Asia Pacific Solar PV Balance-of-System Market To Decline Significantly By 2020

The Asia Pacific solar PV Balance of System (BoS) market is expected to decline significantly over the next few years.

These are the latest figures out of a new report from research and consulting firm GlobalData, published this week, investigating the global solar PV BoS market. The report found that the solar PV BoS market is set to decrease across several regions due to continuing decreases in solar PV BoS costs, but the Asia Pacific region will see the largest decline.

By 2020, GlobalData believes that the global solar PV BoS market will drop from a market worth $27.4 billion in 2015 to only $14.2 billion.

Balance of System accounts for essentially every facet of solar PV projects excluding the solar panels themselves. This can be good news for the industry as a whole, for a reduction in the Balance of System market means a reduction in solar PV costs overall. A GTM Research report from the end of 2015 predicted that global solar PV system costs will drop 40% by 2020 thanks in part to Balance of System innovations.

According to GlobalData, Balance of System costs fell from $1.96 per-W in 2010 to $0.98 per-W in 2015 — and GlobalData expects that this cost is only expected to fall further, down to $0.5 per-W by 2020, thanks to further standardization across the BoS market.

“As the solar PV market gained momentum, the optimization in component manufacturing industries led to large-scale manufacturing and reduced costs, including labor and service costs,” said Prabhanjan Kumar Singh, GlobalData’s Analyst covering Power. “Although labor rates have been increasing in several countries, with more optimization and standardization of installation procedures, the number of labor hours has been decreasing, influencing the overall BOS cost.”

The Asia Pacific BoS market will still remain the largest region, with a global share of the BoS market dropping from 57% in 2015 to 45% in 2020, losing ground to the Americas, which is expected to see its global share increase from 25% in 2015 to 41% in 2020.

“The solar PV BOS market in the Americas will reach its peak at just over $19.5 billion in 2016 and will decline steeply the following year as investment tax credits to support solar PV deployment expire in the US, which is the biggest market in this region,” Singh added. “However, beyond 2017, a gradual fall is expected in market size, due to falling BOS costs and the slow increase in annual capacity additions.”