BIPV Needs Architects and Builders Through 2016

Will Building Integrated PhotoVoltaics (BIPV) grow 10-fold or 20-fold in the next five years?

Either way, you're talking big business. (Shown here is a BIPV installation on a Hong Kong building from PremierPower.)

The latest research from Lux Research on the market indicates we have three more years of working with architects and small builders before a mass market effort can be launched.

Lead author Aditya Ranade is still convinced that means a hockey-stick of growth, a straight line pointing upward. He estimates that by 2016 you'll have a $6 billion market with a capacity of 1 gigawatt of power.

An earlier study from NanoMarkets was even more optimistic, calling this a $11 billion market in 2016 .

In Europe, the residential market is leading because of French and Swiss feed-in tariffs and for calls by policymakers for Net Zero Energy Buildings (NZEB), which create as much energy as they use. The NZEB movement is also creating new markets in insulating materials, because the easy way to reduce the amount of electricity you need to make for NZEB is to reduce the amount you need to use to keep the place warm.

There's a kind of irony here, in that the faster the insulation market grows the less demand there may be for actually producing power within buildings. (Shown here is a Boston solar shingle installation, from The Boston Solar Company.)

In the U.S. the acronym to know is LEED (Leadership in Energy and Environmental Design). Here it's commercial builders who are taking the lead, seeing low energy usage and some energy production as something that will bring higher rents. How much money the space costs to maintain electrically, per unit of time, is the metric to watch.

The big challenge for BIPV materials is the actual cost of the electricity materials generate, against the actual cost of the material. Insulation and energy production both serve to improve the Levelized Cost of Electricity (LCOE) for a building, and it's this balance which architects can measure.

Ranade says this provides opportunity for a variety of materials, especially multicrystalline silicon, Cadmium Iridium Gallium Arsenide (CIGS) and Cadmium-Telluride (CdTe). The first material leads in roofs, the last in facades, and the second is the obvious choice in siding.

One thing the report doesn't make clear is the importance of standards. The easier you can make installation, the cheaper you can make that installation system, the less labor you require to install a BIPV system, the lower its total cost and the closer it gets to grid parity, which is now the obvious industry goal.

The text of the report even gets into the question of standards, which admittedly need work. "A plethora of standards and building codes establish onerous performance requirements for BIPV,” it says on page 8, then includes a table of different tests and standard requirements. (It is actually good to see this, because it means progress can be accelerated with common sense lessons from the computing era.)

Once grid parity is achieved the market for any material skyrockets. Feed-in tariffs and other aids are a short-term solution aimed at helping finance the work needed to reach that goal. The need for such aid currently is a serious industry weak point, with oil and coal advocates ignoring their own huge subsidies in order to go after the pittances being lost in this effort. But breaking that bond to politics is as vital, in its own way, as breaking the economy's reliance on fossil fuels.

(To the right, a grid parity chart by Stephen Roach of Deutsche Bank, from the blog of John Schmitz. Note that there is over-supply until the crossing point is reached, just as we're finding in the market. After that point, however, demand outstrips supply.)

But this also means the big bucks are moving upstream, from the companies that know how to install or finance solar power installations, who can profit from subsidized rates on their electricity, to those who specify and order BIPV systems for buildings. Companies like Ecotemis, which are training such people, are in a market sweet spot.

The difference between the market estimates of Lux and NanoMarkets comes down to assumptions of how quickly costs can be scaled down through standards, and how quickly people can be trained to specify these solutions. And, remember, we're talking in both cases of global revenues, which can easily be impacted by government policies, or industry breakthroughs.