Guoxin Securities·2025-07-06 13:38Investment Rating - The investment rating for the electric equipment and renewable energy industry is "Outperform the Market" (maintained) [1]. Core Insights - The "Inflation Reduction Act" in the U.S. has strengthened policies for grid and energy storage, extending the tax credit timeline for energy storage from 2032 to 2036, which may lead to increased shipment volumes from the Chinese supply chain within the year [1]. - The Guangdong offshore wind power project at Sanshan Island is progressing, with the engineering survey design candidate announcement for the China Resources Yangjiang Sanshan Island offshore wind farm project [1]. Summary by Sections Energy Storage and Grid - The "Inflation Reduction Act" signed by President Trump on July 4th includes a $1 billion allocation for grid reliability construction, energy storage for power generation facilities, and transmission infrastructure upgrades, focusing on long-duration energy storage technology demonstration projects and microgrid storage systems in remote areas [3]. - The tax credit for energy storage has been extended to 2036, with a phased reduction policy. Projects starting construction by the end of 2033 will receive a 100% credit, reducing to 75% in 2034, 50% in 2035, and ceasing after 2036, providing a longer policy support window [3]. Supply Chain and Market Dynamics - The act stipulates that energy storage projects starting construction after December 31, 2025, involving certain foreign entities will not qualify for investment tax credits (ITC) and production tax credits (PTC). This includes entities from China and specific battery manufacturers [4]. - There may be a short-term increase in shipment volumes from Chinese energy storage companies before the end of 2025 due to the new regulations [4]. Market Projections - The U.S. Energy Information Administration (EIA) projects a 78% increase in large-scale energy storage installations in the U.S. by 2025, with an expected total of 18.55 GW for the year [5]. Investment Recommendations - For electric equipment, it is recommended to focus on companies with domestic production capabilities in the U.S. that can participate in grid reliability construction, including Jinpan Technology and Igor [2][10]. - For offshore wind power, companies such as Dongfang Electric, Dongfang Cable, and Times New Material are suggested for investment [2][11].