Climate change and global warming have become increasingly concerning issues, with the building sector being a significant contributor due to its high energy consumption and carbon emissions. Building-Integrated Photovoltaic (BIPV) applications present a potential solution, particularly for existing buildings where roofs and facades provide substantial installation areas. However, practical implementation faces limitations, especially regarding initial investment costs. The economic benefits generated by building extensions, currently being promoted in European renovation projects, offer an opportunity to facilitate wider Photovoltaic adoption. However, as a non-traditional building cladding material, photovoltaic installations can significantly impact the built environment. This study examines how to combine photovoltaic applications with building extensions from a thermal environment perspective, aiming to enhance pedestrian-level outdoor thermal comfort while improving building energy production capacity. The research integrates qualitative and quantitative methods to propose comprehensive optimization strategies for improving outdoor thermal environments in existing residential areas. By emphasizing the importance of combined simulation analysis in early design stages, this study contributes to residential renewal practices, providing insights for sustainable energy retrofit and urban development.