REVIEW BY EXPERT FROM STAP ROSTER

A Technical Review of GEF proposal

“Malaysia: Building Integrated Photovoltaic (BIPV) Technology Application Project”
(MBIPV)

Overall Impression:

This is a generally well structured proposal. However, it glosses over one point that it acknowledges,
but then does not address. The main barrier to large scale PV installation (either building integrated
or stand alone) is the currently higher price of PV technology compared to other conventional and
even some renewable energy technologies. The project authors acknowledge this point in some early
parts of the text. However, ignoring this point in making estimates of long term impacts is not fair,
nor will it help persuade the reader that the proposal deserves financial support.

The proposal also does not state directly (or at least, in an easy to find way) how many tons of CO2
will be avoided directly and indirectly for the project investment.

Key Issues

1. Scientific and Technical Soundness

The scientific and technical basis of the project is sound. PV panels integrated into a building’s
exterior (usually the roof in equatorial countries), reduce some components of the installation cost,
and also improve the building’s integrity. They also provide high visibility, easy sales of excess
electricity back to the grid, and lower losses in transmission and distribution.

So, the first technical comment is that these benefits should be quantified, in comparison with stand-
alone PV installations. Otherwise, one is justified in asking why bother with building integration?
Can’t the same goals as the current project be achieved by more traditional stand-alone PV
installations?

Relative to building integrated PV products (e.g., PV roof shingles by UniSolar of the USA), there
are many more – and more competitive – stand-alone PV products. So, the building-integration
aspect of the proposal needs to be strengthened.

The second technical comment is about the barriers that this project will address. The major barriers
faced by large scale PV projects for Malaysia are correctly listed at several places in the proposal
(e.g., on pages 9-111). The MBIPV project will address most of these barriers, but one major one
might remain – because it is outside the power of any agency to remove on a given schedule --- this
barrier is the inherent high cost of current PV technology. There is no denying this fact, but the
proposal does not address this fact head on. As a result, the text seems to circumvent this
inconvenient point, as if this point does not exist. This issue needs to tackled head on, and honestly.

2. Identification of global environmental benefits and/or drawbacks of the project

The project aims to accelerate adoption of building integrated PV power by removing various
institutional, informational, policy, technical and financial barriers. It should save several tons of
CO2 emissions per year. However, I could not find in the document clear and simple statement of
how many tons of CO2 will be saved annually directly by the project implementation. Points 61 and
62 on page 18 should have given these numbers, however, the text beats around the bush, by first
saying how much the emissions will increase in the baseline scenario (point 61), and then by
discussing the technical potential of whole of Malaysia and then the rest of the ASEAN region fully
exploiting building integrated PV (point 62). The simple question that must be simply answered is: at
the end of this project, with an expenditure of US$ 4.7 million of GEF money, and a total of US$
25.2 million of everyone’s money all together, how many tons of CO2 will you avoid directly
annually?

There are no global environmental drawbacks of the proposal.

3. How the project fits within the context of goals of GEF, its operational strategies,
programme priorities, GEF Council guidance and relevant conventions.

The project fits within the broad goals of GEF and its operational strategies and priorities. It aims to
reduce barriers to large scale use of building integrated PV in Malaysia. The local expertise
developed in the course of this project will be useful if and when PV costs decrease and it becomes
economically viable option. The activities identified in the proposal fit GEF programme priorities
and meet the council guidance.

4. Regional Context

Introducing the institutional support for grid-connected PV power in Malaysia will assist in the
introduction of these skills and similar institutional support in the region.

5. Replicability of the project

Several of the problems identified in Malaysia in this proposal are also seen, to various degrees, in
other developing countries. The sections of the project dealing with removal of these barriers are
replicable in other countries. However, unless the core PV technology costs drop, as they well might
one day, the project is not replicable directly.

6. Sustainability of the project

Project is designed to be sustainable beyond the horizon of GEF support, if and when core PV costs
drop.

Secondary Issues

The proposal has no significant linkages to other focal areas (e.g., biodiversity protection or coastal
waters).

Other (non-stated) beneficial or damaging environmental effects are negligible.

The degree of involvement of stakeholders in the project is planned to be adequate.

The project will build significant capacity in Malaysia in the private and government sectors for
building-integrated grid connected solar PV installations.

The project is innovative in terms of comprehensively addressing the removal of some of the barriers
at the technical, institutional and financial level, and also in terms of private sector and government
institutions, for long term capacity building for grid-connected solar PV power.

Additional Comments

1. Page 4, Para. 1, line 4. Insert word “become” after “increased and” for correct grammar.

2. Page 5, top line. What is a “suiting environment for PV”?

3. Page 6, Para. 11, lines 2-3. What is “planted up”?

4. Page 7, Para. 14, line 5. Change “envisage” to “envisaged” for correct English.

5. Page 7, Para. 16. Please double check the claim that the total solar (sunshine) input on
Malaysia is only 16 times the human conventional energy consumption. This is very
unlikely to be true. Solar energy input should be much larger.

6. Page 9, Para. 23. The PV prices are correctly quoted, but let’s face it, $7000 per kWp is high
in comparison with other sources. So, one hopes that Malaysia does not pay at this huge
price to fulfill its technical potential for BIPV of 11 GWp! That number, US$ 77 billion, is
absurd and irrelevant to your proposal.

7. Page 10, Para 26, line 3. What is “need to be firmed on”? And again in line 6, what is “need
to be represented with views are considered”?

8. Page 10, Para 29. Second sentence. Need to clean up the English. In the third sentence, do
you mean “of” when you write “on”?

9. Page 11, Para 30. You write 6 MWp annual demand is needed to establish new factory, but
there is already 4.5 MWp idle factory capacity sitting around (see your Para 20 on page 8).

10. Page 12, Para. 39, line 2. last word “in” should be deleted?

11. Page 13, Para 44. Here you make the correct key point. BIPV does not take off because it is
too expensive. There is not much one can do about it for now. On the other hand, you should
make the point here, in a separate paragraph that Malaysia needs to build up local technical
manpower and manufacturing capacity for the day when the PV costs will decline and PV
will become competitive. Because without these local strengths, Malaysia will be unable to
obtain the benefit from these lower PV costs when they come. The BIPV project, on the
other hand, will help lower the balance-of-system costs slightly, but not significantly enough
to make a difference.

12. Page 14, Para. 47. It is difficult to justify this project as sustainable. Without a drop on core
PV prices, it is not financially viable. Without a drop in core technology price of PV, you
 can not ignite the market for it. This is serious point, which should not be glossed over. At
the same time, you should be able to say that you are building capacity in anticipation of a
drop in cost of core PV technology.

13. Page 14, Para 48. There seems to be a bit of wishful thinking here. What is the price-
elasticity for PV demand? How can you then write, without reference or without
justification, that an extra 10% drop in PV system prices, caused by the BIPV project, will
be large enough for a market take-off?

14. Page 15, Figure 3. This is confusing. The baseline (gray bars) show higher installed capacity
annually than does the alternative (black bars). So, the baseline sales would have been
higher than those with the project??

15. Page 16, Para 49. Line 7. You assert that importing the technology and small market have
caused PV costs to be high in Malaysia. However, in other locations with larger markets and
local PV manufacture, PV costs are still high. Even in the US, one needs a subsidy to make
PV competitive with conventional electricity generation costs.

16. Page 16, Para 52, line 1. Delete “of” from the line.

17. Page 18, Paras 61-62. You should also give a straight answer to the question: how much
annual CO2 will the project save directly?

18. Page 28, Para. 74-75. How about financial sustainability? The project will be poised to be
sustainable in terms of technical expertise and regulations, and financing and public
education, if and when the PV core technology costs drop. You need to address this point.

19. Page 29, Para. 76. On what basis do you support graph in Figure 5, and the statement of
reducing the pay-back period to 15 years (from the current 60 years)? Unless PV prices
drop (and they might drop owing to some technological breakthrough), these projections are
wishful thinking.

20. Page 38, Para. 8 (of Annex A). What you estimate here is normally called the technical
potential. This is different from the economic potential, and still different from the market
potential. Just because Malaysia expects a significant increase in peak demand does not
mean that uneconomical technologies will get adopted to their full technical potential!!
Responses to STAP Review
Comment
Overall Impression: The
proposal glosses over one
point that it acknowledges,
but then does not address.
The project authors
acknowledged that the main
barrier to large scale PV
installation (either building
integrated or stand alone) is
the currently higher price of
PV technology compared to
other conventional and even
some renewable energy
technologies. However,
ignoring this point in making
estimates of long term
impacts is not fair, nor will it
help persuade the reader that
the proposal deserves
financial support.
Response Reference
We fully agree that the main barrier to BIPV Page 16,
application is the high price of the technology. Hence, para 53
the ultimate purpose of this project is to reduce the
long-term cost of the BIPV technology, in line with
the OP-7 objective, and the GEF strategic priority on
global market aggregation and national innovation for
emerging technologies (SP-5).
Due to the present high initial price and lack of the Page 4, para
enabling environment, the economics of the BIPV 5
technology is unattractive. However, the technology
price can only be reduced when there is a sustainable
BIPV market. Unfortunately, a sustainable market
cannot be established for as long as the economics of
the technology is unfavorable. Thus, it is a “chicken
and egg” situation.
Based on the 10-year assessment by IEA-PVPS Page 17,
(report is available from www.iea-pvps.org), the PV para 58
system cost can decrease by 15% to 20%, if there is a
doubling of the market size. Therefore, the focus of
this project is to create a growing and sustainable
BIPV market with all supportive mechanisms to be in
place. The project is not targeting large capacity
installations of BIPV, but instead will focus on the
demonstration of the BIPV technology applications
and the creation of a sustainable BIPV market. The
sustainable BIPV market development and the
subsequent price reduction are to be achieved over a
long-term period (at least 10 years), i.e. beyond the
completion of the project.
Although the approach of reducing the BIPV system Page 6-7,
cost will be market and industry driven, the role of the para 13-14
Government is critical in setting-up the enabling
environment for the sustainable BIPV market. In this
aspect, the Government of Malaysia is committed to
implement the MBIPV project under the 9th Malaysia
Plan, in addition to the 5th fuel policy and the Small
Renewable Energy Power (SREP) Program. The
results of the MBIPV project will lead towards
continuous development of the BIPV market under
the subsequent Malaysia Plans.
Through the enhanced BIPV market, the project is Page 14,
 Comment
The proposal also does not
state directly (or at least, in
an easy to find way) how
many tons of CO2 will be
avoided directly and
indirectly for the project
investment.
Response Reference
expected to achieve a 20% reduction of the para 48
technology cost within the project implementation
period, and will continue to further reduce after the
project is completed. In addition, the continuous price
reduction will happen due to international market
pressure (mainly in Japan and Europe) to further
reduce the technology cost. Hence, this MBIPV
project is also contributing to the global efforts to
reduce the BIPV technology cost via the sustainable
BIPV market development in Malaysia.
The above response is incorporated into the project
proposal.
As stated in Footnote 5, page 14, a 1MWh of PV Page 14 and
electricity is equivalent to 0.62 tons of CO2 avoided. 6, Footnote
This is the same CO2 emission factor used by the 5 and Table
Malaysia Energy Centre (PTM) as a benchmark for 1
calculating CO2 emission reduction for CDM
purposes. It is important to note that this CO2
emission factor is based on the power generation mix
in Malaysia in the year 1999 (Table 1, page 6).
As Malaysia plans to reduce the natural gas and
increase coal consumption in the years to come (refer
to Table 1, page 6), the emission factor is expected to
increase to more than 0.62 tons CO2.
Directly, a BIPV installed capacity of 1 kWp in
Malaysia will produce an average of 1.2 MWh of
electricity annually, without any associated GHG
emission. This annual electricity production is
assumed to be available over a 25-year period, based
on the warranty given by the PV manufacturer and
assuming the system is reliable.
In addition, the following relationship between an
installed BIPV capacity, the electricity production,
and CO2 emission factor, will be further investigated
and quantified during the MBIPV project.
Nevertheless, the current assumptions are as follows:
The BIPV application can reduce as much as
10% of a building air-conditioning load if the
BIPV is appropriately used as shading devices.
The assumption is that a 1 kWp BIPV can reduce
5 MWh/year of air-conditioning load.
The reduced electricity losses by installing a 1
 Comment Response Reference
kWp BIPV is assumed to be equivalent to 0.1
MWh/year

Based on the total installed capacity of 1.5 MWp of

BIPV within the project period, the direct CO2
avoided will be:
Electricity production from BIPV: 1,500 × 1.2 ×
0.62 = 1,116 tons CO2 per annum
Reduced cooling load requirement: 30% of 1,500
× 5 × 0.62 = 1,395 tons CO2 per annum
Electricity losses reduction: 1,500 × 0.1 × 0.62 =
93 tons CO2 per annum

Thus, the total is 2,604 tons CO2 avoided per annum Page 14,
that translate to 65,100 tons CO2 over the PV lifetime Para 48
period of 25 years.

Indirectly, the MBIPV project will create technology Page 18,

replication of 20 MWp BIPV capacity in Malaysia by para 62
the year 2020. This is equivalent to 34,720 tons CO2
avoided per annum that translate to 868,000 tons CO2
over the PV lifetime period of 25 years.

The above response and correction is incorporated

into the project proposal.

1. Scientific and Technical Soundness

The benefits of BIPV should A PV system, either a stand-alone or a grid- Page 9, para
be quantified, in comparison connected, is classified as a BIPV system whenever 22
with stand-alone PV the PV is aesthetically integrated into the building
installations. Otherwise, one architecture and envelope. Most of the BIPV
is justified in asking why applications are grid-connected systems that are
bother with building applied in urban areas. The stand-alone PV is a
integration? Can’t the same system installation that requires battery to operate and
goals as the current project mostly applied in remote areas.
be achieved by more
traditional stand-alone PV The facts are:
installations? A stand-alone PV only produces electricity for
the intended use (e.g., household electricity
consumption, telecommunication systems, and
navigational systems).
A building integrated PV (BIPV) system will not
only produce electricity, but will also be an
integral part of the building envelope, with a
specific function (e.g., window shading device,
roof, decorative building façade). Hence, the
substituted building materials will partially offset
 Comment
Relative to building
integrated PV products (e.g.,
PV roof shingles by UniSolar
of the USA), there are many
more – and more competitive
– stand-alone PV products.
So, the building-integration
aspect of the proposal needs
Response Reference
the BIPV technology cost. Also, land space for
the technology application will not be an issue.
BIPV systems, in almost all cases, will also
improve the aesthetic exterior appearance of the
building.
The most important benefits of BIPV, especially in Page 19,
urban areas, will be the opportunity to utilize PV para 64
technology without the need of land-use. As the cost
of land is significant in urban areas, BIPV will allow
the utilization of PV technology to generate electricity
without incurring the additional cost of the land-use.
BIPV is a different technology approach compared to
a stand-alone PV application. Therefore, one cannot
simply compare and justify both applications. The
barriers for stand-alone application are very different
from those of BIPV.
It is well accepted among the PV industry that BIPV
offers greater benefits in comparison to stand-alone
PV application. There are many available literatures
to substantiate these facts (please refer to IEA-PVPS
Task 7).
A sustainable BIPV market means that the
prospective users of the technology can afford and
will continue to apply the technology. Such customers
are available in the urban areas. Thus, urban BIPV
application will provide greater chances of success in
comparison to stand-alone PV, which are mainly
applied in remote locations.
Failure rate of standalone PV system projects
worldwide (solar home system program) is in excess
of 70% mainly due to the majority of the customers
cannot afford to pay for the system if there is no
subsidy.
The response is as above.
In addition, an IEA-PVPS report (IEA-PVPS T1-
12:2003) stated that the system prices for stand-alone
PV tend to be greater than those for grid-connected
BIPV, as BIPV does not require storage batteries and
associated equipment. In general the stand-alone PV
system prices are about twice the price of grid-
 Comment Response Reference
to be strengthened. connected BIPV system.

The MBIPV project will
address most of these
barriers, but one major one
might remain – because it is
outside the power of any
agency to remove on a given
schedule --- this barrier is the
inherent high cost of current
PV technology. There is no
denying this fact, but the
proposal does not address
this fact head on. As a result,
the text seems to circumvent
this inconvenient point, as if
this point does not exist. This
issue needs to tackled (sic)
head on, and honestly.
Based on the fact that BIPV prices will go down Page 17,
when PV production increases, and PV production para 56
increases when BIPV demand increases, the MBIPV
project strategy to induce a cost reduction impact on
the technology relies in creating and sustaining a
market demand for BIPV (market driven strategies).
It would be difficult to logically address cost
reduction of PV outside the market norms.
International market (Japan and Europe) will continue
to drive the technology price down due to higher
demand in respective countries. Since 1999, the
majority of the world PV capacity has been grid-
connected BIPV, with a growth rate of about 30%
(reference from IEA-PVPS T1-12:2003 report). As
mentioned earlier, for a doubling of a market size, the
PV price will drop by 15% to 20%.

2. Identification of global environmental benefits and/or drawbacks of the project

I could not find in the The response is as mentioned earlier. Page 14 and
document clear and simple 18, Para 48
statement of how many tons While the initial impact is minimal, the replicability and 62
of CO2 will be saved of the system will ensure a steady CO2 avoidance
annually directly by the from BIPV of about 1.7 tons CO2 per kWp per
project implementation. annum. Over the 25 years lifetime period of the PV,
Points 61 and 62 on page 18 the total CO2 avoided will be 42.5 tons per kWp.
should have given these
numbers, however, the text
beats around the bush, by
first saying how much the
emissions will increase in the
baseline scenario (point 61),
and then by discussing the
technical potential of whole
of Malaysia and then the rest
of the ASEAN region fully
exploiting building integrated
PV (point 62). The simple
question that must be simply
answered is: at the end of this
project, with an expenditure
of US$ 4.7 million of GEF
money, and a total of US$
25.2 million of everyone’s
money all together, how
 Comment Response Reference
many tons of CO2 will you
avoid directly annually?
There are no global Agree.
environmental drawbacks of
the proposal.
3. How the project fits within Agree. Page 16,
the context of goals of GEF, para 53
its operational strategies,
programme priorities, GEF
Council guidance and
relevant conventions: The
project fits within the broad
goals of GEF and its
operational strategies and
priorities. It aims to reduce
barriers to large-scale use of
building integrated PV in
Malaysia. The local expertise
developed in the course of
this project will be useful if
and when PV costs decrease
and it becomes economically
viable option. The activities
identified in the proposal fit
GEF programme priorities
and meet the council
guidance.
4. Regional Context: Agree Page 17,
Introducing the institutional para 57
support for grid-connected
PV power in Malaysia will
assist in the introduction of
these skills and similar
institutional support in the
region.
5. Replicability of the project: This project (OP-7) mainly focuses on reducing the Page 17,
Several of the problems long-term cost of the BIPV technology. The key word para 58
identified in Malaysia in this is long-term where the final result will be realized
proposal are also seen, to after the completion of the project.
various degrees, in other
developing countries. The As mentioned earlier, reduction of the cost of BIPV
sections of the project system can be achieved by inducing a sustainable
dealing with removal of these BIPV market, not via a technological breakthrough.
barriers are replicable in Hence, the overall strategy and approach of the
other countries. However, project focuses towards developing a sustainable and
unless the core PV widespread market with the necessary support
technology costs drop, as mechanisms in place.
 Comment
they well might one day, the
project is not replicable
directly.
6. Sustainability of the
project: Project is designed to
be sustainable beyond the
horizon of GEF support, if
and when core PV costs drop.
Secondary Issues
The proposal has no
significant linkages to other
focal areas (e.g., biodiversity
protection or coastal waters).
Other (non-stated) beneficial
or damaging environmental
effects are negligible.
The degree of involvement of
stakeholders in the project is
planned to be adequate.
The project will build
Response Reference
The replicability of the project will depend on many Page 28,
factors including the price of PV. The risk that the Table 2
current strategy totally fails to achieve any long term
cost reduction is between low to medium. Since the
market will respond to other enabling factors such as
energy policy and incentives, the absolute risk of the
project of not being directly replicable is therefore
much less.
The market and capacity building activities are Page 18,
replicable in the ASEAN region, and are there is a para 62
need to introduce the technology first. The cost issue
will subsequently be addressed through improved
awareness and capacity level of the industry, the
public, and policy sector in any country. Ultimately,
the cost reduction of the system will be market
driven, as mentioned previously.
The response on the topic of PV cost reduction is as
mentioned earlier.
In addition, the important aspect of the project Page 29,
sustainability is to ensure that there is a continuation para 76
activity to grow and develop the BIPV market beyond
the project. Hence, the national BIPV program within
the 10th Malaysia Plan will be critical. Therefore, the
project strategy will ultimately lead towards
development and implementation of a sustainable
follow-up program. Significant examples from
countries like Germany and Japan have demonstrated
the critical need of an improved environment for
BIPV market that will ultimately lead towards
significant cost reduction.
Agree.
Agree.
Agree, via the National Steering Committee and the Page 30,
National PV Council. para 78
Agree. Page 20-21,
 Comment Response Reference
significant capacity in para 68
Malaysia in the private and
government sectors for
building-integrated grid
connected solar PV
installations.
The project is innovative in Agree. Page 20-27,
terms of comprehensively para 68-71
addressing the removal of
some of the barriers at the
technical, institutional and
financial level, and also in
terms of private sector and
government institutions, for
long term capacity building
for grid-connected solar PV
power.
Additional Comments
Page 4, Para. 1, line 4. Insert Agree. Page 4, para
word “become” after 1
“increased and” for correct
grammar.
Page 5, top line. What is a “Suiting environment” means “enabling Page 5, para
“suiting environment for environment”, characterized by: 6
PV”? Public sector: Enhanced awareness about the
BIPV technology and its benefits, improved
technology perception and confidence.
Industry sector: Improved awareness about the
BIPV technology and its benefits, effective
quality control programs, established and
effectively enforced code of practice for BIPV
system designs and applications.
Policy sector: Favorable feed-in tariffs and fiscal
incentives, integration of the BIPV technology in
the national policy.
Finance sector: Attractive financing schemes for
BIPV system projects and capital availability.

The word “suiting” is replaced with “enabling” in the

project proposal.

Page 6, Para. 11, lines 2-3. “Designed and installed”. Page 6, para
What is “planted up”? 11
Page 7, Para. 14, line 5. Agree. Page 7, para
Change “envisage” to 14
“envisaged” for correct
English.
 Comment
Page 7, Para. 16. Please
double check the claim that
the total solar (sunshine)
input on Malaysia is only 16
times the human conventional
energy consumption. This is
very unlikely to be true. Solar
energy input should be much
larger.
Page 9, Para. 23. The PV
prices are correctly quoted,
but let’s face it, $7000 per
kWp is high in comparison
with other sources. So, one
hopes that Malaysia does not
pay at this huge price to
fulfill its technical potential
for BIPV of 11 GWp! That
number, US$ 77 billion, is
absurd and irrelevant to your
proposal.
Page 10, Para 26, line 3.
What is “need to be firmed
on”? And again in line 6,
what is “need to be
represented with views are
considered”?
Page 10, Para 29. Second
sentence. Need to clean up
the English. In the third
sentence, do you mean “of”
when you write “on”?
Page 11, Para 30. You write
6 MWp annual demand is
Response Reference
Agree. Page 7, para
16
The average Malaysia solar radiation is 4,500
kWh/m2 per day.
The total land area of Malaysia is 328,550 km2.
The Malaysian annual electricity demand in 2002
was about 67,000 GWh.
The correct value should state 8 million times of the
Malaysian annual conventional electricity
requirement. However, this statement is not
significant to the context of the project and thus, is
deleted.
Agree. Page 9, para
23
The PV price is expected to go down from US$
7,000/kWp to US$ 5,500 (20% reduction) by 2010,
and to US$ 3,500 (>30% reduction) by 2020.
In reality, the BIPV technical potential of 11 GWp
may never be fulfilled within the next 20 years.
Assuming that there will be a 20 MWP of BIPV
capacity by year 2020, the associated BIPV market
potential is about US$ 70 million. This amount
translates into national benefits towards local industry
development that will spur the national GDP.
However, this statement is not significant to the
context of the project and thus, is deleted.
“Need to be firmed on” is replaced with “needs to be Page 10,
committed” in the project proposal. para 26
“Need to be represented with views are considered” is
replaced with “consumer groups and industry players
need to be represented with opportunity to highlight
concerns and to be adequately addressed” in the
project proposal.
Agree. Page 10,
para 29
The second sentence is replaced with “State-of-the-art
materials are available without inherent restriction to
the supply chain”.
Approximately 6 MWp of annual market demand is Page 11,
required in order to establish and operate a PV para 30
 Comment
needed to establish new
factory, but there is already
4.5 MWp idle factory
capacity sitting around (see
your Para 20 on page 8).
Page 12, Para. 39, line 2.
Last word “in” should be
deleted?
Page 13, Para 44. Here you
make the correct key point.
BIPV does not take off
because it is too expensive.
There is not much one can do
about it for now. On the other
hand, you should make the
point here, in a separate
paragraph that Malaysia
needs to build up local
technical manpower and
manufacturing capacity for
the day when the PV costs
will decline and PV will
become competitive. Because
without these local strengths,
Malaysia will be unable to
obtain the benefit from these
lower PV costs when they
come. The BIPV project, on
the other hand, will help
lower the balance-of-system
costs slightly, but not
significantly enough to make
a difference.
Response Reference
module manufacturing factory economically
(according to information from RWE-Schott, one of
the major international PV manufacturers).
This statement emphasizes the need to have a
sustainable and substantial market in order to justify
the investment for a PV module manufacturing
facility. This para 30 has no link (and intended not to
be linked) to the statement of para 20.
Para 20 merely states that there is a PV module plant Page 8, para
with a potential output capacity of 5 MWp available 20
in Malaysia. In reality, the plant only produces 500
kWp of PV annually to cater for the rural PV
application. As mentioned in earlier response, the
rural PV market is not sustainable and very much
dependent on Government subsidy.
Agree. Page 12,
para 39
Disagree that no one can do anything about the high Page 14 and
BIPV cost. 17, para 48,
56 and 58
It is true that today the BIPV technology in Malaysia
does not take off because it is still relatively
expensive. Malaysia, as well as any other country, can
change the situation by developing the BIPV market.
As mentioned earlier, the BIPV cost will go down due
to increase of market demand. This is a bottom up
approach (market and industry driven) rather than top
down (Government driven). Nevertheless, the
Government has an important role to play in
providing a suitable institutional support to the market
and by creating a national program on BIPV to
consolidate all the efforts.
The Government of Malaysia is committed to Page 6-7,
implement the MBIPV project under the 9th Malaysia para 13-14
Plan, in addition to the 5th fuel policy and the Small
Renewable Energy Power (SREP) Program. The
results of the MBIPV project will lead towards
continuous development of the BIPV market under
the subsequent Malaysia Plans.
The BIPV market can only grow if the technology is
proven and understood by the prospective users.
Therefore, improving the public awareness and the
 Comment
Page 14, Para. 47. It is
difficult to justify this project
as sustainable. Without a
drop on core PV prices, it is
not financially viable.
Without a drop in core
technology price of PV, you
can not ignite the market for
it. This is serious point, which
should not be glossed over.
At the same time, you should
be able to say that you are
building capacity in
anticipation of a drop in cost
of core PV technology.
Page 14, Para 48. There
seems to be a bit of wishful
thinking here. What is the
price-elasticity for PV
demand? How can you then
Response Reference
capacity of the industry are also essential. In parallel,
the major PV manufacturers are continuously trying
to reduce the cost of BIPV. In this aspect, the
prospect of a significant BIPV cost reduction due to
improved technology is expected within the next 10
years.
Agree that Malaysia should build the technical Page 20-23
competency and manufacturing capability. These and 26-27,
subjects are fully addressed within the para 68, 69
implementation strategy of the project. Component 1 and 71
and 2 of the project will direct and indirectly improve
the local technical competency. Component 4 of the
project will develop the local industry as well as
promote local manufacturing and product testing.
The project objective is to develop a sustainable Page 14,
market that is supported by suitable policy and fiscal para 47
infrastructures within the subsequent Malaysia Plans.
Through the national BIPV program, the market will
become sustainable that will directly lead towards
cost reduction.
In addition, this project does not simply wait or
anticipate for PV price to reduce. The project will
implement interventions that would contribute and/or
facilitate the reduction of the BIPV price. It will
establish linkages and working mechanisms with the
international PV industry to create a new ASEAN
market as well as supportive environment for the
BIPV application. Through the four proposed project
components, the project will create a market push and
a market pull for BIPV technology. Please note that
the European cost of a PV (excluding balance of
system) in 2004 is already less than US$ 3 per Wp.
Thus, the project can spur the market through the Page 20-27,
support from GEF. The GEF support is significant in para 68-71
addressing the associated incremental cost in
demonstrating the BIPV technology and introducing
the BIPV market over the next five years.
For now, there is no data available to quantify the Page 26,
price-elasticity for PV demand in the Malaysian para 70
scenario. This factor will be determined through the (item 3.8)
results of the MBIPV project.
 Comment
write, without reference or
without justification, that an
extra 10% drop in PV system
prices, caused by the BIPV
project, will be large enough
for a market take-off?
Page 15, Figure 3. This is
confusing. The baseline (gray
bars) show higher installed
capacity annually than does
the alternative (black bars).
So, the baseline sales would
have been higher than those
with the project?
Page 16, Para 49. Line 7.
You assert that importing the
technology and small market
have caused PV costs to be
high in Malaysia. However,
in other locations with larger
markets and local PV
manufacture, PV costs are
still high. Even in the US, one
needs a subsidy to make PV
Response Reference
The main focus of the project is to develop a market
that will lead towards BIPV cost reduction. At the end
of the 5-year period, the cost is expected to reduce by
20% from the baseline cost figure at the beginning of
the project. The institutional supports to take-off and
sustain the market needs to be continued well beyond
the MBIPV project period. Hence, the project strategy
will lead towards the development of sustainable
follow-up programs within the subsequent Malaysia
Plans.
Correction to Figure 3, page 15. The legend Page 15,
“Alternative” is replaced with “Incremental” in the Figure 3
project proposal.
Starting from year 2005, when the MBIPV project
kicks-off, both the “baseline” (gray bars) and the
“incremental” (black bars) will be the activities and
results of the MBIPV project.
The “incremental” will be the activities and results of
the GEF support. In this case, the GEF is only
providing support to address the incremental cost of
the BIPV technology application. Incremental cost is
the first and foremost critical hurdle of the project that
must be adequately tackled in order to allow market
penetration for BIPV technology. As the market
develops, the incremental cost will also reduce.
Starting from year 2005, the “baseline” will be the
activities and results of the contribution from the
stakeholders in developing the BIPV market. Without
the “incremental” activity, the “baseline” activity may
not be effective. The successful “baseline” activity
will be critical in continuing the development of a
sustainable BIPV market.
In comparison to other countries and markets, the cost Page 16,
of BIPV in Malaysia is significantly higher per Wp. para 49
This is due to taxes, the small market, and the
inexperienced consumers and service providers.
The cost per Wp of BIPV system in Japan and Europe
(especially in Germany) markets are less than in
Malaysia. This is because of the well-established
markets, educated consumers, competent service
providers, and availability of local BIPV products.
 Comment
competitive with conventional This is the same approach that MBIPV project is
electricity generation costs. proposing but within a shorter timeframe.
Page 16, Para 52, line 1.
Delete “of” from the line.
Page 18, Paras 61-62. You
should also give a straight
answer to the question: how
much annual CO2 will the
project save directly?
Page 28, Para. 74-75. How
about financial
sustainability?
The project will be poised to
be sustainable in terms of
technical expertise and
regulations, and financing
and public education, if and
when the PV core technology
costs drop. You need to
address this point.
Page 29, Para. 76. On what
basis do you support graph in be achieved when the long-term targets of the project
Figure 5, and the statement
of reducing the pay-back
period to 15 years (from the
current 60 years)? Unless
PV prices drop (and they
might drop owing to some
technological breakthrough),
these projections are wishful
Response Reference
The subsidy requirement in the US is due to lack of
supportive environment for RE technologies.
Furthermore, the federal policy sector is not
committed towards PV. Whereas in Malaysia, the
federal government is committed and thus supportive,
but seeks guidance and support from GEF in order to
address the initial barrier of the incremental cost.
Agree. Page 16,
para 52
As mentioned earlier. Page 14 and
18, para 48
and 62
The MBIPV project activities are designed to make Page 29,
the BIPV technology development sustainable. The para 75 and
project financial sustainability is strongly influenced 76
by the outcomes of the project, e.g. new policies,
financing mechanism, 10th Malaysia Plan, etc, beyond
the completion of the project. Hence, financial
sustainability will be good if the MBIPV project is
well implemented.
The PV cost does not totally determine the project
sustainability, as mentioned in earlier responses. The
project will be sustainable if the enabling
environments are implemented in the 10th Malaysia
Plan and the stakeholders continue to develop the
BIPV market. The developed market will directly
contribute towards technology cost reduction. In this
case, Malaysia will be contributing to global efforts to
reduce BIPV cost through the developed local market.
The payback period of 15 years by the year 2020 will Page 29,
para 76
are met as follows:
BIPV system cost is reduced to US$ 3,300/Wp
due to market forces (today is US$ 7,000/Wp);
The BIPV energy yield improves to 1,400
kWh/kWp/year due to improvement in
performance, quality, and reliability (present
average BIPV performance is 1,200
kWh/kWp/year);
 Comment
thinking.
Page 38, Para. 8 (of Annex
A). What you estimate here is
normally called the technical
potential. This is different
from the economic potential,
and still different from the
market potential. Just
because Malaysia expects a
significant increase in peak
demand does not mean that
uneconomical technologies
will get adopted to their full
technical potential!!
Response Reference
The feed-in tariff for BIPV is US$ 0.16/kWh,
which is supported by enabling regulatory
frameworks and provision of incentives
(presently, the feed-in tariff is US$ 0.06).
It is important to fully understand that the BIPV cost
will go down not only because of some technological
breakthrough, but also due to market forces, as
mentioned earlier. Furthermore, this economic
performance does not yet consider the indirect value-
added and savings generated from BIPV, such as:
Reduced air-conditioning load,
Improved energy efficiency and losses reduction,
Enhanced building aesthetic and image without
additional maintenance cost.
Agree. Page 39,
para 8
With the existence of a sustainable market and (Annex A)
supported by a well-developed enabling environment,
the “uneconomical technologies” can become
“economical” in the long-term, as in the case of BIPV
system application in Germany.
It is true that the 11 GWp of BIPV technical potential
may not be realized Malaysia. The economic potential
may only be realized once detailed assessments are
conducted as planned within the MBIPV project
scope. The market potential is very much dependent
to the project success and replicability of the
technology. The Malaysian Government is fully
aware of the GHG effect from the power generation
sector. Hence, Malaysia is committed to develop
renewable energy as the 5th fuel and realize its market
potentials.
The word “technical” is added into the statement.
RESPONSE TO CONVENTION SECRETARIAT REVIEW
Expected at Work Program Inclusion

Comment Response Reference

Country Drivenness
The third paragraph in Agree. The third paragraph indicated the current challenges Executive
the country drivenness faced by the BIPV industry and the perspective of the Summary:
section (Exec sum) is Government of Malaysia (GOM) on solar PV. Under the 8th Page 3, 3rd
not an indication of Malaysia Plan (2001-2005), focus is given to solar, biomass, Para of
high country-drivenness biogas, municipal waste and mini-hydro as part of the 2(b)
but rather a barrier for announcement of the 5th Fuel Strategy, whereby renewable
rapid and government- energy (RE) is referred to as the country’s 5th fuel. As a result
supported market of the UNDP/GEF Biomass Power Generation and
deployment. Please Cogeneration (BioGen) project, first priority was given to
clarify. biomass as a resource of immediate potential.

The paragraph has been revised to emphasize the country’s

commitment to implement a national BIPV project to
overcome the previously cited challenges. It now reads:

As part of the RE development under the 5th Fuel Policy, the

Ministry of Energy, Communications and Multimedia
(MECM) recognizes the long-term potential of solar energy,
especially for PV in buildings, which will require different
institutional supports in comparison to the Biomass
application. The GOM, through the MECM is committed to
implement the MBIPV project with the support and assistance
from the GEF in order to realize this long-term solar energy
potential in Malaysia.
The exec sum says 5 % The projected RE contribution to the country’s power Project
in 2005, table 1 in the generation mix shown in Table 1 (3% in 2006, 5% in 2010) is Brief:
project brief 3 % in based on a study conducted by the Malaysia Energy Center Page 6,
2006 (probably a BAU (PTM) for the Government. The 3% share figure represents a Table 1
scenario), please business-as-usual (BAU) scenario and also is not publicly
clarify. available.

The 5% RE share in 2005 is a figure quoted from a policy Project

speech by the Energy Minister (MECM) and is publicly Brief:
known. This figure is mainly referred to by the public, the Page 6,
industry sector and the GOM as the target share of RE in the Para 13
power generation mix, under a scenario where RE is highly
promoted, supported and widely used. To meet this target, the
GOM is providing support programs for RE development and
utilization under the 8th Malaysia, such as the Small
Renewable Energy Program (SREP), and the provision of
fiscal incentives for RE-based power generation projects.
 Comment Response Reference
Project Design
The baseline Figure 3 shows annual BIPV installed capacity. The Project
installations in fig. 3 following revisions were made in the Project Brief in order to Brief:
seem pretty sizable clarify Figure 3 in order to avoid confusion:
already. Please explain
this in more detail in Inclusion of Figure 2-1: Cumulative BIPV installed Page 9,
the text and change the capacity, representing the BIPV status in Malaysia during Fig. 2-1;
terminology if the period 1998-2003.
necessary (I even don't Revision of Figure 3: Forecast cumulative BIPV installed Page 15,
quite understand it after capacity, for both alternative and baseline (BAU) Fig. 3;
having read your scenarios during the period 2004-2010.
response to the STAP Inclusion of Figure 3-1: Forecast cumulative CO2 Page 16,
review. Is incremental emission avoidance, showing the possible cumulative Fig. 3.1;
the same as "direct", CO2 emission avoidance during the period 2004-2010.
and baseline Revision of Figure 4: Projected BIPV system cost Page 17,
"indirect"?) reduction, for both alternative and BAU scenarios during Fig. 4;
the period 2004-2010.

The terms direct and indirect were quoted in the STAP

Review comments.
1. Cost-sharing on the The 20% value is not intended as the cap for GEF’s cost Project
hardware in component sharing on the investment cost of the BIPV demonstration Brief:
2, is 20 % the cap? projects. The incremental cost calculation resulted in a cost Para 72 -
figure that is approximately 20% of the required cost for the Item 2.4;
BIPV demonstration projects that will be implemented under Annex
the MBIPV. A1-
Para 12
2. Identify GEF There are 4 major activities in Component 4, and the required Project
contributions to GEF assistance is described at then end of the description of Brief:
subcomponents to each activity (Note: This is also true for each major activity Page 28-
component 4 in more of each component of the MBIPV project. The GEF and 29, Para
detail, how are they baseline contributions are as follows: 74; Items
cofinanced? 4.1 to 4.4
1) R&D on cost reduction of local BIPV products and Page 38,
system optimization for local conditions: GEF support Table 5;
(mainly consultants) is required for the technical Annex A -
assistance to upgrade the technical capacity of local Para 17-
universities in producing commercially viable BIPV 18
products. Pertinent universities will provide in-kind
(personnel and laboratory facilities) assistance. The
Energy Commission (ST) and MESITA will collectively
provide cash of about US$ 1.3 million.

2) International collaboration and technology transfer

program: GEF support (mainly consultants) is required
for the technical assistance in establishing the
international collaboration between the international
 Comment Response Reference
institutions and industries with the local universities and
industries. The collaboration is towards developing local
BIPV products and industry. The local universities, and
industries will provide in-kind co-financing. International
partners such as Fraunhofer ISE, Sputnik, and AES Ltd
will be providing in-kind and cash contributions.

3) Upgrading local BIPV industry capabilities: GEF support

(consultants) is required for the technical assistance in
upgrading the local BIPV industry and to develop
suitable business models and business plans for a
sustainable BIPV industry. The local industries and the
BIPV service providers will provide in-kind co-financing.

4) Establishment of BIPV testing facility: GEF support, in

the form of consultants (MBIPV personnel), is required
for the technical assistance in setting up the BIPV product
testing facility. SIRIM Berhad (a national standards and
testing center) and the MESITA will collectively provide
in-kind and cash (almost US$ 2.0 million) co-financing.
I would actually see a The MBIPV project will apply a bottom-up approach (PV Project
high risk of the industry driven) rather than top-down (GOM driven). Brief:
government losing Nevertheless, the role of the GOM is critical in motivating Page 29-
interest once they are and catalyzing the BIPV industry by creating the enabling 31, Para
aware of the costs of environment for BIPV application, and by providing a 75;
sustaining the follow-up common motivation for the industry in the form of a national Annex A-
to this project by BIPV program. Table A-3
themselves. Please
comment on the levels Thus, the sustainability of the BIPV technology will depend
of support that might be mainly on the PV industry and market mobilization that is
required, per kWh as supported by a strong institutional framework provided by the
well as in total and why GOM. In this regard, the cost to the GOM in sustaining the
you are so confident program during the period 2010-2015 under the 10th Malaysia
that the government Plan will not be too expensive. The expected enabling
will agree to such a environment will be in the form of: (1) A higher feed-in law
scheme. for BIPV (average of US$0.10/kWh from the GOM totaling
to US$ 0.5 million); (b0 Reduction of price discounts for the
BIPV installation under the subsequent Suria 1000 program
(approximately US$ 2.6 million); and, (3), Tax exemption on
imported BIPV equipment (approximately US$ 3.2 million).
The detailed costs will be evaluated during the MBIPV
project implementation under Component 3. The GOM is
highly confident about the realization of the expected outputs
from the MBIPV project. With the improved understanding
of BIPV benefits, the GOM thinks that the macro economic
benefits of a developed local BIPV industry will outweigh its
anticipated GOM contribution to sustain such industry after
 Comment Response Reference
the end of the GEF-assisted MBIPV project.

Please also note that the higher feed-in law and the tax
exemption are expected to continue during the period 2015-
2020, while the price discounts for BIPV installation might
no longer be offered under the subsequent Suria 1000
program.
Could you actually The strategy to develop the BIPV enabling environment in Project
demonstrate the cost Malaysia will be based on the experience learned from the Brief:
reductions in Japan and BIPV technology applications in countries like Japan and Page 25-
Germany, and conclude Germany, as well as in other OECD countries. The main idea 27, Para
on the situation in is to learn from the modalities that were applied in the BIPV 73, 74
Malaysia? initiatives in these countries, learn from the impacts achieved,
gain knowledge of the problems and any best practice from
these BIPV applications in these countries and translate these
into the Malaysian context. Whatever are found to be
appropriate in the Malaysian context for achieving reduction
in the BIPV technology cost (e.g., RE electricity feed-in law
applied in Germany) will be considered. Moreover, learning
from the experiences from these countries will also be
achieve through adequate networking with key organization
from both countries, in addition to contacts with the IEA-
PVPS and its participating countries.

The information on the cost reductions of PV systems in

Japan (Sunshine Program) and Germany (Roof-top Program)
are available from IEA-PVPS (www.iea-pvps.org), and also
from New Energy Foundation (Japan). Lessons learned
regarding approaches used in these 2 countries (and from
other OECD countries) would help facilitate the
demonstration of BIPV cost reduction in Malaysia when the
appropriate enabling environment that is suitable to
Malaysian condition is implemented during the MBIPV
project.
Sustainability (including financial sustainability)
1. What would the In that case, the economics of a BIPV system will become Project
sustainability look like unattractive, where the payback period will be more than 35 Brief:
if the price guarantee is years. For purposes of demonstration, and as a compromise Page 25-
only as high as the with the national utility, net-metering will be applied during 27, Para
price for end-user the MBIPV project implementation period. The project 73;
power? stakeholders agree that this is acceptable during the MBIPV Annex A
period since the main trust is the creation of the enabling – Table
environment (e.g., BIPV affordability). Later, prospective A2
consumers can avail of the special discounts under the
subsequent national BIPV (Suria 1,000) program.

However, the Suria 1000 program (post MBIPV project) will

 Comment Response Reference
require a higher unit purchase price from the utility, which
will reduce annually (depending on the rate of BIPV
technology cost reduction) but will not be less that the
standard electricity price. This will ensure the sustainability
of the BIPV market in addition to the technology cost
reduction. This higher price will be thoroughly evaluated and
recommended as a Renewable Portfolio Standard (RPS)
during the MBIPV project implementation period under
Component 3 of the project.
2. Can any indication The quoted 16 cts/kWh is actually 16 sen/kWh, which is US$ Project
be given for the 0.04/kWh. Brief:
willingness of the utility Page 25-
to actually implement Several discussions were conducted with the national utility 27, Para
such a price guarantee representatives during the PDF-B exercise. As a start, the 73;
of 16 Cts per kWh? utility has agreed to purchase the electricity from BIPV Page 31-
systems on a net-metering basis under the MBIPV project 33, Paras
(Note: Letter from TNB indicating the agreement is 79-82;
available). The agreed net-metering price of US$ 0.06/kWh is Annex A
much higher than any other RE-electricity purchased price – Table
agreed with the utility (US$0.04/kWh for Biomass). A-2

It was decided during the follow-up discussion that it is still

too early for the utility to purchase BIPV-based electricity at
a higher price. This is because the enabling environment to
support the utility as well as the appropriate feed-in law are
still not available and will only be developed during the
MBIPV project (Component 3). Furthermore, the utility’s
understanding on BIPV will need to be improved to quantify
the BIPV added-values to the utility. With the anticipated
improved understanding and the implemented enabling
environment, the utility is expected (or obligated) under a
Renewable Portfolio Standard (RPS) to purchase BIPV-based
electricity at about US$0.18/kWh in the year 2010. This will
annually reduce to US$0.16/kWh or possibly to US$0.13 by
the year 2020, depending on the rate of the BIPV technology
cost reduction.
Industry and Certainly the MBIPV project will generate a BIPV market Project
government have an that could improve the utilization of the PV manufacturing Brief:
interest to promote PV, facility (BP Solar) that is already available in Malaysia. Page 39,
as there are already Nevertheless, this facility will require some upgrade in order Table 7
production facilities in to be fully utilized. Its current operation is to meet the stand-
place, which are alone PV systems demand for rural application. Note that
currently underutilized. Malaysia is already about 99% electrified. Hence the demand
for such systems for rural electrification is now very limited.
The PV industry in Malaysia has been waiting for a BIPV
market catalyst that the MBIPV project will bring. Even
during the PDF-B exercise, the industry has actively
 Comment
Replicability
Lower costs, increased
skills and awareness,
demonstrated
feasibility, and policy
frameworks are likely
to lead to replication.
However, an active
replication strategy for
Malaysia and for other
countries in the region,
including specific
project activities
designed to foster
replication, would be
desirable for the project
brief. (At pipeline
entry)
Apart from the
widespread replication
within Malaysia,
diffusion of the
technology into other
markets in the region is
possible.
Please ensure that all
factors that lead to the
successful model
programs in Japan and
Germany are factored
in the policy discussion.
For example for the
roof-top program in
Germany, subsidized
loans, tax breaks, as
well as full feed in of all
power produced (rather
than net metering) were
absolutely crucial for
the mass take off.
Response Reference
cooperated in the project development activities and has
shown overwhelming interests and commitments to be part of
the MBIPV project activities (letters of supports or
commitments are available).
This issue is thoroughly addressed in Component 1 of the Project
MBIPV project (Activity 1.8). Brief:
Page 21-
23, Para
71
Agree, and this is to be expected from the long-term impact Project
of the MBIPV project that will be monitored and evaluated Brief:
after the MBIPV project is completed (Component 3; Page 27,
Activity 3.8). Para 73
(3.8)
Component 3 of the MBIPV project will evaluate the model Project
programs and success factors detail in order to develop the Brief:
suitable enabling environment (e.g., policies, implementing Page 22,
rules and regulations, etc.) for Malaysia, including a suitable Para 71
feed-in law. Malaysia currently has good networking with (1.6)
New Energy Foundation of Japan, IEA-PVPS, Fraunhofer
ISE of Germany, and other European PV stakeholders. In Page 25,
addition, PV stakeholders from Germany, Australia, Holland, Para 73
Switzerland, Japan, Denmark, and Singapore were fully (3.1)
involved during the LFA workshops and stakeholders
seminar during the PDF-B phase of the MBIPV project. With
such networking, pertinent information on successful model
programs from Japan, Germany and other OECD countries
would be available for use in the policy studies and
evaluations for developing BIPV-related policies for
Malaysia.
 Comment Response Reference
Financing Plan
4.7 mUSD GEF, 1 ST is the Energy Commission (EC), the electricity regulator Project
mUSD MECM, 4.3 in Malaysia, and is also known as Suruhanjaya Tenaga (ST). Brief:
mUSD ST in cash (what Page 38,
is ST?), 3.7 mUSD in- Table 6 in the Project Brief has been corrected accordingly. Table 6
kind (please correct
table 6 in the project
brief), 2.7 mUSD GoM,
3.9 mUSD private
sector in cash, 3.9
mUSD private sector
in-kind, 900 kUSD
MESITA
Total: 17.4 mUSD cash During the concept development stage of the MBIPV, it was Project
(4.7 GEF), 7.6 in kind. estimated that the envisioned activities would require GEF Brief:
This is more than funding assistance of about US$ 3.5 million. However, Page 38,
included at pipeline during the stakeholder consultations and the log frame Table 6
entry, but the analysis workshops that were carried out during the PDF-B
cofinancing (12.7 phase of the MBIPV, a clearer picture of the necessary
mUSD in cash) is also interventions that have to be implemented in creating the
much higher. suitable enabling environment for the BIPV industry in
Malaysia became apparent.

The budget and financing plan for the implementation of the Page 38,
identified and agreed activities of the MBIPV were Table 5
thoroughly discussed with the UNDP, the designated
executing agency (MECM), and with the stakeholders during
the National Steering Committee meetings. The total project
cost of US$24,959,160 (excluding PDF-B cost) was agreed
by all parties as the minimum budget requirement to
successfully implement the MBIPV project over the 5 years
period. This is to ensure that all issues related to the initial
BIPV market penetration, the development of enabling
environments, and future market sustainability are well
addressed, resulting in the long-term BIPV technology cost
reduction and widespread replications.

The US$ 4,7 million GEF funding will be utilized for Page 38,
personnel and mission cost (54%), training and capacity Para 92
building (16%), hardware and equipment (26%), and sub-
contractors (4%). The personnel and mission cost as well as
the sub-contractors budget allocation have been fully
optimized and are very critical to allow the MBIPV project to
progress smoothly. This was planned based on the lessons
learned from the on-going GEF supported projects in
Malaysia (MIEEIP and Biogen). The allocated hardware and
equipment, as well as the training and capacity building are
 Comment Response Reference
the minimum incremental cost associated with MBIPV
project.

Some leveraged funding is expected during the course of the

MBIPV project implementation. Hence, the final contribution
from the GOM and other co-financiers might well exceed the
initially stated amount.
Consultation, Coordination, Collaboration between IAs, and IAs and EAs, if appropriate
Strategies for This issue has been addressed in the relevant MBIPV project Project
incorporating lessons activities (Component 1 - Activities 1.6 and 1.7; and, Brief:
and policy experience Component 3 - Activity 3.1). Page 22,
from building Para 71
integrated PV in other (1.6, 1.7)
countries would be Page 25,
expected to be part of Para 73
the project work plan (3.1)
presented in the project
brief. (At pipeline
entry)
The project will make The MBIPV project will take advantage of the potential Project
use of potential synergies with selected activities of the MIEEIP and Biogen Brief:
synergies with the other projects (e.g., policy development, assistance to local Page 14,
GEF projects under industrial equipment manufacturing, etc.). Para 43
implementation
(Industrial energy In addition, the MBIPV project will also complement other Page 12,
efficiency, biomass related GOM projects such as the demand side management Para 34
energy). project being implemented by the Energy Commission, the
integrated resource planning and energy efficient building
projects that are implemented by the Economic Planning
Unit.
Review by Expert from STAP Roster
Some of the responses The relevant response has been incorporated into the project Executive
to the STAP review, executive summary. Summary:
particularly the ones on Page 3-4,
the specifics of BIPV (p. Para 3(a)
20) as opposed to
stand-along PV should
be included in the
project executive
summary.
I also concur with the The economic analysis of the BIPV technology has been Project
STAP reviewer that the further elaborated in the project brief, with the following Brief:
economic analysis of inclusions: Page 52,
the BIPV technology Annex A -
should be included in Table A-2 in Annex 1, showing the economics of the Table A-
the project brief: what projected BIPV market development during the period 2;
are the current 2006-2020 under various enabling environments. Page 33,
 Comment Response Reference
generation costs, what Figure 5: Forecast cumulative BIPV installed capacity Figs. 5
is the cost projection, and system cost reduction under the alternative scenario; and 5-1
how large are the Inclusion of Figure 5-1: Projected BIPV system payback
incremental cost, and is period with direct relationship to the enabling
the Malaysian environments under the alternative scenario.
government aware of
this cost increment?
The detailed discussion The relevant discussion has been incorporated in the project Project
in the STAP review of brief. Brief:
the assumptions Page 31-
underlying the graph in The feed-in tariff of US$0.18/kWh is anticipated for 33, Paras
figure 5 is very introduction in the year 2010. It is expected to annually 79-82
interesting and should reduce to US$0.16/kWh or possibly to US$0.13 by the year
be included in the main 2020, depending on the rate of the BIPV technology cost
text. (is it 16 Cts for the reduction.
whole time or does the
feed-in tariff already
reduce over time?)
GENERAL COMMENTS (for records purpose only, not pre-conditions)
My two main concerns Component 3 of the MBIPV Project will specifically focus on Project
are: (1) That the risk creating a suitable policy (Renewable Portfolio Standard), Brief:
that the policy might and financing mechanism towards BIPV market sustainability Page 29,
not be implemented beyond the completion of the project. This will also be Table 2;
might be higher than achieved with the support and results of the other MBIPV
described; and, (2) project components, particularly Component 1. The MBIPV Page 37,
That the cost reduction project strategy also gives priority in engaging a very strong Figure 6;
might be overestimated. and highly competent project team in order to obtain high
Please include a more success in implementing the project activities. The MBIPV Page 35,
thorough discussion of Project Team will also maintain its established close Para 86;
these risks. cooperation and rapport with respective key GOM agencies Page 34
such as the Economic Planning Unit (EPU), the Ministry of Table 3
Energy (MECM), and the Energy Commission (EC), as well
as the Malaysia Energy Center (PTM), which is expected to
be the project base.

The National Steering Committee will also comprise of key

representatives and decision makers from various important
stakeholders to further ensure the project success. In addition,
the soon to be established National PV Council will provide
strong advocacy to the Government to ensure that the various
recommended policy and enabling environments for BIPV
are implemented. These strategies will ensure that the risk for
the policy of not being implemented is moderate.

The BIPV technology cost reduction in Malaysia of 20% Page 30,

during the period 2005-2010, and a further 30% during the Table 2
period 2010-2020 are moderate estimates. In comparison, the (Market
 Comment Response Reference
cost reductions in the IEA-PVPS participating countries have Risk)
been shown to range from 15% to 20% (or 10% to 17% for a
larger market) in about every two years. This is from a recent
report on an international survey available from www.iea-
prpv.org). The renewed commitment by Japan and some
European countries, in addition to the recently announced
Thai PV program will continue to generate market pressure
towards PV cost reduction. Furthermore, the competency and
status of the local BIPV industry is still very weak,
contributing to a higher BIPV system price in Malaysia. The
expected improved competency level of the local BIPV
industry will significantly contribute to the overall cost
reduction of BIPV in Malaysia.

Expected at CEO Endorsement

Comment Response Reference

Replicability
Full integration of Agree. This will be covered in the MBIPV project Component Project
lessons learned from 3 (activity 3.1) and Component 1 (activity 1.6 and 1.7). Brief:
similar programs in Page 22;
OECD countries In addition, during the BIPV stakeholders seminar organized in Para 71
should be integrated January 2004 where the Chairman of IEA-PVPS was present, (1.6, 1.7)
into project discussion between the project team and the CEO of Malaysia Page 25,
components wherever Energy Center (PTM) with the IEA-PVPS Chairman has Para 73
possible. indicated a strong possibility for Malaysia to be involved in (3.1)
some of the IEA-PVPS activities, in conjunction of the MBIPV
project. This will allow for a better integration of lessons
learned from the IEA-PVPS participating countries (OECD
countries) in promoting the BIPV technology application.
Responses to GEF Council Comments

Comments and Responses Reference

FRANCE
Comment:
As for similar project, the technical choice is also questionable: the production of
solar-based electricity is expensive, technically difficult to implement and the results
are in general poor.

Response:
The Government of Malaysia (GoM) has decided to support building integrated Project
photovoltaic (BIPV) technology in view of BIPV’s technical potential and long-term Brief: Para
viability for widespread application in Malaysia, and in other tropical countries 17, 23, 40,
(ASEAN countries). This refers to BIPV applications for grid-connected power 52, 59, 61,
systems in urban areas. An initial pilot study on grid-connected PV application that 67
was conducted during the period 1998-2002 established that the technology is
technically viable and would produce higher electricity output in comparison to
similar systems installed in temperate climate countries. Nevertheless, the relative
high initial costs, as well as the lack of enabling environment have prevented BIPV
from penetrating the local market. Further assessment conducted during the PDF-B
phase of the MBIPV project verified the technical potential and the market status of
BIPV technology in Malaysia.

In many countries, the cost of PV electricity is still in the range of 3 to 5 times higher
than the standard electricity tariff for residential consumer. However, already in some
places, PV electricity can be fed into the grid at tariff rates that are almost the same as
the residential consumer tariff. Such cases can be found in the US (Hawaii, New
Mexico and Florida) where grid-connected PV is a viable option for electricity supply.
These US states have a residential tariff in the range of 25 to 30 US cents/kWh,
resulting in an economically viable PV electricity option due to the local high solar
irradiance and therefore, high energy yield. In addition, grid-connected PV actually
provides peak electricity where the energy value is economically competitive
compared to the conventional peak electricity supply tariff. In some European
countries, the peak electricity tariff rates vary between 40 to 60 US cents/kWh,
depending on the energy source and the power generation process. Nevertheless, even
with a positive trend towards better economics, PV cannot easily gain a higher market
penetration. Several known obstacles are:

Most power utilities are based on traditional and conventional power generation,
preferring oil, gas, and coal (even nuclear) as power generation source;
Electricity markets are controlled by the power utilities, whereas liberalized
markets are necessary for RE and PV developments;
Further BIPV technology cost reduction is dependent on the worldwide market.
The existing PV markets are mainly in the developed world. The Asian PV
market, particularly BIPV could well start in Malaysia. However, the enabling
environments need to be established first in order to sustain a PV market.
These issues will be strategically addressed by the MBIPV project activities.
BIPV technology application involves various engineering and architectural issues. It
can be applied without much difficulty once the necessary knowledge is built. The PV
technology is well proven for over 20 years and hundreds of MWp of capacity
installed worldwide. The implementation of the MBIPV project would help create the
required enabling environment that would address the policy, institutional, technical,
and information needs to support a sustainable BIPV market. Obviously, such
program would require the full cooperation and commitment of the stakeholders to be
successful. The MBIPV project was developed with the full cooperation of key
stakeholders and the GoM to ensure smooth implementation and success.

The off-grid market works significantly different than the grid-connected PV market.
The sustainability of an off-grid market also relies heavily on continuous subsidies
from the government. The MBIPV project will focus on grid-connected PV in urban
buildings and will create several synergies to generate added values and better
economics for BIPV systems. With the developed enabling environment and improved
awareness, the BIPV market in Malaysia can grow significantly faster than the off-
grid market. This is the case similar to those in Germany and Japan. The innovative
application of PV in buildings, as well as making such application commercially
driven will also provide greater success potential.
Comment:
Alternatives energy choice in supporting energy efficiency both on the production side
(included transportation of electricity) and demand side (residential energy efficiency
activities have shown in the past good results) could lead to at least equivalent benefits
in terms of environment and development at much better cost effectiveness.

Response:
Currently, Malaysia is actively promoting energy efficiency (EE) and renewable Project
energy (RE), the latter as the fifth fuel resource. Demand-side-management (DSM) Brief: Para
programs are actively pursued by the Energy Commission (EC) in parallel with on- 32, 43, 56,
going UNDP/GEF supported projects, i.e. Malaysia Industrial Energy Efficiency 22
Improvement Project (MIEEIP) and Biomass-Based Power Generation and
Cogeneration Project (Biogen). The MBIPV project will complement and create
synergy with these initiatives. Analysis conducted during PDF-B exercise for this
project indicated viable long-term cost reduction of BIPV technology. The proposed
project will fulfill the objectives of GEF Operational Program 7 and Climate Change
Strategic Priority No. 5 (S5).

The cost effectiveness of BIPV in comparison to DSM may be lower at the moment.
Nevertheless, the technical and economic potentials of BIPV applications in Malaysia
and in the ASEAN region are high (compared to those countries in the temperate
zone), and this project will pave the way to facilitate these applications. However, the
effort has to start now in order to arrive to this situation sooner. At the end of the
MBIPV project, adequate information and facts will be available to determine the
value and cost effectiveness of BIPV technology.
Comment:
We suggest that such alternatives should be analyzed before taking into consideration
upgrading the local industry towards local manufacturing.
Response:
Efforts to improve the efficiency of generating, distributing and utilizing electricity Project
have been initiated and pursued in Malaysia since the 80s. Improvements on the Brief: Para
supply side require the utility’s (mainly the Tenaga Nasional Berhad or TNB) 7, 12, 32
commitment. TNB has always been exerting its efforts to improve the electricity
generation and supply. On the demand side, the ongoing projects such as the UNDP-
GEF supported MIEEIP (Malaysia Industrial Energy Efficiency Improvement Project)
and the Energy Commission’s (ST) Demand Side Management (DSM) Project are the
main initiatives that addresses energy efficiency in the industrial, commercial and
residential sectors. In addition, the use of biomass for power generation is being
promoted in the country’s palm oil industry through another UNDP-GEF funded
project (Biomass-based Power Generation & Cogeneration Project). This project is in
line with the country’s objective to have renewable energy (RE) as the fifth fuel
resource. Analysis made during the PDF-B phase of the MBIPV project has identified
the technical and long-term commercial potential, as well as the expected benefits to
be gained from BIPV technology application. The BIPV benefits are expected to
complement the on-going efforts to promote EE and RE in the country. Furthermore,
the availability and reliability of the solar energy potential, which is 1.3 times higher
than Central European countries and is relatively constant throughout the year, make it
highly relevant to develop BIPV in Malaysia. Apart from producing electricity, BIPV
is expected to contribute to the reduction of electricity distribution losses, reduce the
requirement for conventional peak energy supply, and enhance DSM initiatives. It is
generally viewed as something that would immensely complement the country’s
ongoing EE and RE efforts.

The local PV industry is one of the important drivers behind BIPV technology Project
application. Hence, it has to be educated and its capacity upgraded on all relevant Brief: Para
aspects of BIPV technology applications in order to support and sustain BIPV market 24-26,
developments. The local BIPV market will take-off when there is widespread interest 74(4.1-4.3)
and support from the local PV industry. The MBIPV project will catalyze the local
BIPV industry to enable it to provide quality services and manufacture different BIPV
products to meet the demand and expectation of the local market.
SWITZERLAND
Comment:
Grid connected PV is less expensive than stand-alone off grid PV. But the reasons for a market to
develop are quite different for both options:

1. Stand-alone off-grid PV has a niche market where no other options are available. It
helps in giving access to pre-electrification (only lighting) to generally backward
areas. The market potential does not come from the comparison against other
electricity sources. Many of the PV sales could not have been initiated without the
support of specific programs.

Response:
The stand-alone off-grid PV for rural electrification purpose is heavily dependent on Project
Government financial assistance (subsidy). In Malaysia, the majority end-users are Brief: Para
those that are not able to afford and pay for the system. As such, the PV application 19, 37, 46,
will not be sustainable without continuous Government support. BIPV on the other 47
hand is targeted for urban application where the targeted end-users have the financial
means to pay and own the PV system. Nevertheless, a specific program will be
required in order to create the public awareness, educate the end-users, and develop
the industry, the market and the enabling environments. With an external support from
GEF, the Government can create the catalyst for local BIPV market through the
national BIPV program. In the years to come, the specially introduced financial
assistances and incentives can be gradually removed as the market develops. Hence,
BIPV technology has a better potential to be self-sustainable and be commercially
driven.

2. BIPV has the advantage and disadvantage to be grid-connected: 1st) its efficiency is
higher as there is no storage losses, any solar energy available in excess can be fed
back to the grid, 2nd) as it is grid connected, the energy price that it produces can be
directly compared to the other cheaper sources of electrical energy. At present PV
energy costs, the motivation to go for BIPV cannot be based on a purely financial
analysis (about 5-6 Euro/Watt Peak). A potential BIPV buyer must have other
motivation to go for it. This motivation can be either image based, or any other reason.
Incentives such as tax exemption and feed-in higher tariffs are not sufficient to make it
financially attractive.

Response:
Agree. Financial incentive alone, though it is a significant factor in the ASEAN Project
region, cannot guarantee the interest to install BIPV. Therefore, the MBIPV project Brief: Para
addresses other critical issues such as public education and awareness creation, 59, 79, 82
promotion of BIPV technology, improving the PV industry quality, creating good
BIPV showcases and demonstration projects, and others. The aim is to improve public
confidence on, and image of, BIPV technology, as well as portraying BIPV as an
exclusive must-have item so as to create aspiration to own BIPV among the people, as
part of their lifestyle. The concern regarding conservation of the natural environment
will also be the key motivation for end-users to install BIPV. The attractive financial
incentives including a higher feed-in tariff will immediately capture public’s attention
and will create the initial impetus for BIPV market development.
Comment:
Malaysia alone may not be a sufficient market to be one of the leaders in cost
reduction. The impact in terms of CO2 reduction remains marginal.

Response:
Agree. Malaysian market alone will not be sufficient to achieve significant long-term Project
cost reduction for a sustainable BIPV market. Therefore, the MBIPV project is Brief: Para
expected to generate a spillover effect to neighboring ASEAN markets. The 71(1.7-1.8),
experiences and lessons learned from the MBIPV project will be significant in 65
creating widespread BIPV market in the ASEAN region. One of the objectives of the
MBIPV project is to strengthen the local BIPV capacity. The improved local capacity
would be of great value to countries (e.g., Thailand and China) that have strong
interest to develop their local PV industry. Additionally, the ASEAN New and
Renewable Sources of Energy – Sub-Sector Network (NRSE-SSN) framework will
foster the sharing of information among the ASEAN countries, and is expected to
create opportunity for regional cooperation that could lead to a widespread regional
BIPV market. Thus, in the long-term, the MBIPV project is expected to create
widespread impact to other ASEAN countries that will lead to substantial CO2
reduction.
Comment:
Synergies with other programs (GEF projects on energy efficiency and biomass) are
given as an advantage, but no specific activities are mentioned.

Response:
During PDF-B activities, stakeholder discussions have addressed the possible synergy Project
between the MBIPV project and the other on-going EE and RE initiatives in the Brief: Para
country. In principle, the MBIPV project is expected to complement the national DSM 43
program (on promotion activity), to maximize the resources with Biogen project on
RE policy and SREP activities, as well as to complement the infrastructure framework
developed by the MIEEIP project. Depending on the status and success of the
respective on-gong programs/projects, the MBIPV project will be optimally integrated
once the MBIPV project is confirmed, where further detailed stakeholder discussions
will be conducted. As such, more specific activities for the synergy can be described
during the MBIPV project inception stage.
Comment:
The incentives mentioned are risky in the sense that one does not know how long they
are going to be in place.

Response:
One of the main targets of the MBIPV project is to create a sustainable follow-up Project
BIPV program. The fundamental idea is to ensure that a national BIPV program is Brief: Para
included in the 10th and subsequent Malaysia Plans. As a start, the MBIPV project will 78-79,
be implemented during the 9th Malaysia Plan (2006-2010) and will become the Annex A3
benchmark for the formulation of the sustainable follow-up BIPV programs. The
anticipated cost to the GoM to sustain future national BIPV programs is reasonable
and would not be a stumbling block. Once the national BIPV program is included in
the subsequent Malaysia Plans, it is almost definite that the respective incentives
developed for those specific programs will be in place.
Comment:
BIPV is looked at as an independent system to be marketed irrespective of the
building performance. Very large differences in energy requirement come from the
design process. It seems important that first energy efficient designs (adapted
architecture, high performance ventilation and cooling systems, high performance
lighting) are implemented. The energy saving potential in this process is usually much
higher than what can be produced by a BIPV. BIPV should only be supported by
incentives when a building design has shown to be of high-energy performance. This
process could then become a marketing incentive (provide support for energy efficient
design, show the financial savings achieved in this process, and keep this savings to
finance the BIPV component.). In fact, it has to be remembered that 2 MWp (target of
BIPV by 2010) does not represent more than the power required by a cooling plant of
one large administrative building or commercial center.

Response:
An energy efficient building will be designed with due consideration of the cost- Project
effective measures. At this moment, BIPV is less cost-effective compared to EE Brief: Para
equipment or passive solar building design. Normally, BIPV will be considered if the 41, 52, 66-
building is planned to be super energy efficient, where the annual energy consumption 67, 69
would be extremely low (offset by energy from BIPV). BIPV systems would typically
serve as an integral component of the building envelope (e.g., as a shading device,
roof, etc.). The building industry should also realize that BIPV could provide an
opportunity for the building to have a unique feature, that of being able to generate
enough electricity to meet its power requirements, and sell excess electricity to the
grid. This concept together with some basic EE features may result in a higher market
value for the building space and rental, as demonstrated in Europe. Integrating BIPV
concept in the early design process will result in much better cost effectiveness, as
BIPV design can be optimized to suit the need and the BIPV system can also offset
some of the building material costs. Another key point is that by using BIPV, the
building roof or wall can generate income in comparison to the conventional roof and
wall that do not.

Today, many experts from the PV and building industries have adopted this holistic
design approach. In addition, various international working groups, such as the IEA-
PVPS Task 7, have set up guidelines to support this approach. The MBIPV project
activities will also address these issues among the local industry, based on the
international experiences.

In the case of existing buildings, we agree with the comment that it would be more
practical to implement first energy conservation and energy efficiency measures, and
from the savings realized from these, building owners can opt to consider other retrofit
measures such as BIPV technology to further improve the buildings energy
performance.
Comment:
Unless a systemic approach, supporting energy efficient design of buildings is set up,
this project may not succeed in triggering the market of such a high cost technology.

Response:
The MBIPV project, among others, will target the architects and the building industry. Project
The Malaysia Association of Architect (PAM), the Public Works Department (JKR), Brief: Para
and the Construction Industry Development Board (CIDB) will be extensively 72, 84
involved in developing an integrated design system that will address EE and RE
(including BIPV) right from the early design stage. Within the MBIPV project
duration, the national guideline and standard on building design will be improved to
incorporate BIPV. In addition, there are other factors that will be required to trigger
the BIPV market development. In this case, the MBIPV project components have been
designed to systematically address all these factors at various levels.
USA
Comment:
The scientific and technical basis of the project is sound and, overall, project is well
conceived. It remains and open question, however, if everything will come together to
generate the hoped-for reduction in price of BIPV technology and resulting market
expansion of this environmentally friendly technology. Project addresses key issue –
price, purchaser interest in product, policy environment, financing, industry
development and sustainability beyond project termination – and is supported at this
point by a range of players, especially the government. M&E plans seem satisfactory.
Risk is moderate.

US position: Support, but request that prior to CEO Endorsement, Secretariat review
this project specifically for the issue of sustainability, cost effectiveness and
replicability and ensure adequate measures are in place.

Response:
Sustainability: In summary, to ensure the long-term BIPV technology sustainability, Project
the MBIPV project will catalyze the local market, develop the enabling environments, Brief: Para
enhance the local capacity, create and operationalize regional information 77-83,
dissemination networks, and incorporate national BIPV programs in subsequent 73(3.8)
Malaysia Plans. The specific measures are described in the MBIPV project component
activities. The impact and the results of the MBIPV project will also be monitored and
improved for better sustainability in the subsequent Malaysia Plan (10th Malaysia
Plan).

Cost effectiveness: The GEF contribution will be utilized to address the associated Project
incremental cost in implementing the MBIPV project. Priority is given to cover the Brief: Para
personnel and capacity development cost instead of targeting a large capacity of BIPV 92
system installations. This specific measure will ensure that BIPV market can continue
to grow beyond the MBIPV project as the necessary capacity, industry and
frameworks would have been established. Thus, BIPV sustainability will not be
dependent to continuous external funding from GEF or other international agency.

Replicability: In summary, BIPV technology replicability is addressed by enhancing Project

the local capacity to design, install, monitor, and maintain BIPV system. The Brief: Para
established enabling environments will ensure technically and commercially viable 65
conditions for continuous growth of BIPV application. The dissemination of
information via the ASEAN NRSE-SSN will promote BIPV replication in
neighboring countries. The specific measures to create BIPV replication are described
in the MBIPV project component activities.