BNEF Raises Energy Storage Forecast 30%, GEV Sees Comprehensive Push Earns Overweight Rating

Overview

This report is a weekly briefing on clean energy and power released by J.P. Morgan, based on management meetings with companies such as GEV and SHLS, as well as recent financial analysis. It systematically evaluates the fundamentals and market prospects of companies related to energy storage, power infrastructure, and new energy vehicles. Core conclusions are: global energy storage market growth expectations are significantly upshifted, especially in China benefiting from policy drivers; GEV, as an industry leader, has multiple business lines working in synergy, with institutions maintaining its Overweight rating; while some companies like Primoris face heavy setbacks due to execution issues, showing clear divergence within the industry.

Core views

Global Energy Storage (ESS) market prospects significantly upshifted: BNEF raised the 2026 global energy storage capacity installation forecast by approx. 30% (99GWh), with about 60% growth coming from China, mainly得益于 supported by the 15th Five-Year Plan, capacity pricing mechanisms, and spot market reforms. The US market expectation was also significantly raised from 48GWh to 65GWh. Domestic battery manufacturing is accelerating, with most demand expected to be met by local supply by 2030. GE Vernova (GEV) is heavily favored: In a meeting with the company CEO, management held positive views on gas power business pricing, data center power solutions (FTM vs BTM), electrification market expansion, progress with Prolec, and upcoming nuclear project catalysts. Institutions believe GEV is operating at full speed and maintains the Overweight rating. Fluence Energy (FLNC): Although Q2 earnings were slightly below expectations, key progress was signing long-term supply agreements (MSA) with two hyperscaler cloud service providers. The first order is expected to land in Q3, which is seen as a powerful reversal of market pessimistic sentiment. Primoris (PRIM) suffered major setbacks: Its energy sector's extensive execution issues (far beyond previous soil problems) led to cost overruns, project delays, and significant declines in new orders. Full-year earnings guidance was drastically lowered. Institutions believe investor confidence needs time to rebuild, and stocks remain in the 'penalty zone' in the short term. Other companies showed divergence: Ormat Technologies, Enlight Renewable Energy, Array Technologies, and Centuri all exceeded earnings expectations, or received valuation upgrades due to strong orders, improved cost structures, or smooth EPC business progress. Shoals Technologies (SHLS), while having strong orders, faces gross margin pressure due to new factory transitions and tariff impacts, but management expects Q1 to be the trough.

Analysis framework

This report adopts an analysis framework combining 'top-down + bottom-up'. First, through BNEF industry forecast data, confirm the strong growth momentum of the energy storage market (especially China and the US) from a macro level, establishing the industry prosperity tone. Second, through intensive management meetings (such as GEV, SHLS) and deep financial statement analysis, focus on specific companies' business execution, order structure, gross margin drivers, and future catalysts. For example, by analyzing FLNC's MSA signing, judge the long-term value of its data pipelines; by examining PRIM's execution issues, evaluate its earnings quality and management capabilities. Finally, conduct horizontal comparisons of different companies' performance to reveal industry internal divergence: some companies (like GEV, FLNC, Ormat) benefit from structural growth and quality execution, while others (like PRIM) are troubled by operational challenges. This multi-dimensional cross-validation makes the conclusion more persuasive.

Methodology notes

• Industry/Industrial Analysis FrameworkSupply-demand framework

  Supply and Demand Relationship of Energy Storage (ESS) Market Driven by Policy

  The report analyzes the core drivers of energy storage market growth, not only looking at the demand side (such as data centers, EV charging) but also emphasizing supply-side policy support (such as China's 15th Five-Year Plan, US MACR rules), pointing out that policy is the key to breaking supply-demand bottlenecks and accelerating market expansion, rather than solely relying on technology cost reductions.

• Company Fundamentals and Financial FrameworkFree cash flow analysis

  Contribution of Company Business Models to Free Cash Flow

  When analyzing GEV, the report specifically points out that its gas power business generates 'significant cash', implying that its core business has strong endogenous cash flow generation capabilities, serving as the financial foundation for expanding into new businesses like electrification and energy storage, reflecting the importance placed on 'cash flow quality'.

• Industry/Industrial Analysis FrameworkPenetration Rate S-Curve

  Market Development Stage of New Energy Vehicle Charging Infrastructure (EVGO)

  The report points out that while EVGO's charging business has grown, throughput per station declined year-on-year, and adjusted EBITDA remains negative, indicating it is in the early stage of 'mass network construction investment', consistent with typical new energy infrastructure 'S-curve' characteristics, where initial losses are to gain long-term market share.

• Competition and Strategy FrameworkMoat / competitive advantage

  Differentiated Competitive Advantages of Different Companies in Energy Storage and Power Fields

  When comparing FLNC and EOSE, the report respectively emphasizes the former as a 'market-leading pure play energy storage player' and having 'differentiated supply chain', while the latter focuses on 'long-duration energy storage' technical niche. This indicates that when evaluating enterprises, the institution pays attention to competitive barriers established by them in specific niches that are difficult to replicate quickly.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• GE Vernova (GEV)

  Benefiting from the comprehensive acceleration of three business lines: gas power, electrification, and nuclear energy, regarded by institutions as an industry leader and core allocation target.

  Strengths

  Market-leading gas power business provides stable cash flow, electrification and nuclear projects form future growth catalysts, management confidence is strong.

  Comparison

  Among covered companies, GEV is explicitly listed as 'Top Picks', with superior comprehensive business strength and catalyst richness compared to most peers.

  Risks

  Uncertainty in nuclear project landing, changes in global energy policies may affect demand.

• Fluence Energy (FLNC)

  Benefiting from signing long-term supply agreements with two major hyperscale clients, reversing market pessimism regarding its data pipeline.

  Strengths

  Successfully bound with hyperscalers, obtaining stable order sources, and can continuously obtain FEOC compliant battery supplies.

  Weaknesses

  Q2 earnings temporarily below expectations, execution risk still higher than industry average.

  Comparison

  Despite Q2 poor performance, MSA signing gives it a significant advantage over other pure-play energy storage companies in data storage opportunities.

  Risks

  Whether contract execution and project delivery can be completed on schedule are key risks.

• Primoris (PRIM)

  Damaged by extensive execution issues in the energy sector, leading to significant earnings downgrade and severe market confidence loss.

  Strengths

  Utilities sector performance is strong, but insufficient to offset energy sector drag.

  Weaknesses

  New orders seriously lacking, widespread issues of cost overruns and project delays, extremely low visibility of future performance.

  Comparison

  Among infrastructure service companies, the execution risks it faces are far higher than peers such as Quanta, MasTec.

  Risks

  Investor confidence recovery requires a long time, stock price may continue to be under pressure in the short term.

• Shoals Technologies (SHLS)

  Benefiting from strong orders and BESS backlog growth, but facing gross margin pressure, performance presenting 'volume growth, price decline' characteristics.

  Strengths

  Orders and endorsements hit new highs, management expects Q1 to be the trough for gross margin, improvement expected subsequently.

  Weaknesses

  Gross margin significantly affected by new factory transitions, tariffs, and freight costs, product mix has dilution effect on profit margins.

  Comparison

  Compared with Array Technologies, its order growth is equally strong, but gross margin pressure is more prominent.

  Risks

  Whether gross margin can continuously recover is the core risk; if not improved, it will affect valuation repair.

Key data

• 2026 Global ESS Installation Forecast~99GWhApprox. 30% increase from previous forecast by BNEF
• 2026 US ESS Installation Forecast65GWhSignificantly raised from previous forecast (48GWh)
• China's Share of ESS Increment~60%Accounts for the vast majority of the global total increase
• FLNC Deferred Shipment Amount~$80mmDue to temporary disruptions at Vietnam and Spanish ports, resolved
• Primoris FY26 Earnings Guidance Downgrade Magnitude~$110mmAdjusted, reflecting cost overruns and project delays
• Primoris FY27 EPS Downgrade Magnitude~$1.58Drop reaches 23%

Impact & implications

The report believes that the strong growth expectation of the global energy storage market brings benefits to the entire industry chain, especially benefiting companies with localized manufacturing capabilities and bonded with hyperscale clients (such as GEV, FLNC). At the same time, industry divergence intensifies, execution capability becomes a core competitiveness, companies exceeding expectations are likely to receive valuation upgrades, while companies with poor execution (such as PRIM) will continue to face dual pressure on valuation and confidence. Investors should pay attention to order quality, gross margin trends, and project delivery capabilities.

Risks

• Execution issues spreading among companies like Primoris may trigger concerns about overall project delivery capabilities in the industry.
• US MACR policy allows mixed battery usage, posing technical risks at policy and execution levels.
• Persistent high interest rates may affect financing costs and returns for renewable energy projects.
• Although China's energy storage market grows strongly, there is uncertainty in policy execution strength and local fiscal capacity.
• Global geopolitical tensions (such as Middle East conflicts) may disrupt supply chains and energy prices.

What to watch

• Specific project progress and timetable for GEV in the nuclear energy field.
• Whether the first batch of orders from FLNC and hyperscale clients will land as scheduled in Q3.
• Whether Primoris can achieve its expected order and margin recovery in the second half of the year.
• Whether storage targets and auction results set by various US states will continue to drive market growth.
• Updates from BNEF on energy storage forecasts for years after 2027.