RESEARCH REPORT. Published 3Q Philip Drachman Industry Analyst. Kerry-Ann Adamson, Ph.D. Research Director

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1 RESEARCH REPORT Executive Summary: Building Integrated Photovoltaics BIPV and BAPV: Market Drivers and Challenges, Technology Issues, Competitive Landscape, and Global Market Forecasts NOTE: This document is a free excerpt of a larger report. If you are interested in purchasing the full report, please contact Pike Research at sales@pikeresearch.com. Published 3Q 2012 Philip Drachman Industry Analyst Kerry-Ann Adamson, Ph.D. Research Director

2 Section 1 EXECUTIVE SUMMARY 1.1 Building Integrated Photovoltaics Overview Despite the difficult market environment for the solar industry as a whole, the opportunity for building integrated photovoltaics (BIPV) looks extremely promising. BIPV is set to become one of the fastest-growing segments in the solar industry with up to 4.6 GW of installations forecast through Lead markets during this period will be Europe, North America, and Asia Pacific, due in part to demand from architects, designers, and building developers. Until recently, aesthetic and performance concerns greatly limited the ability of architects to use BIPV technology in their building designs, but this has been changing. Energy-efficient, flexible, and transparent solar materials, which offer superior vertical performance and subtle red, green, or blue (RGB) color options, are beginning to emerge. With these features, BIPV will no longer be confined to spandrel or overhead applications. Rather, the entire building envelope will be able to put it to use, allowing the structure to produce its own power and feed additional power into the grid system. The U.S. building industry has been facing a challenge with continued low housing starts and new builds for some time. At the same time, the global solar industry has been subjected to severe reductions in financial subsidies in key markets that, until recently, were the savior of the industry. The emergent BIPV market, which straddles the two industries, offers a new way to develop revenue streams for both parties. Solar suppliers have begun to partner with building and construction companies, as well as designers and architects. In doing so, they have gained access to completely new markets. The building companies have also started to benefit and see new opportunities in green buildings and in retrofitting existing residential homes and commercial entities. BIPV is really starting to come of age, a phenomenon that will continue throughout the period discussed in this report ( ). Meanwhile, an increasing number of players in the supply chain are working together to provide solutions for the entire building envelope. Companies to watch out for in 2012 include Dow Solar, PowerFilm, and Pythagoras Solar, as outlined below.» Dow Solar s Powerhouse CIGS-based solar tiles are a new entry in the copper indium gallium selenide (CIGS) segment of the solar market. Great potential exists for more new solutions, but they have to offer enhanced performance and cost reduction in order to facilitate broader market deployment and not just provide one-off showcase projects.» PowerFilm is working with Serge Ferrari, a French textile company, and plans to launch novel amorphous silicon (a-si)-based products for the architectural fabric market. At a later date, plans include entering the standing seam metal roofing market. 1

3 » Pythagoras Solar has developed SunGuard Photovoltaic Glass Units (PVGUs) that combine energy efficiency, power generation, and 50% transparency in a standard double-pane insulating glass unit using crystalline silicon (c-si) for integration into curtain wall and skylight applications. The company is partnering with several players, including Guardian Industries for final window assembly and Sunergy in Asia Pacific to open up distribution channels for the company in all the major building markets for imminent product launch. Going into 2013, the BIPV market will open up more as it rebounds from the great solar depression and several long-term projects hit the market. Projects will come from companies such as DyeTec Solar, Heliatek, Solantro Semiconductor, and Tata Steel, as described below.» DyeTec Solar represents a new partnership between Pilkington North America, which is one of the largest glass producers (and is owned by Japanese glass firm Nippon Sheet Glass), and Dyesol, a leading Australian dye-sensitized cell (DSC) raw materials supplier. Dyesol s DSC coating will be added to Pilkington s TEC series of transparent conductive oxide (TCO)-coated float glass to provide PV functionality in new semi-transparent BIPV glass products for use within the building envelope. The company estimates that 20% of production will be converted to DSC solar glass, which would amount to over 840 million square meters (m 2 ) per year. Due to efficiency issues, DyeTec is not currently producing. Initial architectural solar windows products are due out in late 2013.» Heliatek plans to start production of its small molecule-based organic photovoltaic (OPV) modules in a roll-to-roll (R2R) process on low-cost metal foils this summer. It is working with several partners, including Reckli, which is a manufacturer of elastic molds for concrete building façades. Heliatek plans to enable vertical concrete walls of buildings to become highly efficient solar energy harvesters by integrating OPV panels directly into concrete façade blocks. This approach will combine energy harvesting to reduce a building s carbon footprint and, at the same time, provide a discreet aesthetically pleasing appearance. Heliatek plans to introduce these OPV panels to the market in Given their minimal weight, the panels may be good candidates for use with lightweight industrial roofs.» Solantro Semiconductor is developing an integrated circuit-based nano-inverter BIPV product. It will provide a new way of interconnecting thin-film and c-si BIPV modules using nano-inverters to enable an alternating current (AC) grid approach between them, similar to what Enphase achieved with micro-inverters. This will bump the solar energy harvest by up to 30%, reduce costs and installation time by 50%, and enhance safety. Product launch is expected in early 2013.» Tata Steel is one of the largest steel producers in the Asia Pacific region, with presence across seven countries, which Pike Research believes will be pivotal in developing its new DSC-coated steel roofing. It has produced the world s largest DSC module measuring over 6 meters in length and approximately 1.8 m 2 in area as one length of coated steel. This represents an important step toward the development of finished solar modules made by continuous production from PV rolls. Developing the ability to print the PV coating directly on to steel roof cladding will enable the modules to be produced in large volumes 2

4 cost-effectively. In addition, the modules can be integrated into warehouse and industrial building roofs to provide a sustainable power source throughout the world (especially in Asia Pacific). The new build residential and the retrofit building markets will both benefit from this, since these products will be much lighter than existing rigid silicon PV panels, which will facilitate their integration into existing structures. Tata Steel plans to commercialize its first DSC-coated metal roof panels for northern Europe shortly. At the forefront of these technology developments has been government legislation and regulations. The European Union (EU) has been pushing to reduce emissions by stimulating and subsidizing the use of renewable energy sources. The EU is committed to reducing carbon dioxide (CO 2 ) emissions with a target of 20% renewable energy by 2020 and has mandates for nearly zero energy buildings. All new public buildings are to be carbon-neutral by 2018 and all new buildings constructed in Europe after 2020 will need to be carbon-neutral. This means that the buildings should have very low energy needs and meet those needs to a very large extent with renewable energies that are harvested locally or in close proximity to the building. As a result, Pike Research believes that building-integrated renewable energy will grow in importance from a small market niche valued at about $558 million in 2011 to an established PV segment with $2.5 billion in revenue by Much of this growth will take place in urban areas with medium- and high-rise buildings with only a limited amount of rooftop space availability. Chart 1.1 BIPV/BAPV Revenue, Base Scenario, World Markets: $3,000 $2,500 ($ Millions) $2,000 $1,500 $1,000 $500 $ (Source: Pike Research) 3

5 In the United States, green buildings and the Leadership in Energy and Environmental Design (LEED) rating system have helped architects and building owners design and build buildings that maximize building energy efficiency. BIPV innovators, such as Trulite Glass & Aluminum Solutions and altpower Inc., follow full integration of solar into the building envelope. California has over 1,000 LEED-certified projects, which is more than any other state in the country, as well as the most solar installations in the country, particularly residential roofing and BIPV systems. The U.S. Department of Energy s (DOE) SunShot Initiative aims to reduce the price of solar systems by about 75% by Commercial rooftops will cost $1.25/watt (W) and residential rooftops will cost $1.50/W. Many more countries are now developing building and solar regulations and beginning to offer various incentives to encourage the implementation of BIPV technology. Each region has its specific regulations and policies, but key markets likely to emerge through 2017 include Eastern Europe (Lithuania, Serbia, Slovenia, Poland, and Ukraine), Asia Pacific (especially Australia, China, India, Japan, Malaysia, and Thailand), Latin America (Brazil and Chile), and South Africa. 4

6 Section 9 TABLE OF CONTENTS Section Executive Summary Building Integrated Photovoltaics Overview... 1 Section Market Issues Market Overview Market Segments Current Market Activities ( ) Roof Applications Solar Panels Tiles Shingles Wall Applications Façades Cladding Curtain Walls Window Applications Atrium and Skylights Shading Structures Windows Building Types and Activities Commercial Residential

7 2.4.3 Energy Programs Zero Energy Homes Feed into BIPV North America Europe Asia Pacific Section BIPV Markets and Incentives by Region Introduction North America Canada United States California Connecticut Florida Maryland Massachusetts New Jersey Other States Europe Germany France Italy Belgium Greece United Kingdom

8 3.3.7 The Netherlands Ukraine Other European Markets Asia Pacific China India Japan Malaysia South Korea Taiwan Thailand Middle East and Africa Section Technology Issues Advances in Materials First Generation Second Generation Third Generation Trends by PV Technology Crystalline Silicon Thin-film PV Thin-film Silicon CIGS DSC and OPV

9 4.3 Performance Developments Amorphous Silicon Cadmium Telluride CIGS Dye-Sensitized Cells Organic Photovoltaics Lifetimes Nano-inverter Technology Building Codes and Standards Architectural and Building Codes Standards Where Does an Integrated Standard Really Belong? Underwriters Laboratories and American Society for Testing and Materials European Standards Fire Classifications Wind Resistance Wind-driven Rain Roof Water Tightness Roof Warranty Quality Control Section Key Industry Players Overview Solar Panel Suppliers Conventional c-si Solar Suppliers

10 Bosch Centrosolar Hanwha SolarOne Swiss Solar Systems Thin-film Solar Suppliers Dyesol Ltd Energy Conversion Devices General Electric Global Solar Energy Panasonic Sanyo SoloPower SunPower Corp BAPV/BIPV Suppliers BAPV Suppliers Aishin Seiki Company Ltd ERG Renew GE Solar HelioVolt Honda Soltec Kyocera Solar Lumeta Inc PowerFilm, Inc Sharp Solar Soltecture

11 Suntech Power Holdings BIPV Suppliers ERG Renew Glaswerke Arnold GmbH & Co. KG Heliatek GmbH Mage Sunovation GmbH Oxford Photovoltaics Schott Solar Schüco Scheuten Solar Solarmer Energy Stellaris Key Building Materials Suppliers altpower Dow Solar Solutions Eagle Roofing Guardian Industries Kalzip Johns Manville Monier Group PetersenDean Roofing & Solar Systems Pilkington Glass PV Systems Pythagoras Solar Saint-Gobain Solar Systems (Avancis)

12 Sapa Solar SKYShades Tata Steel (Corus Colors) ThyssenKrupp Steel Europe Trulite Glass & Aluminum Solutions (Incorporating Arch Aluminum & Glass Co. Inc.) Section Market Forecasts Introduction Costs and Economic Assessment BIPV System Costs Roofs Façades Future Costs Technology-Supplier Partnerships BIPV Economic Parameters Leasing A New Business Reality? BIPV Forecasts ( ) Worldwide BIPV/BAPV Market Demand BIPV/BAPV Growth by Region BIPV/BAPV Growth by Technology Section Company Directory Section Acronym and Abbreviation List

13 Section Table of Contents Section Table of Charts and Figures Section Scope of Study Sources and Methodology Notes

14 Section 10 TABLE OF CHARTS AND FIGURES Chart 1.1 BIPV/BAPV Revenue, Base Scenario, World Markets: Chart 6.1 BIPV/BAPV Capacity, World Markets: Chart 6.2 BIPV Capacity, World Markets: Chart 6.3 BAPV Capacity, World Markets: Chart 6.4 Wholesale BIPV/BAPV Revenue, World Markets: Chart 6.5 Base Case BIPV/BAPV Capacity by Region, World Markets: Chart 6.6 BIPV/BAPV Capacity by Technology, World Markets: Figure 2.1 Pros and Cons of Solar Building Elements versus Standard Building Elements... 8 Figure 2.2 RTL-CDW Solar Tiles Figure 2.3 Zero Energy Home Incorporating Solar Shingles Figure 2.4 Heliatek BIPV Concrete Façade with Purple OPV Solar Modules Figure 2.5 Complex BIPV Façade on the Canton Tower in China Figure 2.6 Solar Cladding Installed at the Central Library, Imperial College (U.K.) Figure 2.7 SolarIris from Hanwha Figure 2.8 Solar Shade Structures from SKYShades Figure 2.9 Self-illuminating Solar Module Window Figure 2.10 Material Solutions for Bayer s ECB Program Figure 2.11 NAHB/Wells Fargo HMI and New Single-Family Housing Starts, U.S Figure 2.12 Percentage Positive Score for Each Factor for Solar PV Systems Figure 2.13 Fujisawa Sustainable Smart Town Opens Figure 3.1 Largest Amorphous Silicon BIPV Rooftop in Germany (5.72 m 2 ) Figure 4.1 Layout of OPV Cell

15 Figure 4.2 Cell Efficiency Roadmap for PV Technologies ( ) Figure 4.3 Example of Generated Electricity for Both Clear and Sunny Days (left) and Cloudy Days (right) Between December and July for the DSC Modules and the Si Module Figure 4.4 Solantro IC-based Micro- and Nano-inverters Form a Natural Evolution for AC PV Figure 4.5 EN Eurocodes & Related Standards Figure 4.6 U.S. Wind Map Figure 5.1 Global Solar Energy Product Concept Figure 5.2 Suntech Residential PV Product, the Just Roof Figure 5.3 SAPA Building Systems Product Groups Table 2.1 Solar Company Closures, World Markets: Table 2.2 Solar Company Acquisitions, World Markets: Table 2.3 Solar Product Application Matrix by Solar Technology... 8 Table 2.4 Markets for BIPV Products Table 2.5 Selected Commercial BAPV/BIPV Systems by Power, World Markets: Table 2.6 Status of EPBD and NZEB Legal Compliance in Selected European Countries Table 3.1 Recent FIT Changes in Global BIPV Markets Table 3.2 Feed-in Tariffs, Key PV Regions in North America: Table 3.3 PV Feed-in Tariffs, Ontario: Table 3.4 Ontario s FIT and microfit Project Installation Summary Table 3.5 Top States by PV Installations, United States: 2010 and Table 3.6 Rebate Levels for Commercial and Residential Solar Systems, United States: Table 3.7 Solar Feed-in Tariffs, Key BIPV European Countries: Table 3.8 PV Feed-in Tariffs, Germany: Table 3.9 PV Feed-in Tariffs, France: Table 3.10 PV Tariffs, Italy:

16 Table 3.11 BIPV Tariffs, Italy: Table 3.12 PV Feed-in Tariffs, Greece: Table 3.13 PV Feed-in Tariffs, United Kingdom: Table 3.14 PV Feed-in Tariffs, Emerging Eastern European Markets: Table 3.15 Feed-in Tariffs for Key Thin-Film PV Countries, Asia Pacific: Table 3.16 PV Feed-in Tariffs, China: Table 3.17 National Solar Mission, India: Table 3.18 PV Feed-in Tariffs, India: Table 3.19 Japan s New Law for Utilization and PV Power Purchase Price: Table 3.20 Japan s New FIT Program from July Table 3.21 PV Feed-in Tariffs, Malaysia: Table 3.22 PV Feed-in Tariffs, South Korea: Table 3.23 South Korea s One Million Green Home Program Table 3.24 PV Feed-in Tariffs, Taiwan: Table 4.1 Comparison of Solar Technologies for BIPV Table 4.2 Comparison of PV Cell Technologies for the BIPV Market Table 4.3 a-si Technology Roadmap Goals: 2010, 2011, and Table 4.4 CdTe Technology Roadmap Goals: 2011 and Table 4.5 CIGS Technology Roadmap Goals: 2011 and Table 4.6 DSC Technology Roadmap Goals: 2011, 2012, and Table 4.7 OPV Technology Roadmap Goals: 2011, 2012, and Table 4.8 OPV Technology Issues and Developments Table 4.9 Issues Associated with PV Installations in Buildings Table 4.10 Architectural and Building Code Issues Table 4.11 Key UL and IEC Standards for BIPV Products

17 Table 4.12 Standard Fire Ratings for Roof Coverings UL 790/ASTM Table 4.13 Fire and Wind Standards for BIPV Products Table 5.1 Solar Partnerships Technology Suppliers Teaming Up with Construction/Building Firms Table 5.2 Key Solar Panel Suppliers, World Markets: Table 5.3 Dyesol Technology Developers and Industrial Partners Table 5.4 Key Developers Integrating Solar Cell Technology into BAPV/BIPV Products, World Markets: Table 5.5 Key Developers Integrating Solar Cell Technology into BIPV Products, World Markets: Table 5.6 Solarmer's OPV Developments Table 5.7 Key Building Materials Suppliers Integrating Solar Cell Technology into BAPV/BIPV Products Table 6.1 Comparison of PV Module Costs by Technology, World Markets: 2011, 2012, and

18 Section 11 SCOPE OF STUDY The market for building integrated photovoltaics (BIPV) has long been regarded as a small niche market and has drawn scant attention from most of the solar industry s major players. Today, this is changing. As interest, demand, and knowledge about BIPV has ramped, new solar products have been introduced into the market and various incentives have raised the returns of BIPV projects in many countries. Pike Research has prepared this report as an update to its 2010 report. The primary goal of this study is to forecast the growth of the BIPV market. It also aims to demonstrate how and why solar product manufacturers, building materials suppliers, architects, solar installers, roofers, construction firms, and other companies along the supply chain and interested in winning business in the solar market should enter the BIPV market. Specifically, this report:» Defines BIPV and building-applied PV (BAPV) as solar products that not only function as building materials, but also must be aesthetically appealing.» Provides illustrative examples of each type of BIPV/BAPV installation/product type, such as residential and commercial rooftops, walls, windows, and other structures.» Details barriers that have inhibited growth of the BIPV/BAPV market so far, as well as key market drivers that have overcome these barriers to spur growth.» Analyzes the global BIPV/BAPV market for opportunities, as well as identifying and segmenting the major markets by region.» Focuses on technological issues that define winning value propositions.» Reviews leading companies in the BIPV/BAPV market and their products and competitive positioning.» Forecasts the growth of the BIPV/BAPV market in terms of power generation capacity (MW) and revenue ($), as well as by region and by solar technology for the period Pike Research aims to enable industry participants to understand the current state of the emerging BIPV/BAPV market, assess market drivers and competition, and project potential revenue. SOURCES AND METHODOLOGY Pike Research s industry analysts utilize a variety of research sources in preparing Research Reports. The key component of Pike Research s analysis is primary research gained from phone and in-person interviews with industry leaders including executives, engineers, and marketing professionals. Analysts are diligent in ensuring that they speak with representatives from every part of the value chain, including but not limited to technology companies, utilities and other service providers, industry associations, government agencies, and the investment community. 180

19 Additional analysis includes secondary research conducted by Pike Research s analysts and its staff of research assistants. Where applicable, all secondary research sources are appropriately cited within this report. These primary and secondary research sources, combined with the analyst s industry expertise, are synthesized into the qualitative and quantitative analysis presented in Pike Research s reports. Great care is taken in making sure that all analysis is well-supported by facts, but where the facts are unknown and assumptions must be made, analysts document their assumptions and are prepared to explain their methodology, both within the body of a report and in direct conversations with clients. Pike Research, a part of the Navigant Consulting, Inc. Energy Practice, is a market research group whose goal is to present an objective, unbiased view of market opportunities within its coverage areas. Pike Research is not beholden to any special interests and is thus able to offer clear, actionable advice to help clients succeed in the industry, unfettered by technology hype, political agendas, or emotional factors that are inherent in cleantech markets. NOTES CAGR refers to compound average annual growth rate, using the formula: CAGR = (End Year Value Start Year Value) (1/steps) 1. CAGRs presented in the tables are for the entire timeframe in the title. Where data for fewer years are given, the CAGR is for the range presented. Where relevant, CAGRs for shorter timeframes may be given as well. Figures are based on the best estimates available at the time of calculation. Annual revenues, shipments, and sales are based on end-of-year figures unless otherwise noted. All values are expressed in year 2012 U.S. dollars unless otherwise noted. Percentages may not add up to 100 due to rounding. Note the following exchange rates (from July 12, 2012):» 1 = $1.22» 1 = $1.54» RMB 1 = $0.16» CAD 1 = $0.98» 1 = $0.01» NT$1 = $

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