Green energy transition drives the rise of energy storage concept stocks | Industry chain opportunities and leading company analysis

Why Are Energy Storage Concept Stocks Worth Watching?

Under the global net-zero carbon emissions commitments, countries face a common challenge: how to ensure stable power supply from intermittent renewable energy sources like wind and solar? The answer lies in energy storage technology. According to the latest forecasts from BloombergNEF and DNV, by 2030, the global cumulative energy storage installations will surpass the TWh(TWh) mark, with most provided by lithium-ion batteries.

Taking the UK as an example, wind power supplied 32.4% of electricity in the first three months of 2023, but wind output remains unstable, with negative electricity prices even occurring during early mornings. This phenomenon highlights a reality: without energy storage systems, renewable energy cannot fully realize its value. Coupled with the widespread adoption of electric vehicles and soaring electricity demand from AI data centers, energy storage has become a core driver of the global energy transition.

Because this market demand is primarily driven by government policies, energy storage concept stocks have relatively stable prospects and high predictability, making them a focus for many long-term investors.

Overview of the Energy Storage Industry Chain: From Raw Materials to Applications

To grasp investment opportunities in green energy energy storage concept stocks, one must first understand the entire industry chain structure. Energy storage technology refers to converting electrical energy into other forms of energy and releasing it when needed. Its applications span power systems, new energy, military aerospace, and transportation.

Battery manufacturing is the core, covering lithium batteries, solid-state batteries, sodium-ion batteries, and other technical routes. Representative Taiwanese companies include New Shengli (4931), Chang Yuan Technology (8038). Challenges faced include raw material price fluctuations and competition from international giants.

System integrators do more than just supply batteries; they also need to integrate inverters, battery management systems, energy management systems, delivering complete solutions. Taiwanese companies such as Huacheng (1519), Yali (1514), and Zhongxing Electric (1513) are representative in this field.

Power equipment and infrastructure include transformers, switchgear, etc., assisting in integrating energy storage systems into the grid, also involving the aforementioned companies.

Upstream raw material supply includes cathode materials (nickel, cobalt, manganese, lithium iron phosphate, etc.), electrolytes, separators, and downstream components like battery management systems and cooling equipment. Formosa Plastics (6505) has invested in electrolytes. These supply chain segments have high technical barriers but are highly correlated with international raw material market prices.

Performance of Key US Energy Storage Companies

Enphase Energy (ENPH) is a supplier of solar microinverters and energy storage systems. Its stock price has fallen sharply to around $36.98 in 2025. The company’s 2024 revenue is $1.46 billion, with 2025 estimates ranging from $1.48 billion to $2 billion due to differing forecasts. Q2 revenue of $363 million exceeded expectations, but Q3 guidance is only $330–370 million. If US residential solar subsidies end by year’s end, it could pose risks. TD Cowen and other brokerages have downgraded to Hold, with a target price of $45–$55. If policies continue and monetary easing persists, there is medium- to long-term upside potential.

NextEra Energy (NEE) is the largest utility company by market value globally, with 2024 revenue of $24.75 billion and a generation capacity of 73 GW. Its Q2 adjusted EPS is $1.05, up 9% year-over-year. The renewable energy division saw significant profit growth, with 3.2 GW of new renewable and energy storage projects, and total capacity exceeding 10.5 GW. The average analyst target price is $84–$86.20, representing a 15–20% upside from the current $72.65.

Generac Holdings (GNRC) manufactures residential and industrial backup power equipment. Its Q2 adjusted EPS of $1.65 far exceeded expectations, up 22% quarter-over-quarter, with revenue of $1.06 billion also surpassing estimates. Market expectations for full-year 2025 EPS are $7.54, with an average target price of $206.67, about 15% above the current $179.50.

Fluence Energy (FLNC), jointly launched by Siemens and AES in 2018, is a global energy storage product provider operating in 47 markets. Q3 earnings per share (EPS) were $0.01, exceeding expectations, but revenue was only $603 million, well below the forecast of $770 million. The company faces shipment delays due to US capacity expansion and supply chain challenges, with gross margin compressed to 15.4%. However, it maintains its full-year 2025 revenue target of $2.7 billion, expecting existing orders to convert into revenue by 2026.

EnerSys (ENS) is an industrial energy storage solutions provider with over 11,000 employees, operating in more than 100 countries. Its Q1 adjusted EPS was $2.08, exceeding expectations, with revenue of $893 million also surpassing estimates. The company’s market cap is $3.86 billion, with a P/E ratio of only 11.8 and a dividend yield close to 1%, attractive to conservative investors.

In-Depth Analysis of Leading Taiwanese Energy Storage Companies

Delta Electronics (2308), founded in 1971, is the world’s first supplier of switched-mode power supplies. In Q2 2025, its consolidated revenue reached NT$124.035 billion, up 20%, setting a quarterly record. Net profit was NT$13.948 billion, up 40%, with EPS of NT$5.37, a record high. Gross margin reached 35.5%, and operating margin was 15.1%, significantly better than previous periods, reflecting strong product margins and process optimization. The company plans to increase R&D investment and expand US capacity in the second half, with growth momentum highly anticipated.

Tatung (1504), established in 1956, started with electric motors and has developed into a group spanning motor systems, smart energy, and smart living. In Q2 2025, revenue was NT$15.6 billion, up 7.4%, but due to costs and exchange losses, EPS was NT$0.69, a decline for the year. The first half of the year saw a cumulative EPS of NT$1.23, down about 8%. The company maintains a solid financial structure, paying a cash dividend of NT$2.2 per share in the first half, with a yield of about 4.2%. Tatung is actively pursuing AI data center and smart energy opportunities through acquisitions like NCL Energy and strategic partnerships with Hon Hai.

Other notable Taiwanese companies in the energy storage and green energy industry chain include Taiwan Cement (1101), Huacheng (1519), Ritek (2349), and Tatung (2371), each playing different roles.

Key Reminders for Investing in Energy Storage Concept Stocks

Companies in the energy storage field have varying levels of technological competitiveness, especially new entrants with relatively weak foundations. If they cannot achieve long-term break-even or see declining revenues, their stock prices will face significant pressure. Investors must carefully select stocks, regularly monitor fundamentals, and establish effective risk management mechanisms.

Additionally, it’s important to note that R&D results from high-tech and concept stocks do not necessarily translate into marketable products or profits. When fundamentals or technical aspects reverse, disciplined investing and risk control will determine ultimate gains or losses.

Conclusion

The long-term growth trend of green energy transition and energy storage demand has been established. Each policy announcement can trigger market movements, providing investment opportunities. However, selecting companies with genuine competitiveness and solid financials is fundamental for long-term profits. Whether it’s the integrated energy giants in the US or Taiwanese energy storage system integrators, investors should consider them after thorough fundamental research.