Business Models for the Integrated Use of Photovoltaics in

International Journal of Architecture Engineering and ConstructionVol 4 No 3 September 2015 151-158

Business Models for the Integrated Use of

Photovoltaics in Buildings

Patrick T I Lam1lowast Jack S Yu1 and H X Yang2

1Department of Building and Real Estate The Hong Kong Polytechnic University Hong Kong China2Department of Building Services Engineering The Hong Kong Polytechnic University Hong Kong China

Abstract Climate change and the scarcity of natural resources have caused human being to explore anddevelop sustainable measures in many facets of life With advent in the use of renewable energy push andpull factors emerge to provide viable solutions to previous bottleneck situations such as market penetrationand financability In the case of photovoltaic applications apart from solar farms on ground increasinglybuildings are targeted as the venues for the distributed type of solar installations Government policies andutility companies are also paving the way for increased opportunities of grid connection so that solar energy isbecoming part of the energy supply network For buildings photovoltaic applications include roof-top facadeand sun-shaders The latter two are often referred to as Building Integrated Photovoltaic (BIPV) whereby solarequipment is incorporated into buildings during the erection process Initially the market for these applicationswas based on customer ownership but business models have emerged and diversified Nowadays third partyownership is increasingly common with power purchase agreements and leases forming the main contractualframework on the demand side On the supply side much horizontal and vertical integration have taken placeproducing value chains which have increased efficiency and cost effectiveness In this paper the frameworkas proposed by Osterwalder and Pigneur (2010) will be used to analyse the value proposition cost structurerevenue stream etc of recent business models Examples of successful integration in the international arenawill be given whereas local constraints will be discussed

Keywords Photovoltaic buildings business models integration US China Hong Kong SAR

DOI 107492IJAEC2015015

1 INTRODUCTION

The building sector accounts for more than one-third ofthe global energy consumption and is a major source ofgreenhouse gas (GHG) emissions (IEA 2012) With thedevelopment of renewable energy technology (RET)the application of renewables alongside energy efficien-cy improvement in the building sector has become amainstream green effort to mitigate the adverse effectsof climate change For example approximately 1 ofthe global electricity generation is available from pho-tovoltaic (PV) (IEA 2015) Part of this market is con-tributed by the building sector in the form of build-ing integrated PV (BIPV) On one hand the buildingsector provides an opportunity for growth of the RETindustry On the other hand the fruitful market wouldintensify the competition in the industry becauseof an

increasing number of new comers By developing fea-sible business models (BMs) the RET industry wouldachieve at least a financially sustainable business con-dition and would thrive in the competition given theright policy environment In this paper the modernbusiness models for the PV market in the building sec-tor and how related regulatory and environmental poli-cies are shaping the models are investigated Examplesof BMs in the United States and China are presentedto further illustrate the integration mechanisms

2 BUILDING BLOCKS OF AldquoBUSINESS MODELrdquo

Teece (2010) suggested that the essence of a BM isto define ldquothe manner by which the enterprise deliv-ers value to customers entices customers to pay for

Corresponding Author Email bsplampolyueduhk

Lam et alInternational Journal of Architecture Engineering and Construction 4 (2015) 151-158

value and converts those payments to the profitrdquo De-mil and Lecocq (2010) identified two approaches of BMwhich are the ldquostatic approachrdquo and ldquotransformationalapproachrdquo which are complementary The former aimsto demonstrate the relationship between different con-figurations of BM components and their performancewhile the latter approach focuses on how to evolve inorganization or the BM itself Zott et al (2011) sum-marized that ldquoin the technology and innovation man-agement field business model is mainly seen as a mech-anism that connects a firmrsquos (innovative) technologyto customer needs andor to other firm resources (egtechnologies)rdquo According to the above concepts BM isdefined here as a system consisting of the interactionsamongst various stakeholders and business elements inthe PV or BIPV markets resulting in the generation ofrevenue Besides this system can be adapted to suitthe dynamic PV market In order to clearly explainthe business models in the following sections the BMCanvas as proposed by Osterwalder and Pigneur (2010)is adopted A template is shown in Figure 1

The canvas is composed of nine building blocks Anenterprise would first target one or several customersegments Then it would seek to solve the problemsencountered by the customers and to fulfil their de-sires with value propositions Those value propositionsare delivered to the customers via communication dis-tribution and sales networks called business channelsRelationships would be established and maintained be-tween the enterprise and the customers The enterprisewould conduct a serial of key activities to offer anddeliver the enterprisersquos value by using or consumingkey resources Key partners can be resource suppliersor the parties who obtain outsourcing works from thebusiness enterprise Eventually the successful offers ofvalue propositions to the customers result in revenuestreams All costs associated with operating the busi-ness are covered in the cost structure

Although the party for which the BM is designed isnamed as ldquothe enterpriserdquo by Osterwalder and Pigneurin the BM canvas in the building sector that party canbe either an owner of an existing building or a group ofowners a property developer of a new building or an

energy service company which has entered into an en-ergy supply contract with the owners etc Thereforean enterprise is not necessarily a ldquobusiness firmrdquo in thiscontext

3 BUSINESS MODELS FOR THE KEYSTAKEHOLDERS OF PV PROJECTS

31 Business model for PV manufacturers

PV manufacturers produce and sell PV systems to ei-ther BIPV installers under supply contracts or proper-ty owners directly Upon selling a system to the pur-chaser the manufacturer usually provides a warrantyof the quality of performance according to laboratory-tested standards Customers can be reached by adver-tisement exhibition of products submission of tendercold-calling and contacting the existing customers Inorder to maintain competitiveness of the enterprise thebusiness scope of the manufacturers needs to includeproduct innovationThere are plenty of resources required by the man-

ufacturers Manufacturing facilities and raw materials(eg silicon wafers) are indispensable to the produc-tion of BIPV system Besides manufacture of PV isan energy intensive industry and thus a stable andmass energy supply would be essential Also natu-ral resources such as land and water supply would benecessary for the construction of building facilities andfor cooling purpose respectively Manpower is anotherkey resource in the production and operation processExpertise in PV production technology would be es-sential and this is supported by research and develop-ment (RampD) activities which reinforce the competitiveposition of the enterpriseThe numerous key resources entail a large amount

of capital costs and running costs The manufacturerswould therefore need to raise capital for example bygetting bank loan to finance the business That meansthe manufacturers have to pay back the loan togetherwith loan interest For the manufacturers who exporttheir products overseas they would bear a currencyrisk For instance if the currency rate of a country

Figure 1 Business model canvas (Osterwalder and Pigneur 2010)

Figure 2 Business model for PV manufacturers

in which the manufacturing site is located rises theproduction costs borne by the manufacturers would in-crease

32 Business model for PV system in-stallers

The key resources required by PV system installers inthis business model mainly consist of manpower (ieexperts in energy audit installation and maintenance

of PV systems) and PV equipment if the systems areretailed by the installers The installers sell PV sys-tems to the property owners who wish to live a greenlifestyle and save on energy bills and install the sys-tems to their properties The installers may also pro-vide energy consulting services and subsequent tailor-made PV plans to the owners In return the installersearn their consultant fees and installation fee from theowners and profit by selling PV systems Associated

Figure 3 Business model for PV system installers

with the existing customer base PV installers wouldexplore new customers by putting advertisements innewspapers and magazines displaying their productsin exhibitions of PV systems cold-calling the poten-tial customers and submitting tenders for PV projectsThe costs borne by the installers are composed of themanpower (eg experts in energy audit PV technolo-gy and marketing) the cost of PV system supplied bymanufacturers sub-contractorsrsquo costs and marketingas well as company overheads such as insurancesProperty occupiers are the major customers in the

business model of BIPV installers Meanwhile the rev-enue of the installers is mainly the installation fee Inthis sense the revenue can be raised if the demand forPV system increases ie when more property occu-piers are willing to install the systems in their proper-ties

33 Business model for energy performancecontractor

The feature of energy performance contract (EPC) isthat property occupiers are not required to bear theupfront cost of PV projects Moreover the contrac-tors would be responsible for maintaining the systemduring the EPC period This would mitigate the finan-cial barrier encountered by the occupiers in the initialand operational stage of the PV project In returnthe EPC contractors would charge the occupiers in thetwo alternative ways According to the EPC the con-tractor would share the monetary saving on energy billwith the property end-user during the contract periodor the occupier would pay a fee in exchange for thecontractorrsquos guarantee of the power generation perfor-mance of the PV systems Depending on energy policythe contractors may obtain a subsidy from government

34 Business model for PV project devel-oper

A PV developer solicits building owners for installingPV systems in their premises either by renting theirrooftops or ground space He also lines up financiersto provide finance for his equipment purchase and pay-ment to installers His other costs include that of hiringconsultants maintenance and interest on loans Hisrevenue is realised by selling electricity to the buildingowners on a long term basis and if there is surpluspower by selling it to utility companies accepting con-nections to their grids

4 MECHANISMS FOR POWERPURCHASE AGREEMENT (PPA)AND LEASE OF PV SYSTEM

Generally developers offer free installation of thePV system (eg solar array on property roof) tocustomers In return the customers are charged during

the contract period (say 25 years) in two ways UnderPPA customers would pay on the basis of monthlyusage of energy generated from the PV system Al-ternatively customers would pay a fixed rent month-ly to the developers for leasing the systems The so-lar energy price under PPA and the rent for leasingthe system are usually slightly lower than the energyprice offered by power utilities which mainly generateelectricity by burning fossil fuel Therefore assum-ing the energy consumption of the customers remainunchanged the electricity bill would become cheaperby mixing the use of energy from the PV system andfrom the power grid Customers can choose to part-ly or fully prepay the solar energy bill or rent to thedevelopers That would result in a lower subsequentmonthly payment than ldquono down paymentrdquo In gen-eral PPA and the lease are similar measures whichensure the customers with no (or at least low) upfrontcost of the system The major difference between thetwo measures is that customers only need to pay theset energy rate monthly under PPA regardless of theproductivity of the system on other hand the leasee ofthe system has to pay the agreed rent under a leasewhile the productivity of the system can be variablebecause of weather change or the cleanliness of the so-lar panel The ownership of the PV system belongsto the developer in both circumstances while the cus-tomers have the right to purchase the system during orafter the contract period The developer is responsiblefor maintenance and guarantee on the performance ofpower generation of the system

5 INCENTIVES ON PHOTOVOLTAICSUNDER ENERGY POLICIES

51 The United States

In February 2009 President Obama signed the Amer-ican Recovery and Reinvestment Act of 2009 (the AR-RA) which was aimed at stimulating the economy ofthe United States after the recession in 2007 The AR-RA provides a series of financial stimuli such as tax re-bate and bonus depreciation to encourage investmentsin various sectors including renewable energy US $90billion in public spending and tax expenditures in sup-port of clean energy activities was provided under theARRA in which more than US $25 billion contributedtowards renewablesIn order to encourage financial institutions and cor-

porate investors to fund solar projects the Invest-ment Tax Credit (ITC) is provided under the ARRAITC is a corporate tax credit in particular for the in-vestment in renewables installation Generally creditequalled to 30 (the policy valid till 2016) of the invest-ment costs of solar systems including equipment andlabour would be granted by the federal governmentIn addition to ITC the ARRA used to provide The1603 Treasury Program (the 1603 Program) which ex-

pired on 31 December 2011 Instead of receiving thetax credit solar project developers could choose to re-ceive grants from the federal government through the1603 Program which was then equal to 30 of theproject cost The developers could further enjoy ex-tra tax savings under five-year Modified AcceleratedCost Recovery System (MACRS) depreciation underthe Tax Reform Act of 1986 together with an addi-tional 50 first year bonus depreciation (expired on 31December 2013) The returns of solar projects wouldbe increased through the above programs by such taxtreatment Besides the tax incentives help the solardevelopers to raise capital by partnering with investorsespecially those who have large tax liabilities (ie taxequity investors)For the electricity end-users the net energy meter-

ing policy allows excess energy generated by PV sys-tem feeding into the grid At the end of the month the

net excess generation would be credited to the monthlyenergy bill of the end-users at retail value If the end-users consume energy from the electricity grid theysimply pay the power utilities for the net energy usageIn addition to crediting on energy bills the end-usersmay also participate in carbon offset programme Pow-er utilities are mandatorily required to involve a certainamount of renewables in their energy mix in accor-dance with the statersquos Renewable Portfolio Standard(RPS) requirement These power utilities are allowedto purchase Renewable Energy Credits (RECs) whichequal to the amount of renewable energy generation(eg 1 REC = 1 MWh of solar energy) for complyingwith the RPS requirement Besides the compliancemarket energy consumers may voluntarily purchaseRECs for an eco-friendly lifestyle or fulfilling corporatesocial responsibility (CSR) Since Solar RECs (SRECs)would be granted to the system owners (the develop-

Figure 4 Business model for Energy Performance Contractors

Figure 5 Business model for PV project developer

ers in case of third party ownership) for solar powergeneration the system owners can sell credits in thevoluntary or compliance REC market Such revenuescan shorten the payback periods of the PV systemsThe prices of SREC vary amongst different states dueto the different market status and RPS requirementsFor example in the SREC auction closed on 1 May2014 the clearing prices by vintage varied from US$53 in Pennsylvania to US $482 in Washington DC foreach SREC representing 1000 kWh of solar generation(SRECTrade 2014)The tax benefits including ITC and tax deprecia-

tion and cash grant for solar projects provided underthe US energy policies provide financial incentive toprivate organisations and financial institutions to in-vest in PV projects The design of the PPA and leasecontracts can allow the system owners to enjoy thetax benefits Under the rules of the ITC and the 1603Program the tax credit would be recaptured partiallyif there is a change of system ownership in five yearssince the placed-in-service date Since the ownership ofthe system belongs to the EPC contractors under thetwo business approaches (depending on the contractclause) institutional investors can form a partnershipwith the developers to enjoy those financial benefitsFigures 6 and 7 show the benefits and challenges posedby the PPA and lease arrangements on the buildingowners and solar developers

52 China

In line with the overall policy directive to increase theuse of renewable energy and coupled with the anti-dumping measures taken by Western countries on Chi-narsquos export of solar equipment the domestic market ofphotovoltaics in China has been stimulated since 2014after a period of over-capacity NEA (2013) set thetargeted installation to 35 GW by 2015 comprising 16GW ground-stations and 19 GW of distributed PVThe Renewable Energy Law of 2006 stipulates com-

pulsory purchase of renewable energy by grid compa-nies The high powered National Development andReform Commission and its local delegates are the rel-evant authorities for approving all solar projects bydomestic and overseas parties at various levels (DLAPiper 2013) China has implemented a Feed-in Tar-iff (FIT) policy (payment by utility organizations foraccepting renewable energy generated by independentowners into the grid) for renewable energy since 2003for wind power but the FIT for photovoltaics waslow by international standards (Lo 2014) until recentlyThe previously single FIT across the country also failedto take account of regional differences in the cost ofproducing solar energy A series of reforms took placesince 2013 and most notably the recent promulgationsvia the National Energy Administrationrsquos TemporaryAdministration Rules of Solar PV Power Generation

Plants 29 August 2013 and another one on the im-plementation of distributed type of photovoltaic pow-er generation (Document No 433 of 2013) provide anumber of push and pull directives on the rapid de-velopment of this sector Basically building ownersare encouraged to generate and utilize solar power fortheir own consumptions in its immediate vicinity andif there is surplus electricity the procedures of feedingit into state grid is made more efficient and financial-ly rewarding Apart from the basic FIT national-widetenable for 20 years each province or local governmentmay add onto the rate according to its own conditionsIn the tax incentive aspects the Corporation Tax

Law 2007 Clause 87 provides that corporations car-rying out public infrastructure projects in accordancewith state policy may enjoy tax exemption on its prof-its in the first 3 years and 50 reduction of corporateprofit tax from the 4th to the 6th year Environmen-tal businesses complying with the law may also explorethe benefit of this incentive In order to set benchmarksand good examples for distributed PV installations atthe regional level 18 demonstration zones have beenearmarked all over the country totalling 18 GW incapacity slated for completion in 2015PV is not only meant for the affluent cities since

there are plans to provide free PV installations foragricultural villages and small families on a distributedbasis The asset right and income arising from powersale will belong to the families with less means Pilotprojects are being tested out in 6 provinces across thecountry For example it is estimated that by 20206000 poor families will obtain such a stable income inthe Anhui province (CCID Think Tank 2015)

6 INTEGRATION OF PHOTOVOLTAICENTERPRISES

In the implementation of the abovementioned businessmodels there is a trend towards integration of the up-per and lower parts of the photovoltaic value chainThis is partly due to the perceived benefits of improve-ment in efficiency and bigger capture of market shareand partly due to the need to consolidate resourcesfor attracting finance Although small enterprises maystill find it flexible and adaptable in serving a limitedmarket segment they are vulnerable to the adverse ef-fects of business cycles and have little bargaining pow-er The need to utilize third party finance means thatthe cash flow stream must be robust enough Both theUS and China have gone through this wave of consol-idation in their PV industry In the wake of financingengineering such as securitization of solar assets thisis almost certainly an inevitable moveFor PV enterprises they may either adopt a verti-

cal integration or horizontal integration approach Inthe former the up-stream manufacturers may mergewith installers to enable better control of RampD supply

Figure 6 Benefits and challenges of PPALease to property owners

Figure 7 Benefits and challenges of PPALease to solar developers

quality and workmanship standards in their productsand services and achieve synergy of costs and marketIn the down-stream of the value chain PV develop-ers may line up with installers and EPC contractorsto provide total package solutions Investors financersand insurers may join the conglomerates to meet thefunding and risk mitigation requirements SolarCityin the US is a good example of this type of verticalintegration

In the latter firms which are in related businessesmay find a niche in combining their production facili-ties For example Singyes Solar in China had its initialstrength in curtain wall manufacturing and installa-tion and spearheaded into the BIPV market since 2007

and now has expertise in thin film PV technology Ithas been listed in the Hong Kong Stock Exchange totap into an international capital market for expansion

61 Situation in Hong Kong

Hong Kong Special Administrative Region (Hong KongSAR) at the southern part of China has a hilly land-scape with a total land area of only about 1100 km2Weather condition is sub-tropical The urban area isdensely occupied with high-rise buildings of stagger-ing heights Although there is a growing concern forimproving energy efficiency and increase the share ofclean energy (mainly through the higher use of gas-firedplant and importing nuclear energy from the main-

land) a minor portion (at most a target of 3-4) ofit is expected to come from renewable energy such assolar and wind For solar plants some efforts are beingmade by the government in public buildings in utiliz-ing their roof-tops such as the Headquarter buildingof the Electrical and Mechanical Services Department(a 350 kW installation) In the private sector mostof the installations are for demonstration and educa-tional purposes (eg roof-tops of schools) Roof-topsin Hong Kong are heavily occupied by water tanksbuilding services plant and more recently vegetatedroof In addition despite the falling cost of PV panelsthe cost of supporting structures is relatively high inHong Kong due to the mandatory wind code require-ments for building structures and attachments to resistwind loads up to almost 4kPa at a building height of500m (about the height of the International CommerceCentre - currently the tallest building in Hong Kong)For typical 30-storey tall buildings the wind load re-sistance requirement is about 286 kPa (similar to theminimum imposed load on an office floor)Technological research on PV and related science is

progressing by academic institutions utility compa-nies and at the Science Park but business models arefar less proliferated compared with the mainland andthe US and at a similar city level Singapore (wherePV developers are actively pursuing projects in publichousing) This is due to the overall lack of incentivesand regulations driving the use of renewable energy

7 CONCLUSION

In our quest to mitigate the problematic effects of cli-mate change the use of renewable energy in lieu offossil fuel is a plausible solution Yet to enable theuse of renewable energy to be sustainable viable busi-ness models must be implemented In the case of solarenergy their applications in buildings may be mak-ing use of roof-tops facades and other projecting fea-tures such as canopies and sun-shaders The seamlessand widespread integration of these ldquosolar surfacesrdquowith PV modules or thin film cells may be achievedthrough technological advancement and business in-genuity Currently successful business models haveemerged through the creation of value for customersmanaging resources through team-working with theright partners under a well-proven contractual relation-ship and generating revenues for sustained profitabilityEPC PPA and PV leasing as discussed in this paperare good examples To make these business modelsviable government incentives or to some extent regu-latory supports should be made available at the initialstage but with economy of scale and improved pro-duction efficiency being factored in grid parity is being

achieved in many places For example FIT and tax re-bates in the US and Germany have shown a decliningtrend when the business models flourish It is high timefor urbanized cities such as Hong Kong SAR to reflecton the success in other countries and work on businessmodels perhaps in conjunction with China mainlandwhere much progress is being made in the use of PV inbuildings

ACKNOWLEDGEMENTS

The work described in this paper was fully support-ed by a grant from the Central Research Allocationof the Hong Kong Polytechnic University (Project noG-YL15)

REFERENCES

CCID Think Tank (2015) White Paper for theDevelopment of the Photovoltaic Industry Avail-able at lthttpwwwccidthinktankcomgt (accessed2062015)

Demil B and Lecocq X (2010) ldquoBusiness modelevolution In search of dynamic consistencyrdquo LongRange Planning 43(2) 227ndash246

DLA Piper (2013) Asia Pacific Projects Up-date Solar PV Projects in China Available atlthttpwwwdlapipercomgt (accessed 552015)

IEA (2012) ldquoTransition to sustainable buildings Stratlegies and opportunities to 2050rdquo Report no Inter-national Energy Agency Paris France

IEA (2015) ldquo2014 snapshot of global pv markets Pho-tovoltaic power systems programrdquo Report No Re-port IEA PVPS T1-26 International Energy Agen-cy Paris France

Lo K (2014) ldquoA critical review of Chinarsquos rapidly de-veloping renewable energy and energy efficiency poli-ciesrdquo Renewable and Sustainable Energy Reviews29 508ndash516

NEA (2013) National Energy AdministrationAvailable at lthttpwwwneagovcngt (accessed242014)

Osterwalder A and Pigneur Y (2010) Business Mod-el Generation A Handbook for Visionaries GameChangers and Challengers Wiley

SRECTrade (2014) SREC Pricing Update and AuctionResults Available at lthttpwwwsrectradecomgt(accessed 209 2014)

Teece D (2010) ldquoBusiness models business strategyand innovationrdquo Long Range Planning 43(2) 172ndash194

Zott C Raphael A and Lorenzo M (2011) ldquoThebusiness model Recent developments and future re-searchrdquo Journal of Management 37(4) 1019ndash1042

Introduction

Building Blocks of a ``Business Model

Business models for the key stakeholders of PV projects

Business model for PV manufacturers

Business model for PV system installers

Business model for energy performance contractor

Business model for PV project developer

Mechanisms for Power Purchase Agreement (PPA) and Lease of PV system

Incentives on Photovoltaics under Energy Policies

The United States

China

Integration of Photovoltaic Enterprises

Situation in Hong Kong

Conclusion

value and converts those payments to the profitrdquo De-mil and Lecocq (2010) identified two approaches of BMwhich are the ldquostatic approachrdquo and ldquotransformationalapproachrdquo which are complementary The former aimsto demonstrate the relationship between different con-figurations of BM components and their performancewhile the latter approach focuses on how to evolve inorganization or the BM itself Zott et al (2011) sum-marized that ldquoin the technology and innovation man-agement field business model is mainly seen as a mech-anism that connects a firmrsquos (innovative) technologyto customer needs andor to other firm resources (egtechnologies)rdquo According to the above concepts BM isdefined here as a system consisting of the interactionsamongst various stakeholders and business elements inthe PV or BIPV markets resulting in the generation ofrevenue Besides this system can be adapted to suitthe dynamic PV market In order to clearly explainthe business models in the following sections the BMCanvas as proposed by Osterwalder and Pigneur (2010)is adopted A template is shown in Figure 1

The canvas is composed of nine building blocks Anenterprise would first target one or several customersegments Then it would seek to solve the problemsencountered by the customers and to fulfil their de-sires with value propositions Those value propositionsare delivered to the customers via communication dis-tribution and sales networks called business channelsRelationships would be established and maintained be-tween the enterprise and the customers The enterprisewould conduct a serial of key activities to offer anddeliver the enterprisersquos value by using or consumingkey resources Key partners can be resource suppliersor the parties who obtain outsourcing works from thebusiness enterprise Eventually the successful offers ofvalue propositions to the customers result in revenuestreams All costs associated with operating the busi-ness are covered in the cost structure

Although the party for which the BM is designed isnamed as ldquothe enterpriserdquo by Osterwalder and Pigneurin the BM canvas in the building sector that party canbe either an owner of an existing building or a group ofowners a property developer of a new building or an

energy service company which has entered into an en-ergy supply contract with the owners etc Thereforean enterprise is not necessarily a ldquobusiness firmrdquo in thiscontext

3 BUSINESS MODELS FOR THE KEYSTAKEHOLDERS OF PV PROJECTS

31 Business model for PV manufacturers

PV manufacturers produce and sell PV systems to ei-ther BIPV installers under supply contracts or proper-ty owners directly Upon selling a system to the pur-chaser the manufacturer usually provides a warrantyof the quality of performance according to laboratory-tested standards Customers can be reached by adver-tisement exhibition of products submission of tendercold-calling and contacting the existing customers Inorder to maintain competitiveness of the enterprise thebusiness scope of the manufacturers needs to includeproduct innovationThere are plenty of resources required by the man-

ufacturers Manufacturing facilities and raw materials(eg silicon wafers) are indispensable to the produc-tion of BIPV system Besides manufacture of PV isan energy intensive industry and thus a stable andmass energy supply would be essential Also natu-ral resources such as land and water supply would benecessary for the construction of building facilities andfor cooling purpose respectively Manpower is anotherkey resource in the production and operation processExpertise in PV production technology would be es-sential and this is supported by research and develop-ment (RampD) activities which reinforce the competitiveposition of the enterpriseThe numerous key resources entail a large amount

of capital costs and running costs The manufacturerswould therefore need to raise capital for example bygetting bank loan to finance the business That meansthe manufacturers have to pay back the loan togetherwith loan interest For the manufacturers who exporttheir products overseas they would bear a currencyrisk For instance if the currency rate of a country

Figure 1 Business model canvas (Osterwalder and Pigneur 2010)

52 China

7 CONCLUSION

ACKNOWLEDGEMENTS

REFERENCES

Introduction