The storage industry enters the culling phase: financial resilience will determine who remains

For the first time, more than 100 gigawatts of storage were added to the global market in a single year, and artificial intelligence has turned electricity into the scarcest resource in the technology industry, while the number of suppliers is shrinking. After two years of a race to the bottom, the test for entrepreneurs in Israel is no longer just the price of the system, but the robustness of the supplier and the ability to provide support throughout the entire life of the project.

Israel has committed to producing 30% of its electricity from renewable sources by 2030, and the gap is still large: by the end of 2025, about 8 gigawatts of renewable sources were installed here, providing a little more than 16% of production. This gap attracts many suppliers to the market, and every entrepreneur has heard the same promise in the last two years: there is always another supplier, and always at a lower price. The demand is not a cyclical wave. It is a step. BNEF recorded a global addition of 112 gigawatts of storage in 2025, and expects an addition of 158 gigawatts in 2026.

According to the International Energy Agency (IEA), data centers consumed 485 terawatt-hours in 2025, and by 2030 they are expected to consume about 950 terawatt-hours, close to 3% of global electricity consumption. Google, Amazon, Meta, and xAI have already signed storage agreements. The significance for the Israeli entrepreneur is almost never discussed: a project in Israel today competes for production windows, cells, and commissioning teams against the deepest-pocketed buyers in the world, and not just on price against another project in Israel. The scope of the supplier's activity is no longer just a financial question: it is becoming a real supply risk.

At the same time, the number of suppliers is shrinking. In June 2025, the market received a reminder of where the price race leads. Powin, the third-largest integrator in the US with more than 11 gigawatt-hours installed, filed for bankruptcy, just eight months after raising a $200 million credit line led by KKR. An integrator is the entity that connects cells, inverters, cooling and fire extinguishing systems, and control software into a working facility, and commits to its performance: the body the entrepreneur depends on for twenty years. Systems worth more than two billion dollars were left in the field, dependent on the software of an insolvent company.

Since then, Northvolt, Morrow, and Varta have also collapsed, and in Israel, SolarEdge preceded them all when it closed its industrial storage division back in November 2024. A review that examined the status of 65 storage manufacturers in July 2026 found that diversified industrial groups show an average score of 5.54 on the Altman-Z index for predicting insolvency, while integrators dealing only with storage show a score of 0.08, a range that indicates financial distress. Meanwhile, the price floor has also risen: cell prices in China increased by about 30% at the beginning of 2026. A supplier that won a tender at 2025 prices without a solid balance sheet behind it will not be able to absorb the price increase. Someone else will pay it, usually the entrepreneur.

Due diligence today looks like credit underwriting. The industry has translated this risk into an agreed-upon index: Bankability. Since August 2026, a supplier seeking to be included in BNEF's Tier 1 list is required to present at least one project that two or more commercial banks have financed with non-recourse financing. In practice: audited financial statements, bank guarantees, twenty-year performance warranties, local service, and spare parts availability. An entrepreneur who checks only the price per megawatt-hour is checking the parameter that will be forgotten first.

Disclosure: The author is a manager at HyperStrong, which was founded in 2011 and went public on the Shanghai Stock Exchange (688411) in January 2025. Its audited reports for 2025 show revenues of 11.6 billion yuan (a 40% increase), a net profit of 951 million yuan (a 47% increase), and more than 60 gigawatt-hours installed in more than 400 projects. These are the data that an entrepreneur should demand from every supplier, and their absence is a warning sign. One of the smartest decisions I encounter among experienced entrepreneurs is not to be dependent on a single supplier, and no less importantly, to check who is facing them in the field.

From working on both sides of these transactions, I have learned to distinguish between a company that sells equipment and a company that accompanies it: a local and certified team that is present at the project from characterization to commissioning and knows how to diagnose and repair by itself, is what protects the revenue stream throughout the years of operation. Storage systems are becoming a target for cyberattacks. Attacks are no longer a scenario: according to a report in the Telegraph, hackers linked to Iran disabled a small power station in the UK for four days at the end of July, for the first time there. A study by Forescout illustrates how thin the margins are: control over less than 2% of the installed solar capacity in Europe is enough to lower the grid frequency to the threshold that requires proactive disconnection of consumers.

At the end of December 2025, dozens of renewable energy sites were attacked in Poland: production continued, but communication with system managers was disrupted. In a storage facility, the control layer is also the safety layer. In Israel, regulation already recognizes the risk: standards require manufacturers connected to a common control center to comply with the Ministry of Energy's cyber defense guidelines. Continuous monitoring and anomaly detection using artificial intelligence have turned from a marketing advantage into a threshold requirement. And Israeli operational knowledge is an export product. The Israeli industry deserves a good word here: entrepreneurs, EPC contractors, and engineering teams that grew up in a small and demanding market are creating operational practices that even much larger markets are adopting. The dispersion of small sites and the shortage of technical hands have grown here at an early stage a model where one engineer from one control center monitors and operates dozens of sites remotely, a model that teams in Europe are only now adopting. I also work with other markets, and I know this is not taken for granted.

This culling will benefit the market: less dispersion, and more capital that will flow to suppliers who will stand behind their warranties even a decade from now. The winners of this period will be the entrepreneurs who choose partners with a proven track record today: in the balance sheet, in the field, and on the monitoring screen.

Zvi Ben David is the President of HyperStrong Israel and Vice President of HyperStrong International.