Investigating Business Models for Building Integrated Photovoltaics (BIPV)

IEA INTERNATIONAL ENERGY AGENCY
PHOTOVOLTAIC POWER SYSTEMS PROGRAMME
Investigating Business Models for Building
Integrated Photovoltaics (BIPV)
Michiel Ritzen, Zuyd University of Applied Sciences, the Netherlands
BIPV case study report IEA PVPS Task 15B1/B2, the Netherlands

International Energy Agency
• 30 members
• Founded in 73/74 after the first oil crisis
• Initially to respond to disruptions in the
oil supply
• Now providing research, statistics,
analysis and recommendations through
a variety of gremia, such as
• TCP’s (Technological Collaboration
Programmes)

International Energy Agency
The IEA works to ensure reliable,
affordable and clean energy for its 30
member countries and beyond. Our
mission is guided by four main areas of
focus: energy security, economic
development, environmental awareness
and engagement worldwide.

Technological Collaboration
Programme
• A large number of TCP’s exist,
covering the following topics:
Cross-Cutting Activities
Buildings
Electricity
Industry
Transport
Fossil Fuels
Fusion Power
Renewable Energy Technologies
For more information: https://www.iea.org/media/impag/TCPwebsites.pdf

PhotoVoltaic Power Systems
The IEA Photovoltaic Power Systems Programme (PVPS) is one of the TCPs established within
the IEA and, since its establishment in 1993, the PVPS participants have been conducting a
variety of joint projects in the application of photovoltaic conversion of solar energy into
electricity.
At this moment, the following projects are running:
Task 1 - Strategy & Communication
Task 9 - Developing Countries
Task 12 - Sustainability
Task 13 - Quality
Task 14 - Grid Integration
Task 15 - BIPV
Task 16 - Solar Ressource
Task 17 - PV For Transport
More information on: http://iea-pvps.org/

Towards zero-emission efficient and resilient buildings, Global Status Report, Global Alliance for Buildings and Construction (GABC)
2016

Towards zero-emission efficient and resilient buildings, Global Status Report, Global Alliance for Buildings and Construction (GABC)
2016
PV in buildings low hanging fruit

Not BIPV
Is this the route?

The BIPV market
Source: dem4BIPV – Framework and Requirements Analysis, 2016

IEA PVPS Task 15
Enabling Framework for BIPV
acceleration
It is not about a ‘grand vision’ on BIPV or
reaching ‘grid parity’, it is about the basic
conditions for upscaling niche markets
and products.

Market boundaries
1. Residential rooftop
2. Tertiary building cold facades
3. Industrial lightweight structures

IEA PVPS Task 15 Subtasks
Subtask A – BIPV database
Subtask B – BIPV business cases
Subtask C – BIPV regulatory issues
Subtask D – BIPV environmental issues
Subtask E – BIPV R&D activities

Subtask A
Goal: to disseminatie BIPV experiences
• 20 projects
• 10 countries
• PDF book
• Interactive database

Subtask B
• Feasible business models will be based on
systems with high potential for replication
and economies of scale

Subtask C
Goal: to develop an international framework for BIPV specifications
and policy recommendations
• International definition of »BIPV« (Activity C.0)
• Analysis of user needs for BIPV & BIPV functions
(Activity C.1)
• BIPV technical requirements overview (Activity C.2)
• Multifunctional BIPV evaluation (Activity C.3)
• Suggest topics for exchange between different
standardization activities on international level
(Activity C.4)

Subtask D
Goal: Development of international
methodology for LCA of BIPV
 PEFCR on country level depending on
country participation

Subtask E
• Applied Research and Development for the
Implementation of BIPV”.
E.1: inventory of existing BIPV test sites: finished
E.2: comparison field and reliability tests; finished
E2.2: round robin started
E.3: Installation and maintenance issues
E.4: Diversity of products (shape, colors, technologies)
E.5: Performance analyses (monitoring, evaluation and
feedback)

PVPS Task 15
A number of reports are available:
http://iea-pvps.org/index.php?id=3

Thank you for your attention
Michiel Ritzen –
michiel.ritzen@zuyd.nl

Webinar – 06/09/2018
Philippe Macé, Senior Analyst, Becquerel Institute
IEA PVPS Task 15 – Subtask B

• Est. 2014 in Brussels, Belgium
• Applied research and strategic consulting company focusing
on solar PV technologies and their
• Global PV Market Analysis including competitiveness and
economics
• Industry analysis together with quality & reliability
• Integration into electricity systems (grids and markets)
• In-house experts and a global network of experts and
stakeholders
• PV Market Alliance partner
Becquerel Institute

Agenda
Common business models for BIPV
The PV and BIPV markets
A word on values associated with BIPV
New potentially viable business models
1
2
3
4
Why isn’t it already working?5

The global PV market is booming…
76 GW
Sources: IEA PVPS & PV Market Alliance
98 GW
2018
90 to 95 GW

But BIPV applications lag behind
Estimated share of BIPV in global PV
market in 2017
Estimated achieved share of the
maximal theoretical BIPV potential
in Europe by 2017
Estimated share of BIPV in European
construction market (roof & façade) in
2017
<2%
<0.5%
<1%
Source: Becquerel Institute

Subtask B: « Transition towards sound BIPV business models »
Focuses on:
• Inventory & analysis of existing business models for BIPV
applications
• Possible innovative business models to be developed
• Inventory & analysis of the regulation impacting BIPV
applications
• Barriers to development of BIPV market
• Recommendations to BIPV stakeholders
Info & download at www.iea-pvps.org
Task 15 Report

Collection of information
Identification of
relevant cases
Interviews with
key stakeholder
Analysis of the
results
Schematization
of business
models
Focus on economics,
performances, decision-
making process and
business model applied
With various characteristics::
• System capacity
• Location
• Building usage
• New construction or renovation
4 different business
models have been
identified

Added value
of BIPV
Related to building
component
functionalities
Related to
renewable electricity
generation
Related to design
& reputational
aspects
Values associated with BIPV
Real improvement
compared to BAPV
systems
But can be difficult to quantify…

What drives the market?
70%
20%
10%
Main driver of analyzed BIPV projects
Green status Electricity revenues Both
Although the analysis of
the business models
applied to the BIPV
systems does not tell the
same story…

The “classical” business model
Main features
The building owner occupies it and owns the
BIPV system.
Main value: PV electricity.
Additional positive side-effects as the BIPV
installation replaces building components.
Highly dependent of ability to self-consume
the PV production.
Significant regulatory risk.
Under-exploitation of “green identity”.

Renting of the building envelope
Main features
The building owner does not necessarily occupies its
building.
He rents a share of its building envelope to a third-party,
typically a company such as a utility. This latter installs
and owns the BIPV system.
Main value: renting fee.
PV electricity and potential feed-in tariff benefits the
third-party owner.
Low risk for the building owner: contractual relationship
with ensured renting fee.
Regulatory and performance risk for the third-party
owner.
No benefit for the potential tenant.

Leasing agreement
Main features
Typically, the building owner occupies its building.
It has a contract with a company (the lessor) which
provides the BIPV under a leasing agreement.
Building owner pays a monthly fee to the lessor.
Main value: PV electricity.
Additional positive side-effects as the BIPV
installation replaces building components.
Limited regulatory risk and reduced upfront cost.
Highly dependent of ability to self-consume the PV
production.
Financial incentives like FiT benefit the lessor.

Green identity Main features
The building owner rents its building and owns the
BIPV system. The tenant benefits from the PV
electricity.
Main value: rental price (with a premium thanks to
the “green identity”).
Additional positive side-effects for the building
owner as he benefits from potential financial
incentives and the BIPV installation replaces
building components
Risk for the investor (the building owner) is limited
as long as he does not rely too much on financial
incentives.
Not always easy to justify a high enough premium
to cover the investment cost.

Other potentially viable
business models for BIPV

On-bill financing Main features
Typically, the building owner occupies its building. It
has a contract with his utility company which
installs and owns the BIPV system.
Main value: PV electricity
Additional positive side-effects for the building
owner as the BIPV installation replaces building
components
Limited risk and reduced upfront cost for the
building owner.
Financial incentives like FiT benefit the lessor.

“BIPV as a service”
Main features
Typically, the building owner occupies its building.
Could own the BIPV system or lease it.
Main value: PV electricity
Additional positive side-effects for the building owner
as the BIPV installation replaces building components
Risk for the investor (the building owner) is limited.
Can be complex to design, especially if regulation is
not adapted.
Financial incentives like FiT do not benefit the building
owner.

Lack of cooperation
between stakeholders:
PV and
Construction/Building
sectors do not
communicate
Lack of awareness &
resistance to change
within the building
sector
Inadequate regulatory
environment
Difficulty to identify
required standards
and certifications: PV
and Building
Main obstacles
Main Consequences:
• Difficulties to develop appropriate
business models (e.g. due to
misalignment of incentives between
owners and tenants).
• Lack of confidence among stakeholders
Main Consequences:
• High transaction costs
• Non-optimized BIPV system and
performances
Main Consequences:
• High-risk perception which leads to
artificially high installation costs
• High customer acquisition costs
Main Consequences:
• Loss of time, and money,
especially within design phase
• High insurance and financing costs

Conclusions
• BIPV added cost is limited compared to the total cost of the building
• Few BIPV-specific business models exist, and none of them truly take advantage of all values linked
to BIPV systems
• Paradigm shift needed:
o BIPV is a building component before being a PV element
o BIPV is not “the” solution to reduce the environmental footprint of buildings but one among
others
• Regulators have a crucial role to play:
o They have the ability to increase the attractiveness of BIPV as a building component
o Increase the number of possibilities to value the production of distributed PV systems
• BIPV specialists need to collaborate with architects, construction companies and property owners

New Task 15 Subtask B
report to be published in
early 2019:
Helping decision-makers to design
profitable business models for
BIPV installations

Next step in evolution…
Thank you for your attention!

Investigating Business Models for Building Integrated Photovoltaics (BIPV)

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