In a medium saucepan over medium-high heat, use a wooden spoon to combine tomato sauce, vinegar, molasses, peach preserves, ketchup, garlic powder, salt, chili powder, onion and chopped peaches. Stir frequently, bring mixture to a boil and reduce to a simmer for about 15 minutes until the fruit is tender. Using an immersion blender, blend the sauce until smooth. Return sauce to a simmer and reduce for another 15 minutes until thickened.
Preheat grill or grill pan over medium-high heat. Season the chicken with olive oil, salt, pepper and onion powder.
Grill the chicken for 7 minutes per side, baste with peach BBQ sauce and cook for an additional 2 minutes per side, until the chicken is crispy and sticky and a thermometer placed into the thickest part of the chicken reads 165 degrees.
Serve with more BBQ sauce, coleslaw, baked beans, corn on the cob and watermelon.