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BIPV hotspots in the EU
Feature article
BIPV hotspots in the EU THE EUROPEAN BUILDING INTEGRATED PHOTOVOLTAICS BIPV MARKET IS A NICHE MARKET WITH GREAT POTENTIAL. ALTHOUGH THE MARKET TAKES UP LESS THAN FIVE PERCENT OF THE TOTAL EUROPEAN SOLAR PHOTOVOLTAIC PV MARKET, THERE IS CONSIDERABLE INTEREST DUE TO ITS HIGH YEARONYEAR GROWTH AND THE INCREASING NUMBER OF COUNTRIES WITH SUPPORTIVE LEGISLATION FOR BIPV. AKHIL SIVANANDAN, RESEARCH ANALYST BUILDING TECHNOLOGIES AT FROST & SULLIVAN, REPORTS. Market introduction BIPV systems are defined as those that are directly integrated into the envelope of a building, serving a secondary purpose such as roof, façade or shading system. Such systems usually consist of the PV module and waterproofing elements, a PV combiner, a grid inverter and an import/export meter. The European BIPV market in 2007 was estimated to be worth €143 million with a total installed capacity of 25.7 MW for the commercial, residential, industrial and public markets combined (source: Frost & Sullivan). The bulk of revenues have come from the commercial and industrial markets. While the public market has been important in spreading the visibility of BIPV through large showcase projects, its market share has dropped by a large margin in recent years due to the high growth rates of the residential and commercial markets.
Application focus The residential sector has witnessed the highest growth becoming the largest sector for BIPV. The sudden spike in the growth rates in residential can be attributed to the rise of the French and Italian markets. These two markets have, over the past two years, implemented high feed-in tariffs for BIPV systems,
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renewable energy focus
March/April 2009
especially for small-scale systems, which have increased consumer adoption of the technology. The French market in particular has witnessed large growth rates due to a high rate of adoption in the residential sector. The Italian market has also witnessed this to a lesser degree, although it has been hindered by the slow and complicated bureaucratic process in the country. Though the penetration in the residential sector has been miniscule in most markets, greater market penetration can be achieved through correct implementation of supportive legislation, as was demonstrated by the markets of Germany and Luxembourg from the year 2000 onwards. Luxembourg now has the highest market penetration level for BIPV in Europe while Germany has, through its ongoing support for BIPV, established itself as the largest market for BIPV in Europe. The commercial sector has also started utilising BIPV more, especially in countries where there is a high level of legislative support. In particular, the office and warehouse sectors have witnessed high growth over the last few years. The commercial application of BIPV should become more mainstream after 2011, when the use of BIPV becomes more widespread and makes more sense economically as costs decrease, and as the residential sector in new
markets like Portugal, Greece, France and Italy begins to stabilise and manufacturers look to other sectors to sustain growth. The public sector will remain an important avenue into new markets. Publicly-financed showcase developments have proved their importance as testing grounds for new technologies, as well as for increasing awareness and local expertise in a region. These are the foundations for the establishment of a market for BIPV. Though there will be steady growth in the public sector, it will be much less than that of the commercial and residential sectors. The public sector’s growth in the coming years will be mainly due to showcase developments and increasing awareness among Governments about BIPV.
Geographic hotspots The factor common to all the best regions for investment in BIPV has, of course, been the level of legislative support. These regions have not been afraid to support BIPV, usually through feed-in tariffs (FiTs), although easy availability of loans, solar PV ordinances and other such supportive legislation is also important to grow and sustain the market. Manufacturers have traditionally gravitated towards such regions, while those with the capacity and a long-term perspective have
BIPV
PV manufacturers have been looking to form partnerships with architects, installers and construction companies to try to educate them about the benefits of BIPV as a building material, at the same time as reaching out to homeowners. tried to foster demand for BIPV in new markets – even when there is little or no support from the Government. In the latter case, it is usually through small-scale demonstration projects and off-grid installations, with a view to testing market demand and raising awareness. The largest market for BIPV in Europe is the German market. The country started its BIPV programme in 1999 with its 100,000 roofs programme. The guarantees of FiTs and interest free loans led to rapid development of the market, making it the largest PV market in the world by 2004. This early focus on BIPV has enabled the country to develop a high level of expertise among installers, designers, architects and manufacturers of BIPV products, as well as a high level of awareness among the end consumers. The amendments in Germany’s renewable energy act, the EEG (Erneuerbare Energien Gesetz) which ensures high feed-in tariffs for BIPV systems, especially façadeintegrated ones, has ensured that Germany will retain its place as one of the largest markets for BIPV in the world. The French BIPV market transformed itself into a hotspot for manufacturers when BIPV-specific FiTs were introduced in 2006. By the end of 2007, the French market had grown into the second largest market for BIPV in Europe, behind Germany. Meeting the high demand from the French market has been a challenge for manufacturers. As France has only recently started focusing on the BIPV sector, the market is still trying to establish a strong manufacturing and consumer base. The French BIPV market is also suffering from a lack of expertise for BIPV, especially in design and installation.
which granted very high FiTs for BIPV, and a clear cut definition for a BIPV installation. It also provided consumers with several payment options and supportive legislation for utilising the BIPV tariffs. Due to this fact, the market has grown rapidly in 2007, and is set to continue its high growth rate in the coming years. The slow bureaucracy however, has been a restraint to growth, despite Government assurances that it will streamline the process. The Spanish BIPV market took off in 2004, hanging onto the coat-tails of the openfield PV market which had had a skywards growth trajectory following the introduction of liberal FiTs for PV installations generally, and supportive schemes like soft loans and PV ordinances for large commercial buildings. Due to the focus on open-field PV, the Spanish BIPV market has experienced less growth than the general PV market, but this is now set to change, following the decision by the Spanish Government to revise its tariffs for PV, giving greater importance to BIPV and scaling down its open-field PV tariffs. This will lead to a focus on BIPV from both consumers and manufacturers from the mid 2009 onwards, when the tariffs are due to come into effect. Some of the other emerging markets are the Portuguese, Greek and Swiss markets. These three countries are poised to implement BIPVspecific tariffs in 2009, ushering in an era of high growth and consumer interest in these markets.
Technological perspective
The Italian market should have been a haven for BIPV, with good climatic conditions and high investment capability. Until recently though, the lack of specific tariffs for BIPV combined with administrative and bureaucratic hurdles have been restraining growth.
Due to the dominance of on-grid BIPV installations, which make up more than 95% of current BIPV installations in Europe, there is not much of a market for storage technology in BIPV. In terms of module technology, the market is dominated by crystalline silicon technology, which accounts for about 90% of the market. In this, mono-crystalline silicon technology is used more than poly-crystalline technology, mainly due to aesthetic benefits rather than performance advantage.
However in 2007, the market was boosted with the introduction of the Conto Energia laws,
Thin film and other technologies account for less than 10% of the market. In the case of
thin film however, the technology has gained a steady rise in acceptance as manufacturing technology has decreased the cost of the end product, while at the same time bringing efficiencies closer to crystalline silicon. There is a growing market for thin film modules for prestige installations or large commercial projects where aesthetics are chosen over performance. However, not much change to the status quo is expected over the next few years, with crystalline silicon modules being preferred by the majority of consumers. However, as the efficiencies increase and costs decrease, it is expected that there will be greater adoption of thin film modules post 2012.
From the other side of the counter With all the current focus on energy, it is easy to forget that the BIPV market not only encompasses solar PV energy, but also the construction industry. It is important for the manufacturer to position BIPV as a practical construction material, not only to the homeowner, but to construction companies and architects as well. PV manufacturers have been looking to form partnerships with architects, installers and construction companies to try to educate them about the benefits of BIPV as a building material, at the same time as reaching out to homeowners. On the end user side, most homeowners prefer to buy all their components from a single manufacturer, especially when it is a large investment like BIPV, as this makes maintenance and support easier. This is especially true of the residential sector where homeowners are more wary of large investments. In order to better reach homeowners as well as secure supply and distribution of products, manufacturers should aim for greater vertical integration, both above and below them on the value chain; at the upper end through partnerships with silicon or wafer suppliers, and at the lower end through partnerships with installers, architects and distributors. An early entry can also help a company boost its reputation among market players – including end users – giving it an advantage over its competitors and a platform for expansion when the market is finally accepted as a mainstream market on its own, and not just viewed as a byproduct of the PV market that survives solely on subsidies and Government support.
renewable energy focus
March/April 2009
55
BIPV hotspots in the EU THE EUROPEAN BUILDING INTEGRATED PHOTOVOLTAICS BIPV MARKET IS A NICHE MARKET WITH GREAT POTENTIAL. ALTHOUGH THE MARKET TAKES UP LESS THAN FIVE PERCENT OF THE TOTAL EUROPEAN SOLAR PHOTOVOLTAIC PV MARKET, THERE IS CONSIDERABLE INTEREST DUE TO ITS HIGH YEARONYEAR GROWTH AND THE INCREASING NUMBER OF COUNTRIES WITH SUPPORTIVE LEGISLATION FOR BIPV. AKHIL SIVANANDAN, RESEARCH ANALYST BUILDING TECHNOLOGIES AT FROST & SULLIVAN, REPORTS. Market introduction BIPV systems are defined as those that are directly integrated into the envelope of a building, serving a secondary purpose such as roof, façade or shading system. Such systems usually consist of the PV module and waterproofing elements, a PV combiner, a grid inverter and an import/export meter. The European BIPV market in 2007 was estimated to be worth €143 million with a total installed capacity of 25.7 MW for the commercial, residential, industrial and public markets combined (source: Frost & Sullivan). The bulk of revenues have come from the commercial and industrial markets. While the public market has been important in spreading the visibility of BIPV through large showcase projects, its market share has dropped by a large margin in recent years due to the high growth rates of the residential and commercial markets.
Application focus The residential sector has witnessed the highest growth becoming the largest sector for BIPV. The sudden spike in the growth rates in residential can be attributed to the rise of the French and Italian markets. These two markets have, over the past two years, implemented high feed-in tariffs for BIPV systems,
54
renewable energy focus
March/April 2009
especially for small-scale systems, which have increased consumer adoption of the technology. The French market in particular has witnessed large growth rates due to a high rate of adoption in the residential sector. The Italian market has also witnessed this to a lesser degree, although it has been hindered by the slow and complicated bureaucratic process in the country. Though the penetration in the residential sector has been miniscule in most markets, greater market penetration can be achieved through correct implementation of supportive legislation, as was demonstrated by the markets of Germany and Luxembourg from the year 2000 onwards. Luxembourg now has the highest market penetration level for BIPV in Europe while Germany has, through its ongoing support for BIPV, established itself as the largest market for BIPV in Europe. The commercial sector has also started utilising BIPV more, especially in countries where there is a high level of legislative support. In particular, the office and warehouse sectors have witnessed high growth over the last few years. The commercial application of BIPV should become more mainstream after 2011, when the use of BIPV becomes more widespread and makes more sense economically as costs decrease, and as the residential sector in new
markets like Portugal, Greece, France and Italy begins to stabilise and manufacturers look to other sectors to sustain growth. The public sector will remain an important avenue into new markets. Publicly-financed showcase developments have proved their importance as testing grounds for new technologies, as well as for increasing awareness and local expertise in a region. These are the foundations for the establishment of a market for BIPV. Though there will be steady growth in the public sector, it will be much less than that of the commercial and residential sectors. The public sector’s growth in the coming years will be mainly due to showcase developments and increasing awareness among Governments about BIPV.
Geographic hotspots The factor common to all the best regions for investment in BIPV has, of course, been the level of legislative support. These regions have not been afraid to support BIPV, usually through feed-in tariffs (FiTs), although easy availability of loans, solar PV ordinances and other such supportive legislation is also important to grow and sustain the market. Manufacturers have traditionally gravitated towards such regions, while those with the capacity and a long-term perspective have
BIPV
PV manufacturers have been looking to form partnerships with architects, installers and construction companies to try to educate them about the benefits of BIPV as a building material, at the same time as reaching out to homeowners. tried to foster demand for BIPV in new markets – even when there is little or no support from the Government. In the latter case, it is usually through small-scale demonstration projects and off-grid installations, with a view to testing market demand and raising awareness. The largest market for BIPV in Europe is the German market. The country started its BIPV programme in 1999 with its 100,000 roofs programme. The guarantees of FiTs and interest free loans led to rapid development of the market, making it the largest PV market in the world by 2004. This early focus on BIPV has enabled the country to develop a high level of expertise among installers, designers, architects and manufacturers of BIPV products, as well as a high level of awareness among the end consumers. The amendments in Germany’s renewable energy act, the EEG (Erneuerbare Energien Gesetz) which ensures high feed-in tariffs for BIPV systems, especially façadeintegrated ones, has ensured that Germany will retain its place as one of the largest markets for BIPV in the world. The French BIPV market transformed itself into a hotspot for manufacturers when BIPV-specific FiTs were introduced in 2006. By the end of 2007, the French market had grown into the second largest market for BIPV in Europe, behind Germany. Meeting the high demand from the French market has been a challenge for manufacturers. As France has only recently started focusing on the BIPV sector, the market is still trying to establish a strong manufacturing and consumer base. The French BIPV market is also suffering from a lack of expertise for BIPV, especially in design and installation.
which granted very high FiTs for BIPV, and a clear cut definition for a BIPV installation. It also provided consumers with several payment options and supportive legislation for utilising the BIPV tariffs. Due to this fact, the market has grown rapidly in 2007, and is set to continue its high growth rate in the coming years. The slow bureaucracy however, has been a restraint to growth, despite Government assurances that it will streamline the process. The Spanish BIPV market took off in 2004, hanging onto the coat-tails of the openfield PV market which had had a skywards growth trajectory following the introduction of liberal FiTs for PV installations generally, and supportive schemes like soft loans and PV ordinances for large commercial buildings. Due to the focus on open-field PV, the Spanish BIPV market has experienced less growth than the general PV market, but this is now set to change, following the decision by the Spanish Government to revise its tariffs for PV, giving greater importance to BIPV and scaling down its open-field PV tariffs. This will lead to a focus on BIPV from both consumers and manufacturers from the mid 2009 onwards, when the tariffs are due to come into effect. Some of the other emerging markets are the Portuguese, Greek and Swiss markets. These three countries are poised to implement BIPVspecific tariffs in 2009, ushering in an era of high growth and consumer interest in these markets.
Technological perspective
The Italian market should have been a haven for BIPV, with good climatic conditions and high investment capability. Until recently though, the lack of specific tariffs for BIPV combined with administrative and bureaucratic hurdles have been restraining growth.
Due to the dominance of on-grid BIPV installations, which make up more than 95% of current BIPV installations in Europe, there is not much of a market for storage technology in BIPV. In terms of module technology, the market is dominated by crystalline silicon technology, which accounts for about 90% of the market. In this, mono-crystalline silicon technology is used more than poly-crystalline technology, mainly due to aesthetic benefits rather than performance advantage.
However in 2007, the market was boosted with the introduction of the Conto Energia laws,
Thin film and other technologies account for less than 10% of the market. In the case of
thin film however, the technology has gained a steady rise in acceptance as manufacturing technology has decreased the cost of the end product, while at the same time bringing efficiencies closer to crystalline silicon. There is a growing market for thin film modules for prestige installations or large commercial projects where aesthetics are chosen over performance. However, not much change to the status quo is expected over the next few years, with crystalline silicon modules being preferred by the majority of consumers. However, as the efficiencies increase and costs decrease, it is expected that there will be greater adoption of thin film modules post 2012.
From the other side of the counter With all the current focus on energy, it is easy to forget that the BIPV market not only encompasses solar PV energy, but also the construction industry. It is important for the manufacturer to position BIPV as a practical construction material, not only to the homeowner, but to construction companies and architects as well. PV manufacturers have been looking to form partnerships with architects, installers and construction companies to try to educate them about the benefits of BIPV as a building material, at the same time as reaching out to homeowners. On the end user side, most homeowners prefer to buy all their components from a single manufacturer, especially when it is a large investment like BIPV, as this makes maintenance and support easier. This is especially true of the residential sector where homeowners are more wary of large investments. In order to better reach homeowners as well as secure supply and distribution of products, manufacturers should aim for greater vertical integration, both above and below them on the value chain; at the upper end through partnerships with silicon or wafer suppliers, and at the lower end through partnerships with installers, architects and distributors. An early entry can also help a company boost its reputation among market players – including end users – giving it an advantage over its competitors and a platform for expansion when the market is finally accepted as a mainstream market on its own, and not just viewed as a byproduct of the PV market that survives solely on subsidies and Government support.
renewable energy focus
March/April 2009
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