Average Global PV System Costs To Drop 40% Thanks To Balance Of Systems Innovation
A new report from GTM Research has concluded that the average global PV system installed costs will drop a phenomenal 40% by 2020 thanks to balance of systems innovations.
The new report, PV Balance of Systems 2015: Technology Trends and Markets in the U.S. and Abroad, concludes that the average global PV system installed cost will fall from $2.16 per watt in 2014 to $1.24 per watt by 2020, a 40% decline, thanks to a variety of balance of systems innovations.
GTM Research notes that PV module costs between 2007 and 2014 decreased much faster than PV balance of systems costs — those costs that make up near-everything but the photovoltaic panels themselves. According to the report’s findings, blended average module pricing dropped 79% between 2007 and 2014, whereas balance of system costs averaged anywhere between 39% and 64% drops, depending on market sector and region.
This is an incredibly important aspect to the continuing growth of the solar industry today, considering that, for an average US residential solar PV system, the balance of systems costs account for 77% of the total installed costs — keeping these costs down, and trending down, is vital for solar to continue to penetrate new markets.
Nevertheless, and though it will still vary region by region, the report’s authors believe that “a combination of balance of systems innovations will drive cost reductions across the board and ultimately fuel the global solar market to move well past 100 GW by 2020.”
“While declining module costs remain important, innovations in PV power electronics, structural hardware, installation processes, and the integration of PV systems as a whole will be the primary push toward more economically competitive solar in the wake of waning global incentives,” explains MJ Shiao, author of the report.
Global Installed Capacity and Average PV System Installed Costs, 2013-2020E
“In the solar market of the future, the PV industry can no longer depend on a silver bullet to reduce total system costs. Rather, vendors and installers must look toward the combination of several technology, system design and process improvements to drive increased PV performance at decreased costs. While new concepts like rail-free racking or 1,500 Vdc grab the most attention, mundane improvements such as reduced structural foundations or installation-labor compensation strategies are also important considerations for cost reduction.”
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