Pressures to drive down costs will push many balance of system (BOS) manufacturers “to the edge” and ultimately result in a less crowded market, according to new research.
A report by GTM Research said that with BOS technologies being targeted over PV modules to deliver the next round of cost reductions for solar, the market will become increasingly tough for many players.
In 2008 PV modules accounted for 67% of the average cost of a solar project. But, because of improvements in cell and module technologies, it is now BOS costs that are seen as problematic, accounting for 68% of a project’s costs, the report said. As a result BOS manufacturers around the world are being squeezed, the report warned.
“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.
Stephen Smith of consultancy Solvida Energy Group and the report’s lead author, added: “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.
Smith said the report was “bullish” about the prospect of the BOS industry’s capability to deliver on its cost reduction promises.
But the report said that the process would not be easy, requiring manufacturers to balance innovation with surety for customers, at the same time as minimising costs.