Building Integrated Photovoltaic (BIPV)
Building Integrated Photovoltaic (BIPV)
Business Model Description
The photovoltaic panel can be considered a building material, and its installation can be carried out simultaneously with the building's design, construction, and installation. The building built this way can generate photovoltaic power while providing shelter, insulating heat, and keeping off wind and heat. Integrating photovoltaic materials and buildings can reduce the overall cost of buildings, save installation costs, and generate sustainable and considerable economic benefits.
Expected Impact
Integrating photovoltaics technology and building construction helps constructing high-quality green buildings, improving electricity access, reducing building carbon emissions.
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
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Country & Regions
- China: Shaanxi
- China: Shandong
- China: Gansu
- China: Ningxia
- China: Guizhou
Sector Classification
Renewable Resources and Alternative Energy
China's current energy structure dominated by fossil energy. Fossil energy resources are limited and can release large amounts of carbon dioxide when burt, accelerating global climate change and extreme weather events. Thus, renewable energy is crucial to China's green transformation and energy security.
The proportion of non-fossil energy in total energy consumption should be increased to about 20%. State Council's action plan for carbon peaking stated that wind and solar power generation, biomass power generation and heating should be developed. By 2030, the total installed generation capacity of wind and solar power will reach above 1200 gigawatts. (1)
Renewable energy employs about 32% women, compared to 22% in the energy sector. (2)
The IOAs in the renewable energy sector center around the utilization of solar energy, wind energy, and biomass energy.
The energy endowment and demand follow the contrastive distribution. Hydropower generation is centralized in southwest China, while wind and solar energy are centralized in northern China, which is far away from the centers of consumption in the eastern and coastal areas. Instable renewable energy makes consumption and stable operation of the grid challenging.
Alternative Energy
Solar energy is an important renewable energy source in China. With dramatic cost reduction, China is gradually phasing out subsidy for solar project, posing pressure for PV industry's further development. (3)
China's Energy Work Guidance has set a goal that photovoltaic power generation share in total electricity consumption to reach 11% in 2021. In addition, it highlight the need to further improve the utilization efficiency and the utilization rate of renewable energy including solar power. (4)
A large number of PV power stations are built on barren lands such as western China gobi deserts. The PV panels can reduce evaporation and thus maintain soil moisture. Its ecological restoration effect is remarkable — take lands in Qinghai and Inner Mongolia as examples — they have become suitable for the growth of grassland plants or even crop production. (5)
IOAs in the PV sector center around the application of cells and PV modules.
The intermittent nature of solar energy makes it hard to be fully utilized (6)
Solar Technology and Project Developers
Pipeline Opportunity
Building Integrated Photovoltaic (BIPV)
The photovoltaic panel can be considered a building material, and its installation can be carried out simultaneously with the building's design, construction, and installation. The building built this way can generate photovoltaic power while providing shelter, insulating heat, and keeping off wind and heat. Integrating photovoltaic materials and buildings can reduce the overall cost of buildings, save installation costs, and generate sustainable and considerable economic benefits.
Business Case
Market Size and Environment
USD 100 million - USD 1 billion
According to ARIZTON's data, in 2020 the maket size of BIPV in China was USD 680 million; according to the National Bureau of Statistics and the China Academy of Building Research's data, the market size of BIPV in China is estimated to be close to 50 billion yuan by 2025. (8)
Indicative Return
10% - 15%
According to the three projects' average rate of return declared by Jiangsu Xiuqiang Glasswork Co., Ltd., LONGi Green Energy Technology Co., and Risen Energy Co., Ltd, the rate of return for similar projects is 10%-15%.
LONGi Green Energy Technology's project investment payback period is about 7-8 years, with an internal rate of return of 11%. Jiangsu Xiuqiang Glasswork's after-tax internal rate of return of the BIPV module production line project is expected to be 21.39%. (8)
Risen Energy Co., Ltd: The rate of return for the project based in Jintan reached 14.8%. (15) According to the mean rate of return of projects from Jiangsu Xiuqiang Glasswork Co., Ltd., LONGi Green Energy Technology Co., and Risen Energy Co., Ltd, the rate of return for similar projects is 10%-15%.
Investment Timeframe
Medium Term (5–10 years)
According to Jiangsu Xiuqiang Glasswork Co., Ltd.'s declaration of a fixed increase in the formula, the static payback period of the BIPV module production line project is 6.56 years (after tax; construction period excluded). (8)
According to LONGi Green Energy Technology Co.'s BIPV building-integrated solution, the project investment payback period is about 7-8 years. (9)
Ticket Size
> USD 10 million
Market Risks & Scale Obstacles
BIPV
Impact Case
Sustainable Development Need
The construction industry's lifecycle carbon emissions accounted for 51% of China's total carbon emissions in 2018. Energy conservation in buildings is crucial to achieving the 2060 target. Development of BIPV can reduce building energy consumption and carbon emission. (17)
Gender & Marginalisation
With large revenue bases, large cities have the advantage of scaling up renewable energy and meeting emission reduction targets. However, insufficient funding and policy support are provided to small and medium-sized cities with fewer than one million population. (11)
Expected Development Outcome
As an innovative measure that integrates PV and buildings, BIPV can effectively promote energy conservation and emission reduction in the construction industry. Meanwhile, BIPV can solve the problem of land occupation for photovoltaic power generation since no additional land is needed.
Gender & Marginalisation
Promoting BIPV can improve people's accessibility to PV power generation so that renewable energy development in small and medium-sized cities can also be accelerated.
Primary SDGs addressed
7.2.1 Renewable energy share in the total final energy consumption
The share of non-fossil energy in China's primary energy consumption reached 15.9% in 2020. (13)
The "14th Five-year Plan" stated that the share of non-fossil fuel in China's total energy consumption should be increased to around 20%. (14)
Secondary SDGs addressed
Directly impacted stakeholders
People
Planet
Indirectly impacted stakeholders
People
Outcome Risks
BIPV-related industry standards are still relatively lacking. Particular attention should be paid to safety standards to prevent potential security problems like fire.
Impact Risks
The high cost of products and unsound standard system are major constraints to BIPV's development and application. (10)
Impact Classification
What
The outcome is very likely to be positive, important, long-term, and large-scale, as investments can improve electricity accessibility.
Impact Thesis
Integrating photovoltaics technology and building construction helps constructing high-quality green buildings, improving electricity access, reducing building carbon emissions.
Enabling Environment
Policy Environment
By 2025, renewable resources would account for 8% of the alternative to conventional energy used in buildings; 50% PV coverage rate on the roofs of newly constructed public buildings and factories should be reached. (22)
In 2022, NRDC and NEA released the "Opinions on Improving Institutional Mechanisms and Policy Measures for Green and Low-carbon Energy Transition": Improve the standard system for renewable energy application in buildings, and promote building integrated photovoltaic. (21)
In 2022, the Ministry of Housing and Urban-Rural Development issued the "14th Five-Year Plan for the Development of Building Energy Efficiency and Green Building": by 2025, the capacity of newly installed building PV should reach at least 0.5 billion kilowatts (50GW).
Financial Environment
On February 24th, 2021, NDRC, MOF, PBOC, CBIRC, and NEA issued a notice that stated several financial measures that support renewable energy industry. (25)
In 2020 Beijing Government: In 5 years, all photovoltaic building integration projects can receive a tax-inclusive subsidy of 0.4 yuan per degree of electricity; In 2021, Nanjing Government: BIPV subsidy policy that subsidizes renovation of existing buildings. (26)
Regulatory Environment
The renewable energy utilization rate should be no less than 10% in the design and use of nearly zero energy buildings in China. This will further promote the development of BIPV. (23)
"Technical specifications for lightning protection of building integrated photovoltaic systems", "Test method of solar PV system for curtain wall and skylight of building" and the "Acceptance specification of building integrated photovoltaic power systems" were published. (24)
"General code for energy efficiency and renewable energy application in buildings" by the Ministry of Housing and Urban-Rural Development requires that solar energy systems be installed in new buildings and detailed safety and function requirements be specified. (19)
Marketplace Participants
Private Sector
Sinopec, Arctech, Longi, Center International, Xiuqiang Glasswork, Sojo Electric, Fangda Group, Flat Glass Group, Hangxiao Steel Structure, etc.
Government
Fourteen provinces and municipalities, such as Jilin, Guangdong, Jiangsu, Xi'an, Beijing, etc., have already released their BIPV subsidy policies, with subsidies ranging from 0.3- 0.4 yuan per kWh and the upper limits varying from 1 to 3 million yuan. (18)
Target Locations
China: Shaanxi
China: Shandong
China: Gansu
China: Ningxia
China: Guizhou
References
- (1) State Council, 2021, Action Plan for Carbon Dioxide Peaking Before 2030
- (2) IRENA, 2019, Renewable energy: a gender perspective. https://www.irena.org/publications/2019/Jan/Renewable-Energy-A-Gender-Perspective
- (3) CQVIP, Renewable energy power generation through solar photovoltaic-recyclable and clean energy
- (4) National Energy Agency, 2021, Guiding Opinions on Energy-related Work in 2021, http://www.nea.gov.cn/2021-04/22/c_139898478.htm
- (5) China Central Television Business Channel, https://mp.weixin.qq.com/s/2ORooQlg9MDlzsbHGH5xww
- (6) Solarbe Global, https://news.solarbe.com/202107/30/342436.html
- (7) Arctech Solar Holding Co.,Ltd., Prospectus, https://pdf.dfcfw.com/pdf/H2_AN202008231400780691_1.pdf
- (8) 2021 Stock Prospectuses for A Share Offerings to Specific Targets (Draft), https://pdf.dfcfw.com/pdf/H2_AN202207291576682155_1.pdf?1659111449000.pdf
- (9) China Economic Net, http://finance.ce.cn/stock/gsgdbd/202103/08/t20210308_36364243.shtml?ivk_sa=1023197a
- (10)Ye Wei, How policy and market help BIPV ride the tailwind [N]. China High-Tech Industry Herald, 2021-11-08(016).
- (11) BIPV Online, https://mp.weixin.qq.com/s/BvnsPC64sbwETYoG-TWuPg
- (12) IRENA, https://www.irena.org/publications/2021/May/Renewable-Energy-Policies-for-Cities
- (13) National Energy Agency, http://www.nea.gov.cn/2021-03/30/c_139846095.htm
- (14) Xinhua News Agency, The Outline for the 14th Five-Year Plan for Economic and Social Development and Long-Range Objectives through the Year 2035, http://www.gov.cn/xinwen/2021-03/13/content_5592681.htm
- (15) Solarbe Global, https://news.solarbe.com/202008/13/329099.html
- (16) Solarbe Global,2020,Breakthrough BIPV "cold inside and hot outside" 100 billion blue ocean has challenges but also a bright future, https://news.solarbe.com/202009/01/329902.html
- (17) China5e, https://www.china5e.com/news/news-1127676-1.html
- (18) Sohu News, 2021, 14 provinces and municipalities issued policies on Building Integrated Photovoltaic (BIPV) https://www.sohu.com/a/505980030_121123904 "(19) Ministry of Housing and Urban-Rural Development, 2021, Notice on the Release of National Standard ""General code for energy efficiency and renewable energy application in buildings” https://www.mohurd.gov.cn/gongkai/fdzdgknr/zfhcxjsbwj/202110/20211013_762460.html"
- (20) Ministry of Housing and Urban-Rural Development, 2022, Notice on the Issuance of the "14th Five-Year Plan for the Development of Building Energy Efficiency and Green Building". http://www.gov.cn/zhengce/zhengceku/2022-03/12/content_5678698.htm
- (21) National Development and Reform Commission, 2021, Opinions of the National Development and Reform Commission and the National Energy Administration on Improving the Institutional Mechanisms and Policy Measures for Green and Low-carbon Energy Transition, https://www.ndrc.gov.cn/xxgk/zcfb/tz/202202/t20220210_1314511_ext.html
- (22) State Council, 2021, Notice by the State Council of the Action Plan for Carbon Dioxide Peaking Before 2030, http://www.gov.cn/zhengce/content/2021-10/26/content_5644984.htm
- (23) Ministry of Housing and Urban-Rural Development, Notice on publishing the technical standard for nearly zero energy buildings, https://www.mohurd.gov.cn/gongkai/fdzdgknr/tzgg/201905/20190530_240712.html
- (24) Forward Intelligence, https://www.qianzhan.com/analyst/detail/220/220418-810cfd55.html
- (25) National Development and Reform Commission, 2021, Notice of Encouraging the Intensified Financial Support to Promote the Sound and Orderly Development of Wind Power and Photovoltaic Power Industries, https://www.ndrc.gov.cn/xxgk/zcfb/tz/202103/t20210312_1269410.html?code=&state=123
- (26) Development and Reform Commission of Beijing, 2020, Notice on Further Support for the Development and Application of Photovoltaic Power Generation System, http://www.beijing.gov.cn/zhengce/zhengcefagui/202011/t20201119_2140267.html