Building integrated photovoltaics (BIPV) consists of PV panels that are integrated into the building as part of the construction. This technology has advantages such as the production of electricity without necessary additional land area. This paper provides a literature review about the recent developments in urban building energy modelling, including tools and methods, and the effect of PV systems on building outdoor and indoor environments. It is also intended to provide a critical analysis on how PV systems affect the urban environment, both from an energy and a comfort point of view. The urban heat island development is introduced and related with the existence of PV systems. It is concluded that data acquisition is still a weakness in urban building energy modelling, especially in what concerns non-geometric data, which leads to a major source of errors. The availability of data is a challenge because frequently they are not accessible, due to privacy, high-cost or other reasons. Also, methodologies to develop precise archetypes for creating urban building energy models are lacking.