow is a Chinese-listed company and does not trade on a U.S. exchange. No U.S. ticker applies. Investors seeking exposure to the same demand trend more commonly access it through clean energy or battery-focused funds, or through listed suppliers of lithium, nickel, graphite and other battery materials in Western markets.

What should investors watch next from Sungrow?

Three things: whether second-half shipment growth is accompanied by stabilising prices per gigawatt-hour, the geographic mix of orders since storage margins vary sharply by market and regulatory regime, and whether the photovoltaic inverter business finds a floor. Storage leadership only becomes an earnings recovery if pricing stops falling faster than volumes rise.

Sources

• Sungrow’s battery storage revenue tops PV business, H1 shipments hit 25GWh — Energy Storage News

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