The cost of photovoltaics has continued to drop for a long time, and now they’re reaching a point where their costs will soon be a lower overall part of utility-scale than the balance-of-system (BOS) costs, according to a new report from GTM Research.
While the change is a significant achievement for the photovoltaic manufacturing industry, it shows that other sectors of the solar industry have been lagging in their efforts to reduce costs.
“As module costs and inverter costs begin to decline more slowly, you’re going to see a lot more attention paid to BOS costs,” said GTM Research Managing Director of Solar Research Shayle Kann.
BOS includes a wide range of costs from mounting equipment, to the soft costs, like engineering, permitting and lawyers’ fees. The costs also include construction, as well as cables, engineering and combiner boxes.
“In 2010, BOS costs accounted for approximately 44.8 percent (US$1.43 per watt) of a typical, utility-scale crystalline silicon (c-Si) project, with that percentage forecasted to increase to 50.6 percent in 2012. This economic shift is driving industry attention beyond the module toward achieving economic gains for key BOS components and services, including mounting structures, foundations, labor, civil works, cables, engineering and combiner boxes,” according to a GTM Research press release about the report Solar PV Balance of System (BOS): Technologies and Markets.
This report is focused on BOS costs for utility-scale projects, Kann said. The BOS costs have outweighed module costs in the residential sector for a while.
“It has a lot to do with the soft costs there,” he said. Those costs are related to things like permitting, legal and financing.
While the modules themselves will continue to cost more than the individual BOS components, BOS costs will also come down with industry consolidation and as more providers enter into the market, Kann said.
“A mixture of things makes it harder to eke costs out of the balance of system costs,” he said.
For instance, a lot of costs for ground-mount systems are in the commodity costs of things like steel, according to Kann.
“There’s only so much you can do, but there hasn’t been much attention to it,” he said.
“Mounting structures are an access point for both BOS cost reductions and business opportunity,” report author Manhal Aboudi said in a press release. “Larger companies such as SAPA, Gestamp Solar, Hilti and Cooper B-Line are now diversifying their product lines to better serve the global market and thereby reduce costs through scale as well as capture a larger piece of the mounting structure market.”
Image courtesy of GTM Research.