Over the course of the past year, the solar PV balance of system (BOS) market has gained considerable attention as the next lever in driving down installed systems costs. In 2008, 67 percent of an average project’s total cost was in the PV module, but today, thanks to an industry sea change, 68 percent of total cost resides in BOS, which includes a variety of structural and electrical components, labor and soft costs.

Given this new world order, the step-function reductions needed to help solar power deliver energy at or below costs of other generation sources will come from BOS technologies and efficiencies over the next four years. As a result, BOS manufacturers around the globe are being squeezed as the market landscape becomes more crowded.

GTM Research has just published Solar PV BOS Markets: Technologies, Costs and Leading Companies, 2013-2016, a 162-page report on global BOS markets, BOS component innovation and the survivability of leading BOS players. The report includes market sizing for both structural and electrical BOS, as well as total BOS demand forecasts by market segment (residential, non-residential, utility) and major national market (Germany, Italy, Rest of Europe, China, Japan, India, Rest of Asia and the U.S.). The report also offers industry professionals value-added BOS cost roadmaps for c-Si and CdTe, fixed-tilt and axis-tracking, and residential, commercial and utility projects.

FIGURE: BOS Cost Breakdown 10 MW Fixed-Tilt Projects in U.S., c-SI vs. CdTe

Source: Solar PV BOS Markets: Technologies, Costs and Leading Companies, 2013-2016

“BOS manufacturers around the globe are being challenged to offer products at reduced prices, in addition to providing value-added benefits like professional engineering services, highly integrated components and lengthy, robust product warranties,” said MJ Shiao, the report’s co-author and a Senior Analyst at GTM Research. “Our report examines each of the BOS product segments, its key players, market forecast and potential game-changing innovations that will drive success."

However, delivering a bankable and effective product to the solar BOS market is not easy. Manufacturers must balance scaling to meet volume targets, innovating in a way that is meaningful to the market, creating surety around new, innovative products in the form of bankability and guarantees, all while driving down costs.

GTM Research finds BOS innovation challenged by regional differences in quality, labor costs, codes and standards and material availability. Scaling manufacturing in new markets has also been a risky proposition for established manufacturers, as volume is dependent on stable incentive policy and good infrastructure to allow rapid adoption of PV systems.

FIGURE: BOS Market Taxonomy

Source: Solar PV BOS Markets: Technologies, Costs and Leading Companies, 2013-2016

This report is bullish on the BOS industry’s capability to deliver on promises of cost reduction,” said Stephen Smith of Solvida Energy Group and the report’s lead author. “The advent of technology decision-making based on historic system performance is upon the industry, which will result in maximum system performance and long-term operation. The cost pressure will also push many existing BOS players to the edge, and the eventual industry landscape will be less crowded, more realistic and more grounded in actual data than marketing claims. Coupling this with diminishing solar incentives -- the anticipated reduction in BOS costs will result in a more predictable and investment-ready industry.”