Electrochromic technologies: The quiet revolution underway
Windows are a large energy efficiency opportunity, with the US Department of Energy estimating that retrofitting single pane windows alone could save $12 billion annually. While traditional energy efficiency options include insulation and double-paned glass, advancements in electrochromic (EC) technology may accelerate improvements in window energy efficiency. EC technology changes the tint of transparent surfaces by applying voltage, which enables modulation of the light coming through the surface. Photochromic and thermochromic windows are related solutions – as the names imply, such solutions respond to light and heat.
To provide a deeper dive into innovation in EC technology, CTG interviewed Luke Pustejovsky, CEO of Wisp.
Ken-Ichi (CTG): You’ve characterized recent activities in EC as a “quiet revolution” – what kinds of developments have caught your eye?
Luke (Wisp): There’s an accelerated evolution in this category. In terms of patent field volume and density, in terms of academic and research grants, and in terms of well-funded companies racing to make a retrofit solution. The university activity we’re seeing is at MIT (where I am this week), University of Texas, Cambridge, UC Berkeley, Stanford, Georgia Tech, University of British Columbia and Novosibirsk. For research grants, we’re seeing NSF-funded and ARPA-E funded projects in the U.S. and very interesting projects funded by Horizon 2020 in Europe. For the venture-funded players that most industry watchers are evaluating, Switch, Kinestral, and a couple of others are working on approaches for cost-effective retrofit solutions. Or “EC 2.0.” Some investors see windows as a “platform play” just because of the sheer volume of square footage. What if existing windows became screens? What would that look like? EC 2.0 is both the next evolution of electrochromics — to make it a retrofit — and also the more aspirational Tony Stark stuff.
Ken-Ichi: What were some of the challenges that early ventures in EC had trouble solving?
Luke: Some of the existing electrochromic players like Sage — which is now owned by Saint Gobain — have done tremendous work in educating the market of architects, engineers and contractors about the benefits of dynamic glass. Most of the top 50 architects in the major municipal statistical areas in North America now know that smart glass empowers occupants to get rid of blinds and shades, reduce unwanted heat and glare, and enjoy the health and cognitive benefits of natural daylighting. So kudos to the well-funded existing players in Faribault, MN and in Milpitas, CA. The Department of Energy supported these efforts with early money and test beds, and Steve Selkowitz and Marc La France were real pioneers and risk-takers in EC 1.0. Same with Kevin Powell at GSA Green Proving Ground and our friends at DoD’s ESTCP program.
What’s been tough for EC 1.0? I think when you hear what the market of AEC’s is saying, it’s pretty clear. The amber color in the off-state has been a turn-off, and the blue state is challenging at the darkest levels. Designers have trouble with it, but it’s a function of the tungsten metal oxide they use. Similarly, the switch time of 20+ minutes is OK for the commercial market, but not so appealing for a smart home market. The optical quality is very good from these 1st innovators, but pin holes are fairly common and QA/QC makes overall manufacturing yields challenging. But the biggest challenge for them is cost. More typically, they can’t control the final customer price in the market. $100 – $150/square foot installed creates a high-end, niche market. Great for LEED Platinum buildings where money is no object, but challenging for the larger building stock.
Ken-Ichi: Which of those challenges is the biggest one that remains unsolved for EC2.0 companies?
Luke: The biggest and most obvious challenge that EC 2.0 companies are solving is capital expense for manufacturing. Public reports show $125MM – $150MM CAPEX spend for an EC window manufacturing facility that could make 4-5M square feet of product each year. But demand might be only 20% of capacity, even though we hope the uptake will be faster than that. Roll-to-roll manufacturing (as opposed to vacuum deposition) may be a path to reducing capex. Maybe even radically.
In addition to capex, three other challenges include: (1) High OPEX (they need to reduce the bill of materials by about 75% — and signs show that this is possible), (2) Color: designers hate blue and would vastly prefer black – there are also promising developments here, and (3) Switching time (it has to be faster, even 100x faster than the 20 minute switching times for EC1.0). But mostly, it has to be a retrofit solution. If it’s only for high-end new construction, well, that’s a challenge, and it’s only 1-2% of the size of the retrofit market.
Ken-Ichi: What are some of the other smart home or smart building technologies that have provided examples or lessons for EC2.0 companies to draw from?
Luke: Ring, Nest, August, Hue, Dropcam. August is just fantastic because it solves an immediate problem. You don’t have to do key management for all of the people coming in and out of your home. You can safely, securely let service people in your house without being there. What a relief! We think that these kinds of point solutions are where it’s at. You want serotonin hits, positive interactions and consumer utility. As David Wu of Maveron says, it’s got to make consumer lives better. The best smart home products show opportunities for network effects, and take advantage of multi-pronged distribution. The best smart home product businesses have strategies for effectively staving off hardware commoditization.
I’m just as interested in what smart home and IoT manufacturers are doing to reach customers. So it’s important to study what Lowe’s and B8ta are doing to demo and sell these products. They have a 400-square-foot section of a Lowe’s store in Livermore (NorCal), and this is going to be followed by two more in SoCal (Burbank and Aliso Viejo). Check out Target’s IoT showcase in downtown San Francisco.
Ken-Ichi: Do EC companies believe one product can address both the residential and commercial building markets? Or are companies focusing attention on one, and if so, what product features or functions are different between the two?
Luke: Most EC companies are wise to choose a market and tailor their resources to fit. But CEOs are always flirting between being opportunistic and open enough to see the big opportunity, and being focused enough to have the best probability of really executing well and inspiring a team and board around a specific set of objectives. My sense is that some EC 2.0 companies are going to be able to do both commercial and residential building markets at the same time. But that same company would have a lot of trouble doing automotive and aerospace while they’re doing construction.
Ken-Ichi: Do you see EC2.0 companies being able to provide a product that has a strong economic purchase rationale, or will EC products need the same beautiful design and “gee-whiz” functionality that has helped products like Nest?
Luke: If installed costs get to $30/square foot, then there’s a strong economic rationale to buy EC 2.0 products. You get the benefit of natural daylighting and the health and cognitive benefits, you get the energy savings in the summer (and potentially in the winter), and you get rid of glare — so you don’t have to squint when you’re working on your iPad. You get rid of the fangle-toothed blinds and the quite formal curtain and child-strangling window covering cords, and dangerous inner and rear cords. Basically, no consumer loves their blinds and shades. Only plaintiff’s attorneys love blinds. They collect dust, they separate the occupant from nature, and they cost a lot relative to their inherent value. But well-designed EC 2.0 products can solve a problem, in the way that August Smart Lock solves a problem. Energy savings will be part of it, but most consumers don’t know how much they pay in monthly energy bills. To borrow from Maya Angelou, ‘they will forget what you did, but will remember how they make you feel.’ Successful EC 2.0 companies will make their customers feel better by maximizing access to light and views and minimizing unwanted heat and glare. EC 2.0 is about human-centered design and re-establishing our relationship with nature.