REPORT SCOPE
INTRODUCTION
The world of building-integrated photovoltaics can be somewhat of a surprise on the order of first learning that the walls and floors of one’s own house are populated with conductive wire, conduit and pipe. The sheer number of buildings, for all purposes, can be enumerated in the billions in the aggregate worldwide.
That many buildings cover a tremendous area of land. Utility-scale PV arrays in deserts and brownfields are one way to drive a gigawatts-scale solar industry, but these types of projects are hitting the same transmission/distribution walls that wind farms hit two decades ago. Thus, the built-environment real estate is an attractive niche that allows for mass manufacturing without the concomitant challenges that occur when all the eggs must fit into a few baskets.
Buildings and neighborhoods have characters all their own that BIPV must fit into. The attractiveness of a BIPV capacity has several facets:
- Energy consumed on-site
- Little transmission loss
- No land requirement
- Use of building to get the PV material off the ground
- Architectural design element
- Green is built into the building
- Modern, ecological statement by the building
- Reduction in need for other building materials
- PV material is protected, no fences needed.
The world market for photovoltaics (PV) entered a period of sustained double-digit growth in the 21st century. This growth has been driven by an accelerating expansion in production quantities of all components, and, for the most part, an erratic, concomitant slow decline in price at many points of the value chain (U.S. Bureau of Economic Analysis 2009).
The trend toward lower prices in the market is being strongly encouraged by the entry of many, some of which are very large Chinese manufacturers into the PV industry and a growing reluctance of governments, with a few notable exemptions, to continue to legislate large financial incentives for PV installations or require their citizens to shoulder the burden.
A dominant characteristic of the market for PV products is that every price decline opens new market niches. A second factor that leads to new sales sectors is that new technologies lead to new applications of PV technologies. The combination of lower costs and an expanding underexploited niche are major factors in the imminent, long-expected explosive growth of a very large and diverse set of applications: building-integrated photovoltaics (BIPV).
BIPV is a means to shift some core cost centers of the value chain to outside industries, and to expand the industry onto vast numbers of ready-made bases: buildings. It removes some of the expenses from the PV product, allowing the labor and some of the substrate material, to lesser or greater degrees depending on product. The levelized cost of energy (LCOE) is thus reduced and building materials companies have a premium product they can vend.
The ability to offer a premium product is a welcome attribute. It is a time when the world building construction and renovation industries are experiencing the worst market conditions in a century. Some growth continues in the Pacific Rim, SE Asia, India, and Brazil. In other places building projects rely on long-term contracts and the economic momentum of the shear size of the developed world economies.
In these tightened market conditions, the ability of PV manufacturers to produce mass capacities of solar materials to bring down manufacturing costs is paramount to be competitive, to survive. The PV world is maturing as the price of capacity approaches grid parity. However, to succeed in the BIPV universe, one long anticipated to be a multibillion-dollar annual set of market segments, costs meet with concepts of compatibility with national economies, building structure, aesthetics, and public support systems.
This market research report from BCC Research characterizes and quantifies significant world BIPV markets, legislative, regulatory, political and economic forces driving those markets, identifies present and emerging technologies, suppliers, and market strategies, and quantifies the markets for BIPV technologies on world and regional bases.
STUDY GOALS AND OBJECTIVES
This report furnishes a world guidebook for near- to mid-term development and opportunities for building integrated photovoltaic (BIPV) products and, by default, their potential building component manufacturing partners in those very financially substantial construction industry niches. The study was performed to locate, characterize and quantify the range of BIPV markets for various types of roofing, building facades, glazing, sunshading, skylighting, architectural fabrics, and shutters that incorporate a solar power production medium.
Not all PV products are suitable for every BIPV application. The report identifies and substantiates the reasoning for uses of particular PV technologies in a specific BIPV market segments. The investigation covers crystalline (c-Si) and polycrystalline silicon (poly-Si), amorphous silicon (a-Si), cadmium telluride (CdTe), copper indium (gallium) diselenide (CIGS or CIS), organic dye stabilized titanium oxide PV materials (dye solar cell: “DSC”), and plastic solar cells (OPV). Where appropriate, generating capacity contributions to the total PV capacity that will ship into each BIPV niche are projected, along with the revenue to the PV manufacturer.
But even innocuous power generation technologies such as PV do not get installed in a vacuum. This report endeavors to provide an insight to the different national and international approaches that are being taken to subsidize the continued expansion of the PV industry, the legal and regulatory regimes that define requirements for the physical behavior and appearance of BIPV products, and shows how BIPV products must satisfy building component-related regulatory specifications in the various markets in which they will function.
Finally, the extent to which strategic partnerships with building component manufacturers, contractors, developers, and architectural firms underpin the ability of PV manufacturers to enter into the trillion dollar building construction market is assessed. An analysis is also made of the economics of such entry, as well as the impacts of the deep economic recession that has affected much of the world while 75% of world PV production now occurs in China and Taiwan.
The PV industry, however, is truly high technology. The new wave of so-called third-generation PV products will have capabilities that allow them to be used in ways that were previously not possible. The report shows that thin film products will have several BIPV market segments to themselves and, as premium products, will also take some market share from c-Si and poly-Si. Light weight, flexibility, adequate operational efficiency, and color options are proving to be strong new capabilities that will find markets when the product is right and there is enough of it.
REASONS FOR DOING THE STUDY
The photovoltaics (PV) industry is making the transition from an expensive renewable technology to becoming a major factor in the world energy supply. Annual market value of installed product is now measured in the tens of billions of dollars (U.S.) annually, and the trend remains upward, despite an unsteady world economy.
Costs have been significantly reduced, multiple gigawatt-scale factories are now churning out solar cells and sheets, and product reliability, for the most established technologies and companies has made impressive strides.
The practice of building bulk power plants with PV modules is now a regular occurrence in many countries. Similarly, there is a broad-based business in adding PV capacity to residential, commercial and institutional buildings. This latter, building-related application of PV technology, i.e., “behind the meter,” is the highest-value application for PV, at least for grid-connected applications. Power is always produced at the peak of the day when prices are highest and delivery of power from distant sources would otherwise be needed.
One would anticipate that building-integrated photovoltaics (BIPV) have a natural economic edge. Instead of building all external components of a building, then adding PV capacity, it would seem inevitable that the inclusion of generating capacity as part of building components would make the combination of the two lower-cost than the two added individually. It hasn’t happened yet, for various reasons. Chief among them is the downturn in building construction. Just as many new products are ready for entry into the substantially-sized BIPV market niches, the construction market contracted mightily.
This is a temporary phenomenon. It occurred with greater severity in the developed world and in 2010, a slow turnaround began. China and India, on the other hand, have started on a course of building construction that will surpass all that has come before. It is an overdue manifestation of decades of redistribution of wealth, combined with a gnawing need for new energy infrastructure in regions where sufficient infrastructure has long been absent. Still, the world economies, particularly in the U.S. and Europe, are so large that even in the deepest part of the economic pullback, construction and renovation projects remained at levels that are the envy of most of the world.
All of this activity, whether publicly or privately funded, generates opportunities for new PV capacity to enter the market on a mass scale as part of the construction, rather than the energy market.
SCOPE OF REPORT
This report identifies commercial and near-commercial BIPV technologies, the manufacturers, and partner building component product manufacturers. The present- to mid-term markets for each type of BIPV application are characterized and quantified in terms of capacity (MW) for the installed product, revenue to the PV manufacturers, and capacity breakdown by PV technology. Projections are made of the market value (or at least regional price) of the wholesale value of the PV component of the installed products.
Where the world market has grown sufficiently for a particular BIPV “niche,” country and regional breakdowns are provided by geographic region and country. Much of this depends on the type of building component used in a particular region or country, and whether a suitable BIPV product has been developed, tested in the field, certified for installation, and brought up to production levels that can satisfy market demand.
The various BIPV niche markets are examined in terms of type of exterior building component class, PV technology offerings, geographic region, generating capacity, and revenue to the manufacturer. Additional characterizations are made of the market structures, quantities and relative strengths of adjunct product manufacturers, such as metal, composite, tile and TPO roofing companies, window glass and window manufacturers, and vendors, designers and installers of architectural fabrics and building cladding (weather envelopes). Smaller market opportunities such as skylighting, sunshading and shutters are also investigated.
The market structure discussion includes consideration of the forces shaping the markets, and successful strategies the early entrants into the market are making. This report also investigates national and regional public financial incentive strategies and regulatory regimes that help or hinder the development of each BIPV market segment. The way in which each type of PV technology fits (or doesn’t) into a given BIPV niche is examined. The coverage extends to c-Si, poly-Si, a-Si, CdTe, DSC, and OPV products.
METHODOLOGY
BIPV markets are examined by in terms of building component markets and PV technologies as adapted to become part of a number of building component market segments. World market values are assessed in terms of aggregates of market by geographic region, where appropriate. The market growth rates of individual BIPV segments are projected using statistical data from governments, trade journals, news items, corporate SEC filings, interviews with manufacturers and scientists, notes from field visits, scientific research reports, financial analysis, laws and regulations promulgated in on every continent, statements by public officials and building component manufacturers. Additional characterizations are made of the market structures, quantities and relative strengths of adjunct product manufacturers, such as metal, composite tile and membrane roofing companies, glazing manufacturers, vendors, designers and installers of architectural fabrics, building weather envelopes, skylighting, sunshading, and shutters.
Numerous contact points are provided building component manufacturers and building project developers who would have an interest in including a premium product such as BIPV capability into their portfolio of options. Various rationales for their doing so are investigated.
Present levels of government support systems are considered in terms of their impacts on the overall market for PV capacity and potential for enhancing (or limiting) BIPV market expansion. An attempt is made to clarify the subtleties of the various government support policies and incentives that encourage or limit the growth of BIPV market niches. Political motivations for continuance or reductions in PV support levels are considered, noting the balance being negotiated between the PV industry as an employer of a growing number of personnel balanced against governments facing pressure to reduce their budgets because taxation pays for government, not for the taxpaying populace.
INTENDED AUDIENCE
This BIPV market report is useful for manufacturers of all photovoltaic (PV) systems, including rigid and flexible modules, cells, encapsulants, crystalline and polycrystalline materials and thin films. Additionally, the report is of interest to PV production planning and marketing executives, balance of system component manufacturers and vendors, product planners and engineers, architecture firms, behind-the-meter project developers, financiers and investors, regulatory policy developers and enforcers, building component manufacturers, marketers and installers, balance of systems component suppliers, electrical and construction trade unions, educational institutions, real estate developers and owners, legislators, market analysts, utilities and construction industry professional associations. There is also material of interest to manufacturers of glass, membrane, tile and standing metal seam roofing materials, sunshade louvers, architectural fabrics, window frames, marble and metal building cladding, and roofing shingles and tile manufacturers.
INFORMATION SOURCES
The material in this report is a distillation and analysis of data and information from primary and secondary sources, as well as from various BCC and personal databases and models built up over a decade. Primary sources include telephone and face-to-face interviews with executives in PV companies, building components manufacturing, marketing and sales organizations, building products manufacturing associations, architects, project developers, venture capitalists, banking executives, journalists from trade publications, and PV project installation company representatives, scientists working on new PV technologies, government officials (federal elected officials and local permitting and local planning board managers). Secondary sources include trade conference proceedings and presentations, SEC filings, PV product brochures, trade publications for the PV industry and various building construction, equipment rental, and commercial and residential project development industrial sectors. Attention was also given to published articulations of national PV generating capacity goals, scientific literature examining the prospects and physical characteristics of the various PV technologies of interest in this report, publicly available statistics on methods and market progress for BIPV activities, and national and regional incentives that encourage or discourage expansion of the market for BIPV generating capacity.
ANALYST CREDENTIALS
Michael Kujawa has authored market research reports covering a wide gamut of renewable energy technologies, including topics such as bulk power installations of photovoltaics, large wind turbines, small hydro, biogas, geothermal and ocean energy conversion systems. He has also covered world markets for stationary and transportation fuel cells, cogeneration equipment, building management systems, distributed generation, and U.S. markets for power production machinery in a deregulated power industry. Mr. Kujawa has co-founded several companies engaged in the development of clean energy technologies, onshore and offshore wind projects and multi-megawatt solar parks.
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DISCLAIMER
The information developed in this report is intended to be as reliable as possible at the time of publication and of a professional nature. This information does not constitute managerial, legal, or accounting advice; nor should it serve as a corporate policy guide, laboratory manual, or an endorsement of any product, as much of the information is speculative in nature. The authors assume no responsibility for any loss or damage that might result from reliance on the reported information or its use.
