Channel Problems Keep BIPV Out of the Money

Building Integrated Photo Voltaic (BIPV)  is often in the news.

There's a romance to it. Instead of having ugly solar panels on your house, your whole house could be an integrated solar system. It could use all the heat and light hitting it, from any angle, look like any other house, and pay for itself.

Pythagoras Solar, an Israeli start-up, says its solar windows, cells sandwiched in glass, can both lower heating and cooling costs while they generate electricity, paying for themselves in 3-4 years.

Pythagoras is private, but most publicly-traded BIPV plays are penny stocks, like QSolar an outfit I wrote about previously here. I don't recommend penny stocks as investments.

The closest to a pure play in this area that is publicly traded, by my reckoning, is Ascent Solar. It's telling that they are not focused on the building trades, but on direct-sales to customers like the military, the auto industry, the space business, and custom manufacturers.

By contrast Konarka Solar, whose Power Plastic is a very interesting BIPV product, is privately held with $150 million invested. Their product goes into tents and onto devices.

Suntech Power of China has gotten into the BIPV market with solar shingles. But notice that Dow Chemical, which announced its PowerHouse solar shingles to great fanfare last year, has yet to release them to the market.

Why has BIPV failed to launch? Distribution.

BIPV should be a natural home improvement offering. But Home Depot and Lowe's only sell products that are in scaled manufacturing and generate their own demand. Creating that demand starts with a long sales cycle, high margins, and a lot of hand-holding.

There are such businesses in the construction area. They are salesmen who call on architects, builders and people who specify what will go into new buildings. It's a long, hard slog to get people to sign on the dotted line. These outfits tend to be small and local.

The relative success of Toll Brothers, which created a “solar home” project called Toll Green with financing from SunRun last year, is one promising sign of what is to come. The growth of retailers such as Solar Home, which sell BIPV along with other energy-saving products, could also create a channel for the sector.

But here is the bottom line. Solar panel makers may have ugly products, but they have a distribution channel and available financing. Until such a channel develops in BIPV, it will be difficult to for the industry to launch.

No matter how exciting their product may be.