Descriptive Text of Value Chain Step
In utility-scale PV construction, “balance of system” (BOS) is a term used to broadly refer to all components, equipment, structures, and services necessary to create an operational generation project, beyond the PV modules themselves (see Table DI.1). Some studies use a narrower definition when referring to BOS, focusing on inverters and hardware BOS which can be further divided into electrical BOS (e.g., inverters, wiring, fuses, conduits, circuit breakers, etc.) and structural BOS (e.g., foundations, mounting systems, racking, etc.), and excludes direct labor, permitting, logistics and other types of soft costs (SEIA 2016, NREL 2017). In the BOS step of our PV value chain, we follow the later approach and focus on inverters and structural BOS (racking, in particular), as these are the top individual cost contributors in a utility-scale PV system, other than PV modules (Figure DI.1).
Figure DI.1 Utility-Scale PV System Cost Breakdown, 2010-2017
Source: Figure 29 from NREL U.S. Solar PV System Cost Benchmark Q1 2017
Photovoltaic cells generate direct current (DC) electricity; however, most of homes are wired for alternating current (AC) and all electricity is supplied as AC in electricity transmission and distribution systems. Inverters are used to convert the DC electricity produced by solar PV modules into AC electricity ready to be fed into the transmission lines.
Central inverter, string inverter and micro-inverter are the three main inverter technologies used in PV systems. Currently, central inverters dominate the utility-scale PV market because of their higher rated power, greater efficiency, and lower cost. However, string inverters are slowly becoming popular as their cost has decreased. (IRENA 2016) Inverters typically contribute 10% of the overall solar PV system cost. Among different inverter technologies, average utility central inverter prices decreased 21% year-over-year from 2015-2016, largely driven by competition and the proliferation of less-expensive 1,500-volt inverters (Figure DI.2). Global PV inverter shipments reached a record 80 gigawatts in 2016; however, global shipments have since dropped slightly amidst uncertainty over the extension of ITC.
Figure DI.2 Inverter Pricing Trend by Technology Type
Source: Figure 2.43 from SEIA 2016 Year in Review
There are two major types of racking systems: tracking and fixed tilt. Typically, PV modules will produce the largest amount of electricity when they are directly facing the sun. PV modules and arrays can use tracking systems that move the modules to constantly face the sun, but these systems are relatively more expensive compared to stationary fixed tilt systems (Figure DI.3). However, as the price difference between fixed-tilt and tracking has narrowed (Figure DI.4), the percentage of newly built projects in the U.S. using tracking remained stable in 2017 at 72 percent (LBNL 2018). Even for thin-film projects, where historically tracking has not been an economical option, the use of tracking (655 MWAC) surpassed that of fixed-tilt in thin-film projects (260 MWAC) in 2017 (Figure DI.5).
Figure DI.3 Racking Pricing by Type, 2016
Source: Figure 2.44 from SEIA U.S. Solar 2016 Year in Review
Figure DI.4 Installed Price of Utility-Scale PV by Mounting Type
Source: Figure 10 from LBNL Utility Scale Solar Report, 2018 Edition
Figure DI.5 Utility-Scale PV Capacity by Module and Mounting Type
Source: Figure 5 from LBNL Utility Scale Solar Report, 2018 Edition
In general, the electrical BOS component manufacturing step in the value chain is largely covered by “All Other Miscellaneous Electrical Equipment and Component Manufacturing” (NAICS 335999). As reported in the 2012 Economic Census, there are 857 establishments and 28,514 employees covered under this industry, with a value of shipments of 10.4 billion dollars. However, even at their most disaggregated level (six-digit codes), NAICS codes cover a range of components, products or services that are not specific to BOS component manufacturing. Structural BOS is included in other NAICS codes related to construction equipment and materials.
Table DI.1 Utility-Scale PV Balance of Systems Categories
Source: Recreated from Table 1 in IRENA 2016, original data from IRENA Renewable Cost Database
|Racking and mounting||
|Safety and security||
|Monitoring and control||
|Mechanical installation (construction||
|Inspection (construction supervision)||