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While photovoltaic (PV) cells and modules attract most attention from solar industry watchers, the other elements comprising a PV power plant – called the balance of systems (BOS) – have barely earned a second glance. Yet, these components account for slightly more than 50% of the cost of a total system.
BOS components generally fall into three categories:
- Mounting, which includes racking and tracking systems
- Power electronics, which includes inverters and maximum power point tracking devices; and
- Installation, which includes the engineering and design work, as well as the actual labor of putting a system in place
Although not as glamorous as active PV elements, BOS components offer a largely untapped opportunity to improve the levelized cost of electricity (LCOE) for solar installations. Presented as cost per kilowatt-hour ($/kWh), LCOE measures the total lifetime cost of a solar installation. Put another way, reducing BOS costs could bring solar technology one step closer to grid parity.
From our analysis of BOS components – detailed in our recent report, “Balance of Systems: The Next Step to Grid Parity” – we found that labor presents the biggest opportunity for reducing overall system cost reductions. Because wage rates are typically fixed, high labor costs for solar system installation have been viewed fatalistically, as a bitter pill that must be swallowed. However, this view may be misguided. By both reducing the quantity and the quality of labor hours to install a system, integrators possess the largest lever for cost reductions on the BOS side. This will require thoughtful integration of the numerous BOS components to optimize each for reduced labor costs – even if it sometimes increases component cost.
