Abstract: With the proposal of double carbon targets and the construction of new power system in China, large-scale new energy grid integration poses new challenges to the consumption of renewable energy and the stability of power system. Energy storage, as a key technology, has also developed vigorously in recent years. However, at present, China’s energy storage industry is still facing many problems. This paper introduces the current situation of China’s energy storage industry development and market construction and analyzes many obstacles faced by China’s energy storage development such as relatively weak economy, unsound management rules, imperfect market transaction mechanism and cost benefit distribution system. In view of the problems faced, based on the analysis of the incentive factors for China’s energy storage industry development and market participation Based on the analysis of the incentive elements for the development of China’s energy storage industry and market participation, specific incentive policy suggestions are put forward from tax subsidy, regulatory policy, market construction and financing mechanism to promote the long-term development of China’s energy storage industry and help achieve China's dual carbon goals smoothly.