BIPV Europe 2008: Frost and Sullivan

8/14/2019 BIPV Europe 2008: Frost and Sullivan

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The Future of Solar Technology in Buildings: Fastand Strong Growth When Recession is Over

Hammam Ahmed, Research AnalystAkhil Sivanandan, Research Analyst

Environment and Building TechnologiesMay 14, 2009


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Focus Points

European Market for Solar Technology in Buildings

Market SegmentationMarket DefinitionsKey Market Forces Drivers, Restraints and ChallengesMarket Revenue Projections and TrendsTechnological TrendsMarket TrendsCompetitive Analysis

Current and Upcoming ResearchQuestion and Answer


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Solar Technology in Buildings

BTech Products

HVACLightingRefrigerationSmart MaterialsCommunication technology

Services Energy management

ESCOs Performance contracting

Consulting Retro-Fitting

Building ControlsBuilding Automation

Home AutomationIntegration

Lighting ControlsHVAC Controls

Micro-Renewables

Wind

Solar PV/BIPV

Heat PumpsSolar Thermal

GreenBuildings

SmartBuildings Intelligent

Buildings

Biomass


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Residential Commercial :

Hotels, restaurants and bars Shops Offices Warehouses

Public : Public buildings, airports, monuments etc.

Others Industrial, off-grid.

Market Segmentation

Application Segmentation Regional Segmentation

GermanyFranceItalySpainUnited Kingdom (UK)Scandinavia (Finland, Sweden, Denmark andNorway)Benelux (Belgium, the Netherlands andLuxembourg)Rest of Europe (Greece, Portugal, Central

and Eastern European Countries)

Technological Segmentation

Building Integrated Photovoltaics Solar Thermal Systems


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Solar Thermal Systems (STS) Definitions

Solar thermal systems are systems that are designed to produce hot water for heating and/or sanitation.

Systems can be installed to serve a range of buildings from single domestic proprieties to large scale districtheating.

A STS system consists of the following components :

Solar Thermal Collector / Solar Panel

Water Storage Tank / hot water cylinder

Controller / Regulator system

Pump

Pipe Work

There are two main types of solar thermal systems often referred to as passive and active or naturalcirculation and forced circulation, the main difference lies in whether the systems rely on pumps oronly thermodynamics to circulate water through the systems.


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Building Integrated Photovoltaics (BIPV) Definitions

For the purposes of this study, BIPV systems are defined as only those particular PV installations that areintegrated into the envelope of a building, this serving a secondary purpose such as a roof, facade, shadingsystem etc.

The market revenues have been defined from the module manufacturer downwards. These include solar module,inverter and balance of system (BOS) components manufacturers.

A BIPV system consists of the followingcomponents:

PV array (PV module and waterproofingelements)PV combiner or junction boxGrid inverterAn import/export meter (used in the case of netmetering or feed-in tariff implementation)

Grid connection.


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Top Market Challenges

Creating uniformstandards for systems

Increasingexpertise ininstallation andmaintenance

Overcoming lowpublic andgovernmentawareness

EUROPEAN

SOLAR IN

BUILDINGS

4

Heavy reliance onGovernment support

Need to develop lowcost solutions to suitcurrent financialclimate

Overcomingconsumer mistrustdue to sale of

substandard orpoorly installedproducts


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Force Field Analysis

Total Building Solar Market: Key Drivers and Restraints (Europe), 2008

D r i v er s

R e s t r ai n t s

D r i v er s

R e s t r ai n t s

Regulations andincentives

Long term impact

Short term impact

Stagnation inconstruction

sector

Lowawareness incertainregions

Environmentalconcerns Facilitated

credit access

Volatility of Energy Prices

High initialinvestment

Currentfinancial

crisis


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STS

Solar Thermal Systems Market Analysis


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Drivers and Restraints

Drivers

Government support New entrants from adjacent sectors Mature technology

Restraints

Disruption in financial incentive schemes Lack of end user awareness Reluctant installers


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-

500

1,000

1,500

2,000

2,500

2006 2007 2008 2009 2010 2011 2012 2013 2014

R e v e n u e s

( M i l l i o n

)

-20%

-10%

0%

10%

20%

30%

40%

50%Revenues Revenue growth rate

Revenue Forecasts

In the first 3 quarters of 2008 the market performed exceptionally well particularly in Germany

The market for STS was estimated to be worth 958.9 million in 2008, and is expected to grow at 15 % CAGR between 2008and 2014.

The market is forecast to slowdown throughout 2009 and 2010 but will take up speed between 2011 and 2014.

This forecast is based on the assumption that the global economy will recover in 2010.


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End user Analysis

Single Family houses:The largest market opportunity sector is in small domestic single-family systems which held approximately 88.0% of the marketshare in 2008.

Large Collective STS:

The commercial and large collective systems sector is likely to expand but will not be able to grow as much as the small domesticsystems segment. This is based on lower levels of opportunity even though commercial systems are generally larger in size.

Other sectors:

Industrial and district heating accounts for a very small percentage of the market.

87%

10%1%

2%

Large collective

District heating

A/C and industrial processheatingSTS for single familyhouses


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Supply Chain and Distribution Network Analysis

Solar thermal system manufacturers

Kits manufacturers

Construction companies

OEMs

End-User / Customer

CollectorsManufacturers Pumps manufacturers

Storage tankmanufacturers

Wholesalers / Distributors

Renewable energyFirmsUtilities

Traditionalinstallers

Professional solarinstallers

Note: The width of the arrow denotes the importance of the channel

Total STS Market : Supply Chain (Europe), 2008


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Competitive Trends

Very fragmented market, there are more than 1000 market participants in Europe with small marketshares.

Tier 1 comprises of the largest 2 players in the market namely Bosch and Viessmann. The middle tier comprises companies that are leaders in regional markets such as Sonnenkraft which

is the market leader in Italy, or companies that are present throughout Europe such as Wagner. The third tier comprises a large number of local players in each country operating at a local level, it

also comprises large players from adjacent markets, such as traditional heating systems, who arerelatively new entrants to the STS market such as Riello in Italy.

Tier 2Sonnenkraft, Wagner & co, Isofotn, Vaillant,

Paradigma

Tier 3Genersys Plc (UK), HELIONAL (Greece), Solahart,(EU), Riello (Italy), Dimas

(Greece) Termicol (Spain), CS COSTRUZIONI SOLARI (Italy), Clipsol (France),Helioakmi, (Greece) , Schco (Germany), AES Solar (UK), Chromagen (Spain)

Tier 1Bosch, Viessmann


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Conclusions

The market relies a great deal on governmental subsidies and financial incentives.

The largest market opportunity sector is in small domestic single-family houses.

Currently professional installers are the most significant group in the market, they realise the highestprofit margins and are still considered the largest buyer group.

Over the past few years, the market attracted a large number of participants from neighboring sectorssuch as energy efficiency firms, utilities, conventional heat equipment suppliers, tiling and roofing

professionals, faade and construction companies. These new entrants are transforming the distributionnetwork and increasing the overall market penetration level.

Independent solar thermal system manufacturers are losing market shares to large OEMs and themarket is moving rapidly towards concentration.

In order to diversify the distribution channels and target a wider end user segment, manufacturersshould focus on providing training conventional installers and plumbers.


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BIPV

Building Integrated Photovoltaics Market Analysis


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Drivers and Restraints

Drivers

Stable feed in tariff in some regions Increasing awareness about BIPV Facilitated credit access

Restraints

Cap on installed capacity in certain regions Excessive bureaucratic procedures in some countries Misunderstanding of capability and application of BIPV


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End User Analysis

Commercial Sector:

The sector has experienced high growth over the last few years, even though it has been overshadowed by the residential sector.The office and warehouse sector has contributed significantly to this sector.

Residential Sector:

Supportive legislation in France, Italy and Germany favoring smaller BIPV systems have been a huge boost to this market. Thesector accounted for 55% of the market in 2008. The current economic crisis will result in a slowdown in this sector over the nextcouple of years despite robust support from governments.

Other sectors:

Industrial and off-grid will experience steady growth but will keep losing market share over the forecast period.

55%

15%

30%

Residential

Commercial

Others


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Supply Chain and Distribution Network Analysis

Total BIPV Market : Supply Chain (Europe), 2008


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Technological Trends

Crystalline silicon is the most used PV cell technology. Other technologies like thin film and cadmiumtelluride account for less than 10 percent of the total market. Crystalline Silicon : Between poly-crystalline and mono-crystalline silicon, at present the market share

is slightly in favor of mono-crystalline as they are considered more aesthetically appealing by the endconsumer. The high efficiency of crystalline technologies compared to other PV technologies and thefact that they are cheaper make them the dominant technology.

Thin Film : Thin film PV cells are mostly used in high end systems where aesthetics are important. Asa result they have found a market in prestige installations in offices and public showcase projects.

New Technologies : Cadmium telluride, Copper indium gallium selenide, nano-crystalline cells andquantum dot based cells are some of the new PV technologies that are emerging in the market.

Share of PV technologies in BIPV

50% 40%

9%1%

Mono crystallinePoly-crystallineThin-filmOthers

Unlike the STS market, the technological landscape in BIPV is far from established and is constantly changing


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Competitive Trends

Very fragmented market, split between large global manufacturers, none with more than 10%market share

Large presence of Japanese and Chinese manufacturers Brand recognition and reputation are important in the commercial sector

Tier 2Solarworld, Unisolar, Yingli, Schueco, Schott

Tier 3SMA, Fronius, Sputnik, Conergy, Mitsubishi, Solar watt, Tenesol, BP Solar, Solar

Century, Trina, Gaia Solar, Solon etc.

Tier 1Sharp, Suntech, Kyocera


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Conclusions

The market is highly reliant on governmental subsidies and financial incentives.

The residential market will be hardest hit by the recession, but with most subsidies aimed at this market,will bounce back when the market recovers. Public sector expected to weather the recession better due tolarge showcase projects as part of green incentives by various governments.

High level of uncertainty for pricing and module availability in the coming years with green incentives inUSA and China expected to lead to a huge demand for solar PV panels, which might lead to a supplyshortage in Europe.

Huge potential for BIPV in markets like Italy and Greece, these markets are likely to become moreimportant in the next few years.

A large number of new players from the solar PV market especially from Japan and China are testing thewaters due to high subsidies in regions like Italy, Spain and France. However, this trend might decrease inthe short term until concrete commitments are made in the BIPV sector in Europe or the market recovers.

PV manufacturers have been vertically integrating in order to secure their feedstock supplies and tocreate new distribution channels in order to increase geographic spread and penetration.


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Related Research

Strategic Assessment of Growth Opportunities in the European Green BuildingsMarkets

BIPV Markets in North and Southeast Asia European Solar Thermal Heating Systems Market European Heat Pumps Market

Climate Change in Europe Investment Opportunities

Impact of Renewable Energy on the European HVAC Market European Offshore Wind Energy Market

Upcoming Research


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For Additional Information

For Additional Information

Chiara CarellaHead of Corporate CommunicationsEurope, Middle East & Africa

+44 (0) 207 [email protected]

Juliet ShawSales DirectorEnergy and Environment

0044 (0) 20 7343 [email protected]

John RaspinDirectorEnergy and Environment0044 (0)20 7915 [email protected]

Documents

BIPV Europe 2008: Frost and Sullivan