Starting points may be different for solar and BESS, but the strategic challenges are converging. Manufacturing scale remains important, but hardware alone is becoming less of a competitive differentiator. With margins already under pressure, the window to reposition is narrowing. The question becomes, where can manufacturers capture value beyond equipment?

Since 2015, total installed solar capacity has increased around 13-fold, from 220 GW to 2.7 TW in 2026, while BESS capacity has grown more than 200-fold, from 2.2 GW in 2015 to around 470 GW in 2026. By 2035, cumulative capacity is on track to exceed 8 TW for solar and 2.4 TW for BESS.

Solar is already deep into an oversupply cycle. Global module manufacturing capacity exceeded 1.1 TW in 2025, nearly twice annual demand. Tier-1 PV module manufacturers responded by cutting production, with average utilization rates falling from 75% in 2023 to around 60% in 2026. Lower utilization increased unit costs just as intense price competition eroded margins. Slower Chinese demand in 2026 has added further pressure.

BESS manufacturing, on the other hand, is still in a strong growth phase. Deployment is growing rapidly, supported by falling costs, grid reliability needs, renewables integration and emerging AI data center demand. That growth is still absorbing new capacity entering the market. But the gap is narrowing, manufacturing capacity is expanding rapidly, particularly in China, while cells and storage hardware are already facing stronger price competition. BESS is not yet where solar is today, but some of the same pressures are emerging.

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