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Estimating the Learning Curve of Solar PV Balance-of-Systems for Over 20 Countries

About the Project

Although the costs of solar modules have fallen precipitously and have, thus far, followed an 80% learning curve, balance-of-system (BOS) costs have not declined at the same rate. Today, the BOS represents the majority of the capital costs for solar installations. The growing share of BOS in the total cost of solar systems has direct implications on its competitiveness.

For the first time, and with the aid of an extensive dataset, learning curves of the BOS component for residential systems have been deduced for over 20 countries. In addition to computing a global average for BOS learning at 89%, this modeling exercise showed that there are a number of cost reduction opportunities that exist in the BOS segment, and these require no (or little) financial policy support.

Key Points

The capital cost of a solar photovoltaic (PV) system comprises the module and balance-of-systems (BOS). The latter refers to everything else that is needed to make the solar system functional including cables, mounts, labor, etc. While modules are priced internationally, the BOS is countryspecific. Price developments of modules, which have been thoroughly studied in literature, followed an 80 percent learning

The LC for BOS in residential PV systems is estimated for more than 20 countries via an extensive dataset. We show that the BOS LCs for these countries are typically lower than that of modules, affirming the few single-country studies reported previously.

Our calculations yielded a global LC for the BOS of 89 percent, which corresponds to a progress ratio of 11 percent compared with 20 percent for modules.

The data was then divided into two periods – pre- and post-2008 – to study the effects of the global financial crisis on LC development. It was found that many countries were able to sustain progress in the LC post-2008 despite reduced financial policy support, indicating that there are effective steps that could be taken by policymakers to reduce BOS costs without requiring (significant) financial policy support.

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