The PV Balance of System (BOS) market is set to experience varying levels of decline across a number of regions over the coming years with Asia Pacific (APAC) depreciating the most, according to research and consulting firm GlobalData.
Asia-Pacific market is set to depreciate from $27.4 billion in 2015 to $14.2 billion by 2020, the report said. .
This decline, which represents a negative Compound Annual Growth Rate (CAGR) of 12.3 percent, will be primarily due to the continuing decrease in solar PV BOS costs.
BOS refers to all of the components of a solar PV system, excluding the modules. The hardware components of BOS include inverters and structures, as well as cabling and transmission equipment.
Despite its significant decline, the APAC market will still maintain its position as the largest region. Its share of the global BOS market is expected to decline from 57 percent in 2015 to 45 percent in 2020. This is due to the relative increasing strength of the BOS market in the Americas, with its market share expected to increase from 25 percent in 2015 to 41 percent in 2020.
Prabhanjan Kumar Singh, GlobalData’s Analyst covering Power, says, “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.”
“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,” Singh added.
The BOS cost fell from $1.96 per Watt (W) in 2010 to $0.98 per W in 2015, and with further standardization expected in the structure-manufacturing industry and in installation procedures, GlobalData expects this cost to decrease further to approximately $0.5 per W by 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, according to Singh.
However, beyond 2017, a gradual fall is expected in market size, due to falling BOS costs and the slow increase in annual capacity additions, Singh said.
Rajani Baburajan