The ever-growing market, the right technology and profitable business cases for the energy transition.
Introduction
In order to adapt to the changing environment, PV manufacturers are striving to meet the demands of the residential and architectural sectors by expanding their range of Building Integrated PV (BIPV). Such offer brings multiple benefits to the investors and end-customers while, on the one hand side, the basic idea of electricity generation is guaranteed but, on the other hand, the PV equipment serves the functionality of the construction materials (i.e. insulation or water protection) which, in this case, are not required anymore. The PV equipment also becomes the carrier of aesthetic value therefore it targets the great vulnerability of the modern PV systems – the lack of aesthetic appeal.
Unlike the traditional PV market, the BIPV segment is neither homogeneous nor clearly defined, so classifications are often adapted according to the technologies used, potential applications or key features. Ventilated (cold façade) is an area with possibly the greatest number of up-to-date applications. The BIPV façade consists of a load-bearing substructure, an air gap and a cladding. The components are integrated into the wall in the same way as the traditional building cladding allowing ventilation during the hot months so that excess heat is dissipated. Conversely, prefabricated products are multi-functional elements installed both on the façade and on the roof. They are pre-assembled and consist of an external PV layer, a protective layer, and a mounting structure. The product range is broad and could be more customized based on project requirements.
Market outlook
The dynamic growth of the worldwide PV capacities became a fixed feature of the global energy transition. The substantial proportion of the new systems would be installed in the residential and commercial segments which are correlated with the developments on the construction market, in general. Regionally, Europe and the USA stand for around 70% of the worldwide BIPV shipments and, most probably, that proportion won’t change anytime soon since both areas are expected to lead the BIPV trend in the near future. In other areas such as China and Japan, investment growth will be slower, but they will still represent attractive markets. It is estimated that more than 40% of façade surfaces in Europe would meet solar suitability criteria. Just pointing at the most robust PV markets in Europe, Germany’s solar facades’ potential is assessed for around 340km2, Italy’s for 200km2, Spain for around 150km2, and the Netherlands for 64km2. Undoubtedly, the market is vast with the few specialized companies taking advantage of business opportunities. In addition, it is estimated that buildings are responsible for about 40% of total emissions, particularly when the housing stock is relatively old. Taking EU as an example, on average, buildings constructed before 1945 account for almost 22% of the total, those constructed before 1969 represent 46%, while 76% of total stock was built prior to 1990. To improve average energy efficiency, buildings of older construction technologies must be modernized. Otherwise, without investment to improve their energy performance, the EU will have trouble achieving its transition targets. Given this, to boost investment (and ignite the market) many countries have introduced generous subsidies and offered general renovation plans to support (BI)PV systems. Most importantly, the European Directive 2010/31/EU establishes that starting from the end of 2020, all existing and new buildings will fulfil the conditions of the nearly zero-energy buildings (nearly ZEBs). The “nearly ZEB” refers to a building that has a very low yearly energy consumption, which can be achieved with renewable energy sources.
As far as PV is concerned, due to the space limitations, and concerns in regards to aesthetic, the BIPV façade might be often the single valid solution so the accelerated market growth is expected. The significant heterogeneity of the offers and the lack of clear understanding of the concept of BIPV façade, make it difficult to deliver accurate forecasts of the market. Nevertheless, it would be possible to provide estimates of the market size of a few billion US dollars already reached in 2025 and the CAGR of about 20-25%. In relative terms, the BIPV facade market will account for approximately 60% of the value of the BIPV roof market. Such growth could possibly guarantee a stable investment environment with a plethora of businesses to undertake. Taking into account the real exponential growth of the PV segment, these forecasts are characterized by the great dose of certainty, even moderation.
Technology
From a technological point of view, with the growing presence of the BIPV facade, the market will see the progressive diversification of the underlying components of the solar cell. The predominant role of the mainstream c-Si is no longer assumed, with the portion of the thin layer estimated to be more than 50%. Apart from the apparent aesthetic advantage, customers could also name other factors that contribute to the relative strength of thin film. Firstly, the low sensitivity to non-optimal orientations and the low shadow effect help to minimize losses and widen the scope of potential investments through better adaptability to building designs. Secondly, the relatively low temperature factor allows systems with limited ventilation, including curtail walls. Furthermore, the highly expected customization of modules is easier to obtain at a lower cost. For high-end markets, homogeneous semi-transparent thin cells represent the single proven option to visually compete with the basic glass. Possibly, in the near future, the new materials, here, including the organic cells and perovskites should gradually gain ground, especially due to their simplicity of applications, lightweight and relatively fair price levels. However, to be embraced by the markets, the emerging technologies would need to comply with PV/BIPV standards and that is not an easy task, even for the products based on the mature cell technologies.
Economic benefits
Regardless the base technology, the BIPV façade’s primary goal is to replace the traditional façade materials therefore the BIPV materials should relate to the current construction market requirements, also in terms of the pricing. Although, according to the industry and scientific sources, the cost of the BIPV façade equipment is still high in respect to the traditional materials, the comparisons do not necessarily lead to the simple conclusions. The market is not homogenous and product’s specifications might vary across the categories. Cost-wise, the customers of the metal, ceramic, or stone façade could be already potentially interested in considering the BIPV options, including the sleek and appealing printed solutions imitating the natural elements.
In most cases, BIPV systems’ cost may exceed the cost of the conventional facade so the investor may want to derive the difference from other cash flows. As for the conventional façade, the cash-flow is only negative, and the idea of the façade that generates the income is actually not easy to grasp by the construction project developers. Naturally, electricity generation represents the main source of value that should cover the additional expenses on the photovoltaic functionality. Its magnitude depends largely on the technological characteristics of the components used, the geographical location with system orientation, and the electricity prices that serve as a multiplier of the generated yields. After the scientific literature and case studies data, customers are able to be provided with the generation estimates and these could reach even 65-70% in relation to the systems designed optimally. Only the quality of the components and the design of the system remain under the control of the investor interested in the maximization of profits. Eterbright Solar Corporation’s is ready to help during the PV system design, simulation, and equipment manufacturing to find the valid solutions.
In addition to core return cash flows, BIPV investors could often expect other less explicit benefits. Increased self-sufficiency makes it possible to reduce electricity delivery costs and transmission losses. Moreover, in an era of growing interest in energy storage, BIPV could have a substantial impact on the dimensioning of batteries, which means optimizing their costs. The generation profile tends to flatten out for façades, which is desirable under the specific tariff provisions, and then the facade could actually provide higher benefits than the installation of the roof. In Europe, the electrical profile is peaked at midday for the roof and the south façade. From the east and west façades, the maximum power is reached before and afternoon, respectively. Throughout the year, in spring and summer, production is higher for the roof, whereas in the fall and winter, production is higher for the south facade. Further, an environmental perspective, the CIGS BIPV targets carbon emissions with a substantial reduction from more than 400 gCO2eq/kWh (EU average) to only about 20 gCO2eq/kWh (typical to thin film). Given that, within the façade lifecycle of minimum 25 years, the total avoided emission could reach tons of CO2, which are, in the latter stage, subjected to the carbon tax of a specified value. Finally, other sources of revenue are not eliminated, including advertising space that could be accommodated through custom printing on the solar modules.
From an investor's perspective, it is essential to obtain at least approximate estimates of potential gains, including NPV, IRR or recapture periods. While these vary by location, equipment used and calculation methodology, we are still able to provide results based on scientific literature, or case studies. To picture the general idea, we could quote the data of University of Stavanger in Norway revealing that, with the 0% of discount rate and cost of 450euro/m2, the BIPV façade system could refund all the investment (including north-facing part) which is certainly not achievable for the traditional building envelope materials. With a 5% discount rate, the average payback periods (for a number of EU countries) were 6 years (south), 13 years (east), 12 years (west) and 30 years (north). When it comes to internal rates of return, values are also attractive: over 25% (south), about 15% (east and west) and 0% (north). The results may of course vary for the southern and northern states, since local irradiation and electricity prices have a considerable impact on inflows. Nonetheless, both northern and southern countries ensure the feasibility of projects with exceptional profitability in Belgium, Cyprus, Denmark, Germany, Greece, Ireland, Italy, Portugal and Spain. Once the analysis becomes more detailed when it comes to societal and environmental factors, investment measures reach particularly high levels. Similar results have been well documented in other case studies indicating the true economic value to investors derived from the redefinition of the commercial facade model.
Future developments - issues to address
Technology advances serves the expanding market in the development of the economically valid projects. However, seizing the opportunity requires addressing potential challenges. They are mostly identified at the periphery of the solar and construction industries with the main issues related to: product customization, product certification and system installation. Perhaps the biggest impediment to the widespread adoption of BIPV is the lack of effective and complex communication between solar energy producers and builders. Aware of this, Eterbright Solar Corporation is dedicated to work with investors, architects and developers to find the right solutions, also through research and development programs. Our sophisticated machinery base enables us to evaluate ambitious projects to better serve our potential customers and the ongoing energy transition.
References
Corti, P., Bonomo, P., Frontini, F., Macé, P., Bosch, E. (2020) Building Integrated Photovoltaics: a practical handbook for solar building’s stakeholders. SUPSI/Becquerel Institute, Switzerland.
European Commission (2018) Improving energy and resource efficiency, European Construction Sector Observatory, November 2018.
European Parliament and The Council of European Union (2010), Directive 2010/31/EU on the energy performance of buildings. Official Journal of the European Union, 153.
Gammal, A.E., Mueller, D., Buerkstuemmer, H., Vignal, R., Macé, P. (2016) Technical Evaluation of BIPV Power Generation Potential in EU-28. 32nd European Photovoltaic Solar Energy Conference and Exhibition, Munich.
Gholami, H., Rostvik, H.N. (2020) Economic analysis of BIPV systems as a building envelope material for building skins in Europe. Energy, 204, 117931.
Grand View Research (2020) Building Integrated Photovoltaics Market Report, Grand View Research, India.
Moro, A., Lonza, L. (2018) Electricity carbon intensity in European Members State: Impacts on GHG emissions on of electric vehicles. Transportation Research Part D: Transport and Environment, 64, 5-14.
PVSites (2016), BIPV Market and Stakeholders Analysis and Needs, October 2016.