executive summary: smart glass - navigant · pdf fileexecutive summary: smart glass...

Matthew UlterinoIndustry Analyst

Eric BloomSenior Analyst

EXECUTIVE SUMMARY: Smart Glass Electrochromic, Suspended Particle, Thermochromic, and Liquid Crystal Glass Technologies for Architectural and Transportation Applications: Global Market Analysis and Forecasts

NOTE: This document is a free excerpt of a larger report. If you are interested in purchasing the full report, please contact Pike Research at [email protected].

Published 2Q 2012

Smart Glass

© 2012 Pike Research LLC. All Rights Reserved. This publication may be used only as expressly permitted by license from Pike Research LLC and may not otherwise be accessed or used, without the express written permission of Pike Research LLC.

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Section 1 EXECUTIVE SUMMARY

1.1 Overview

Smart glass, also referred to as switchable, dimmable, or dynamic glass or glazing, varies the light transmittance and thermal properties of windows across a spectrum. Unlike “static” glass that is designed to improve the thermal and daylighting performance of buildings, but is restricted to set parameters, smart glass has properties that can be varied depending on changing ambient conditions and the needs of users and occupants. Switching states to allow more or less light through the glazing unit can occur in timespans ranging from seconds to minutes, depending on the size of the glazing area and the technology employed.

Four main technologies are available for smart glass applications in buildings and the transportation sector (automotive, aerospace, marine, and rail):

Liquid crystal

Electrochromic

Suspended particle

Thermochromic

Liquid crystal, electrochromic, and suspended particle materials react to electrical stimuli; thermochromic materials react to heat. Liquid crystal is used for interior applications only, whereas the other three technologies are suitable for use as exterior or façade materials.

Of these technologies, liquid crystal has the longest market history, as it has been used in interior privacy screens and wall partitions for the past 20 years. The technology is well-tested and known within the architectural design and specification community, though due to its price, it is still something of a niche product. It is not utilized to improve energy performance, but rather, serves aesthetic and other functional requirements. The cost of liquid crystal is forecast to fall as production volume increases due to greater product knowledge and confidence among designers and professionals specifying construction materials.

Compared to liquid crystal smart glass, which is limited to interior applications, the emerging smart façade glass (electrochromic, suspended particle, and thermochromic) promises many more applications and prospects. Windows are poor insulators and create heat gain and glare problems for building occupants. Buildings are becoming “glassier” at the same time they need to be increasingly energy efficient. Managing these two expectations – more glazing area and energy efficiency – is a design and technology challenge for the building industry. While window performance has improved substantially over the past 30 years through the use of spectrally selective coatings (to manage heat gain and glare) and low-emissivity (low-e) films (to improve insulation values), room for improvement still exists. Smart glass addresses the gap between better aesthetics and energy performance, enabling windows to adjust to a range of conditions so they can balance heat, light, and glare.

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Importantly from an energy performance perspective, smart glass can effectively utilize daylight for the passive lighting of buildings while reducing peak and ongoing cooling energy requirements. Projections of building energy performance show significant gains from the use of smart glass, as do other important, but harder to quantify metrics, such as occupant comfort and satisfaction.

Applications are also emerging in the transportation sector. These applications address heat gain and glare and balance them with the aesthetic and functional requirements of vehicle owners and occupants. Sunroofs and side windows for automobiles, exterior glass for yachts and cruise ships, and passenger windows for commercial airliners, private and corporate planes, and helicopters are good examples.

1.2 Smart Glass Adoption

The global market for flat glass used in architectural and transportation applications is substantial. This was demonstrated in a 2010 report by glass manufacturer Pilkington showing a global output of more than 50 million tons and yielding tens of billions of square meters of glazing products. Thus, the market potential for smart glass is significant; yet, many barriers stand in the way of the broader adoption smart glass. Chief among these are reliability and price.

Some third-party testing standards do exist for smart glass, and product manufacturers and accredited laboratories have undertaken additional laboratory testing. However, the body of real-world evidence supporting the industry’s claims of long-term performance is sparse. Glazing units are expected to last 20 to 25 years before requiring replacement, but since smart glass applications have only been in existence a fraction of that time, designers, engineers, and others specifying smart glass are concerned about the long-term performance and reliability of its dynamic features.

A second barrier is price. For architectural applications, the cost of installing a smart glass façade can be double or triple the cost of installing regularly specified high-performance static glass. Given that façade costs average 10% to 20% of overall construction costs on medium- to large-scale commercial building projects, the increased expense for a smart glass façade is substantial. Payback metrics for reduced capital expenditure in other areas of the building budget (external or internal blinds or shades, for example) and for energy savings during operation can help justify the expenditure. Still, the industry already has many other cost-effective, performance-effective, and widely tested ways to improve a building’s energy performance. Also note that smart glass glazing units can be much more expensive in the automotive and aerospace sectors, but the overall portion of glazing costs to total product manufacturing costs is far lower and thus more easily absorbed.

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Substantial new production capacity that is due to come online during 2013 will reduce production costs and help drive greater product adoption. The outlook for the period from 2012 to 2020 shows the smart glass market starting from a very low base and then growing substantially in production and value. Output will exceed 3,000,000 square meters (m2) annually.

Chart 1.1 Smart Glass Demand (Square Meters), World Markets: 2012-2020

(Source: Pike Research)

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Pike Research estimates that the market value for architectural and transportation smart glass (excluding auto-dimming rear-view mirrors, an already established application) is $84 million today. By 2020, the market will grow to $693 million worldwide at a compound annual growth rate (CAGR) of 30.1%. Growth will be especially strong in China, though the markets in North America and Europe are forecast to lead the market in terms of overall revenue.

Chart 1.2 Smart Glass Market Value (Revenue), World Markets: 2012-2020

(Source: Pike Research)

At the end of the forecast period of this report, smart glass will still be a niche product that commands significantly less than 1% of global flat glass production. Historically, however, glass and façade solutions that address energy efficiency have taken decades to develop from early application to broad-scale adoption. Should prices drop as projected and performance reliability data prove positive, the years 2012 to 2020 will have laid the foundation for more significant application in the years beyond.

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Section 8 TABLE OF CONTENTS

Section 1 ...................................................................................................................................................... 1 Executive Summary .................................................................................................................................... 1

1.1 Overview ....................................................................................................................................... 1 1.2 Smart Glass Adoption ................................................................................................................... 2

Section 2 ...................................................................................................................................................... 5 Market Issues .............................................................................................................................................. 5

2.1 Smart Glass Market Definition ...................................................................................................... 5 2.1.1 Smart Windows ....................................................................................................................... 5

2.2 State of the Smart Glass Industry ................................................................................................. 6 2.3 Smart Glass Applications .............................................................................................................. 7

2.3.1 Architectural / Construction ..................................................................................................... 7 2.3.1.1 Commercial ..................................................................................................................... 8 2.3.1.2 Residential ...................................................................................................................... 9

2.3.2 Transportation ......................................................................................................................... 9 2.3.2.1 Automotive .................................................................................................................... 10 2.3.2.2 Bus/Rail ........................................................................................................................ 10 2.3.2.3 Aerospace ..................................................................................................................... 10 2.3.2.4 Marine ........................................................................................................................... 11

2.4 Global Demand Drivers ............................................................................................................... 11 2.4.1 Legislation, Regulation, Incentives, and Subsidies ............................................................... 11

2.4.1.1 Energy Codes ............................................................................................................... 12 2.4.1.2 Demand-side Management and Ratepayer-supported Energy Incentive Programs.... 15

2.4.2 Green Building Trends .......................................................................................................... 16 2.4.3 Energy Management Systems .............................................................................................. 17 2.4.4 North American Demand Drivers .......................................................................................... 17

2.4.4.1 U.S. Department of Energy........................................................................................... 17 2.4.4.1.1. American Recovery and Reinvestment Act ............................................................. 17 2.4.4.1.2. Energy Efficiency & Renewable Energy Commercial Building Energy Alliance ...... 17 2.4.4.1.3. National Action Plan for Energy Efficiency .............................................................. 17 2.4.4.1.4. Commercial Building Partnerships ........................................................................... 18

2.4.5 European Demand Drivers .................................................................................................... 19 2.4.5.1 EU Energy Efficiency Directive ..................................................................................... 19 2.4.5.2 EU Energy Performance of Buildings Directive ............................................................ 19 2.4.5.3 Other European Market Dynamics ............................................................................... 19

2.4.5.3.1. Green Deal ............................................................................................................... 19 2.4.5.3.2. Passivhaus ............................................................................................................... 19

2.4.6 Asia Pacific Demand Drivers ................................................................................................. 20 2.4.6.1 China ............................................................................................................................. 20 2.4.6.2 Japan ............................................................................................................................ 21 2.4.6.3 South Korea .................................................................................................................. 22

2.4.7 Rest of the World Demand Drivers........................................................................................ 22 2.4.7.1 Latin America ................................................................................................................ 22 2.4.7.2 Middle East ................................................................................................................... 22 2.4.7.3 Africa ............................................................................................................................. 23

2.5 Global Barriers ............................................................................................................................ 23 2.5.1 Unproven Technology ........................................................................................................... 23 2.5.2 Cost Premiums over Conventional Windows ........................................................................ 24

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2.5.3 Other Barriers ........................................................................................................................ 26 Section 3 .................................................................................................................................................... 28 Technology Issues .................................................................................................................................... 28

3.1 Glass Performance ..................................................................................................................... 28 3.1.1 Chromogenic Materials ......................................................................................................... 29

3.2 Smart Glass ................................................................................................................................. 30 3.2.1 Smart Glass Compared to Other Window Glass Technologies ............................................ 30

3.3 The History of Smart Glass ......................................................................................................... 31 3.3.1 Before 2000 ........................................................................................................................... 31 3.3.2 2000 to Today ........................................................................................................................ 31

3.4 Smart Windows Technical Approaches ...................................................................................... 33 3.4.1 Liquid Crystal ......................................................................................................................... 33 3.4.2 Suspended Particle ............................................................................................................... 34 3.4.3 Electrochromic ....................................................................................................................... 34 3.4.4 Thermochromic ...................................................................................................................... 35

3.5 Differentiating Features ............................................................................................................... 35 3.5.1 Dimming Control .................................................................................................................... 35 3.5.2 Response Rate ...................................................................................................................... 36 3.5.3 Suspended Particle: Instantaneous to Less than 15 Seconds Controllability ....................... 36 3.5.4 Electrical Power Requirements ............................................................................................. 36 3.5.5 Ease of Installation ................................................................................................................ 37 3.5.6 Durability ................................................................................................................................ 37

3.6 Scalability .................................................................................................................................... 37 3.7 Smart Glass Costs and Benefits ................................................................................................. 38

3.7.1 Costs ..................................................................................................................................... 39 3.7.1.1 IGU Costs ..................................................................................................................... 39 3.7.1.2 Total Façade Costs ....................................................................................................... 40 3.7.1.3 Transportation Costs .................................................................................................... 41

3.7.2 Benefits .................................................................................................................................. 42 3.7.2.1 Energy Demand Benefits .............................................................................................. 42 3.7.2.2 Cooling and Lighting System Benefits .......................................................................... 43 3.7.2.3 Built-in Window Shading Benefits ................................................................................. 43 3.7.2.4 Window Shading Maintenance Benefits ....................................................................... 43 3.7.2.5 View Preservation Benefits ........................................................................................... 43 3.7.2.6 Non-Building Applications Benefits ............................................................................... 44

3.8 Return on Investment .................................................................................................................. 44 3.8.1 ROI Model ............................................................................................................................. 44

3.8.1.1 ROI Range .................................................................................................................... 45 3.9 Retrofit Versus Initial Build .......................................................................................................... 46

Section 4 .................................................................................................................................................... 47 Key Industry Players ................................................................................................................................. 47

4.1 Asahi Glass Company ................................................................................................................. 47 4.2 ChromoGenics AB ...................................................................................................................... 47 4.3 Citala ........................................................................................................................................... 47 4.4 Corning Inc. ................................................................................................................................. 47 4.5 DuPont ........................................................................................................................................ 48 4.6 EControl-Glas .............................................................................................................................. 48 4.7 FININD Group ............................................................................................................................. 48 4.8 Gentex Corp. ............................................................................................................................... 49 4.9 GlasNovations Ltd. ...................................................................................................................... 49 4.10 Guardian Industries Corp. ........................................................................................................... 49 4.11 Hitachi Chemical Co., Ltd. ........................................................................................................... 49 4.12 iGlass .......................................................................................................................................... 50

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4.13 Innovative Glass Corp. ................................................................................................................ 50 4.14 InspecTech Aero Service, Inc. .................................................................................................... 50 4.15 Pleotint, LLC ................................................................................................................................ 50 4.16 Polytronix, Inc. ............................................................................................................................. 50 4.17 PPG Industries ............................................................................................................................ 51 4.18 Pro Display .................................................................................................................................. 51 4.19 Pulp Studio, Inc. .......................................................................................................................... 51 4.20 RavenBrick, LLC ......................................................................................................................... 51 4.21 Research Frontiers Inc. ............................................................................................................... 52 4.22 SAGE Electrochromics ................................................................................................................ 52 4.23 Saint-Gobain SA.......................................................................................................................... 52 4.24 SmartGlass International Ltd. ...................................................................................................... 53 4.25 Soladigm, Inc. .............................................................................................................................. 53 4.26 SPD Control Systems ................................................................................................................. 53 4.27 SWITCH Materials....................................................................................................................... 54 4.28 Tilse GmbH ................................................................................................................................. 54 4.29 US e-Chromic LLC ...................................................................................................................... 54 4.30 VELUX ......................................................................................................................................... 54

Section 5 .................................................................................................................................................... 55 Market Forecasts ....................................................................................................................................... 55

5.1 Smart Glass Adoption ................................................................................................................. 55 5.1.1 High-Profile Applications for Smart Glass ............................................................................. 56 5.1.2 Smart Glass Adoption Case Study ........................................................................................ 57 5.1.3 Smart Glass Adoption Forecast ............................................................................................ 58

5.2 Smart Glass Cost Forecast ......................................................................................................... 60 5.3 Market Size by Application .......................................................................................................... 61

5.3.1 Architectural ........................................................................................................................... 61 5.3.2 Transportation ....................................................................................................................... 63

Section 6 .................................................................................................................................................... 65 Company Directory ................................................................................................................................... 65 Section 7 .................................................................................................................................................... 67 Acronym and Abbreviation List ............................................................................................................... 67 Section 8 .................................................................................................................................................... 69 Table of Contents ...................................................................................................................................... 69 Section 9 .................................................................................................................................................... 72 Table of Charts and Figures..................................................................................................................... 72 Section 10 .................................................................................................................................................. 73 Scope of Study .......................................................................................................................................... 73 Sources and Methodology ....................................................................................................................... 73 Notes .......................................................................................................................................................... 74

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Section 9 TABLE OF CHARTS AND FIGURES

Chart 1.1 Smart Glass Demand (Square Meters), World Markets: 2012-2020 ...................................... 3 Chart 1.2 Smart Glass Market Value (Revenue), World Markets: 2012-2020 ........................................ 4 Chart 3.1 Smart Glass Patent Filings, United States: 2006 and 2011 .................................................. 32 Chart 5.1 Smart Glass Demand (Square Meters), Market Distribution by Country/Region, World Markets: 2012-2020 .................................................................................................... 58 Chart 5.2 Smart Glass Market Value (Revenue) by Technology, World Markets: 2012-2020 ............. 59 Chart 5.3 Smart Glass Unit Cost (OEM to Installer) by Technology, World Markets: 2012-2020 ........ 60 Chart 5.4 Smart Glass Demand (Square Meters) by Technology, Architectural Sector, World Markets: 2012-2020 .................................................................................................... 61 Chart 5.5 Smart Glass Market Value (Revenue) by Technology, Architectural Sector, World Markets: 2012-2020 .................................................................................................... 62 Chart 5.6 Smart Glass Demand (Square Meters) by Technology, Transportation Sector, World Markets: 2012-2020 .................................................................................................... 63 Chart 5.7 Smart Glass Demand (Square Meters) by Application, Transportation Sector, World Markets: 2012-2020 .................................................................................................... 64

Figure 2.1 Energy Efficiency Market and Policy Dynamics by Country ................................................. 12 Figure 2.2 ASHRAE Code Stringency .................................................................................................... 13 Figure 2.3 Optimizing Energy Performance through Glazing Area and Daylighting .............................. 14 Figure 2.4 Existing and Prospective Zero Energy Buildings Regulations .............................................. 14 Figure 2.5 Electric Utility Lost Revenue or Decoupling Mechanism, by State ....................................... 15 Figure 2.6 World Green Building Council Activity ................................................................................... 16 Figure 2.7 Residential Retrofit Working Group Benefits Assessment .................................................... 18 Figure 2.8 Flat Glass Demand, World Markets: 2009 ............................................................................ 20 Figure 3.1 Low-e Window ....................................................................................................................... 29 Figure 3.2 Smart Glass Dynamic Range ................................................................................................ 31 Figure 3.3 Liquid Crystal Privacy Glass .................................................................................................. 33 Figure 3.4 Suspended Particle ............................................................................................................... 34 Figure 3.5 Electrochromic IGU ............................................................................................................... 34 Figure 3.6 Thermochromic ...................................................................................................................... 35 Figure 3.7 Building Energy Consumption, Commercial and Residential (2005) .................................... 42 Figure 3.8 ROI Comparison Factors ....................................................................................................... 44 Figure 5.1 Mercedes “Magic Sky Control” Sunroof ................................................................................ 56 Figure 5.2 Boeing 787 Dimmable Window ............................................................................................. 56 Figure 5.3 Chabot College ...................................................................................................................... 57

Table 2.1 Architectural Demand for Flat Glass, World Markets: 2009 .................................................... 7 Table 2.2 Automotive and Transport Demand for Flat Glass, World Markets: 2009 .............................. 9 Table 3.1 IGU Cost Comparison, Static vs. Smart Glass: 2012............................................................ 39 Table 3.2 Façade Cost Comparison, Static vs. Smart Glass, North America and Northern Europe: 2012 ......................................................................................................................... 40 Table 3.3 Simplified ROI Calculation ..................................................................................................... 46

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Section 10 SCOPE OF STUDY

Pike Research has prepared this report to present an analysis of the market for smart glass in architectural and transportation applications (excluding auto-dimming rear-view mirrors). The report offers a comprehensive overview of the key technologies for smart glass, as well as the drivers and barriers to product adoption. Market forecasts are provided for production volume and value by technology. Pike Research also analyzes the smart glass market by sector (architectural and transportation), in addition to providing estimates of demand in the major global regions. The smart glass market forecasts cover a timeline starting in 2012 and extending to 2020.

SOURCES AND METHODOLOGY

Pike Research’s industry analysts utilize a variety of research sources in preparing Research Reports. The key component of Pike Research’s analysis is primary research gained from phone and in-person interviews with industry leaders including executives, engineers, and marketing professionals. Analysts are diligent in ensuring that they speak with representatives from every part of the value chain, including but not limited to technology companies, utilities and other service providers, industry associations, government agencies, and the investment community.

Additional analysis includes secondary research conducted by Pike Research’s analysts and the firm’s staff of research assistants. Where applicable, all secondary research sources are appropriately cited within this report.

These primary and secondary research sources, combined with the analyst’s industry expertise, are synthesized into the qualitative and quantitative analysis presented in Pike Research’s reports. Great care is taken in making sure that all analysis is well-supported by facts, but where the facts are unknown and assumptions must be made, analysts document their assumptions and are prepared to explain their methodology, both within the body of a report and in direct conversations with clients.

Pike Research is an independent market research firm whose goal is to present an objective, unbiased view of market opportunities within its coverage areas. The firm is not beholden to any special interests and is thus able to offer clear, actionable advice to help clients succeed in the industry, unfettered by technology hype, political agendas, or emotional factors that are inherent in cleantech markets.\

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NOTES

CAGR refers to compound average annual growth rate, using the formula:

CAGR = (End Year Value ÷ Start Year Value)(1/steps) – 1.

CAGRs presented in the tables are for the entire timeframe in the title. Where data for fewer years are given, the CAGR is for the range presented. Where relevant, CAGRs for shorter timeframes may be given as well.

Figures are based on the best estimates available at the time of calculation. Annual revenues, shipments, and sales are based on end-of-year figures unless otherwise noted. All values are expressed in year 2012 U.S. dollars unless otherwise noted. Percentages may not add up to 100 due to rounding.

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Published 2Q 2012

© 2012 Pike Research LLC 1320 Pearl Street, Suite 300

Boulder, CO 80302 USA Tel: +1 303.997.7609

http://www.pikeresearch.com

This publication is provided by Pike Research LLC (“Pike”). This publication may be used only as expressly permitted by license from Pike and may not otherwise be reproduced, recorded, photocopied, distributed, displayed, modified, extracted, accessed, or used without the express written permission of Pike. Notwithstanding the foregoing, Pike makes no claim to any government data and other data obtained from public sources found in this publication (whether or not the owners of such data are noted in this publication). If you do not have a license from Pike covering this publication, please refrain from accessing or using this publication. Please contact Pike to obtain a license to this publication.

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