Why Smart Windows Will Become Big Business09 Nov 2011 • by Natalie Aster
NanoMarkets believes that the market for smart windows will grow substantially over the next eight years, becoming a billion-dollar market by 2015 and then more than doubling by 2018. There are several driving factors for this growth, which are discussed in the main body of the report “Next-Generation Smart Windows: Materials and Markets: 2011” and outlined here:
Added value: The smart window product types we discuss in this report add significant value to conventional windows in certain important market niches. Yet, the overall size of the worldwide flat glass market—some six billion square meters today,—is sufficient that even niches of well below 1 percent of the market can generate substantial sums of money from high-value smart windows.
Green building: One of the major driving factors for the growth of smart windows is the green-building movement. Smart windows—the electrochromic and thermochromic varieties—offer shading of solar light and heat to reduce building cooling loads in warm periods, yet allow greater amounts of light and heat in during warm periods, reducing heating and lighting loads as well. These improvements in energy efficiency are typically required to meet green certification requirements, and they are often preferable to mechanical louvers or other, more complex, alternatives. And it is not only certified buildings that will capture these gains.
Many energy saving technologies spill over into more mainstream building markets, where the energy savings they provide are just as real.
Convenience: Another driving factor in the growth of smart windows is convenience. In the case of electrochromic smart windows, convenience features like controlled visibility, partial dimming, and privacy—in interior or exterior windows—provide important added value and are controllable at will. Segments of the market will pay for this convenience, and because the smart windows are high in value even small penetrations will produce large sums of money.
These convenience benefits cover not only architectural markets but also automotive, other transportation, and other types of markets as well. Electrochromic glass already has a foothold in automotive markets with automatically dimming rear-view mirrors and in commercial transportation markets with controlled shading windows in aircraft passenger windows and isolation screens for train operators. Increased penetration in these transportation and architectural markets is coming, along with new penetrations in things like appliances, household mirrors, and toys.
Self-cleaning window markets will grow because of the value these windows provide through reduced manual cleaning and improved clarity. In commercial and other business settings, the reduced labor has a definite value. In residential settings that value may be harder to quantify. But residential lifestyles are continuing a trend of smaller and smaller amounts of time available for maintenance activities including window cleaning, meaning that the (opportunity) cost of washing windows is rising.
Next-Generation Smart Windows: Materials and Markets: 2011
Published: March 2011
Price: US$ 2,495.00
Opportunities for Materials and Specialty Chemical Firms
The growth of smart windows markets over the next eight years means that firms that produce smart coatings and their components have increasing opportunities to supply those materials to smart windows manufacturers. This opportunity is greater in volume terms (square meters of coatings used) for self-cleaning coatings and electrochromic coatings than it is for thermochromic coatings, but there is still a lot of money to be made by selling materials to thermochromic windows manufacturers.
In dollar terms, the biggest opportunities for smart coating firms are in supplying electrochromic coating materials to the smart window manufacturers. Electrochromic windows alone will grow to well over a billion dollar market by 2018 and a significant portion of the cost of those windows will be the electrochromic coatings.
There are technical opportunities as well, since smart coatings suppliers can expect to sell greater volumes of materials—and in some cases, at higher prices—if they produce superior functionality compared to competitive materials. These technical opportunities include:
Developing electrochromic coatings that are less costly and that provide a broader dimmable range. The limited dimmable range of some electrochromic and similar technologies limits their usefulness, and increasing that range would drive faster adoption—and increased sales of the materials that allow it. Electrochromic windows are also the most costly of the smart windows and lowering the cost of the coatings will also boost growth rates.
For self-cleaning smart coatings, technical opportunities to increase sales through providing products with superior functionality. Some self-cleaning windows have catalytic action that breaks down organic dirt in sunlight. The opportunity is to produce coatings that break down dirt—and perhaps non-organic kinds of dirt—more efficiently, especially if it can be done without direct sunlight.
Opportunities for Architectural Windows Firms
The opportunities for architectural windows firms are clear: architectural smart windows will grow to well over a billion-dollar market by 2018, with most of those revenues coming from exterior windows. Window suppliers stand to make substantial money by partnering with smart coatings suppliers and offering products including these smart functionalities. The higher value of these smart window product lines will increase their revenues.
Electrochromic smart windows are the largest revenue segment for architectural windows and will produce over $900 million by 2018. And because electrochromic windows have significant applications in both exterior and interior windows, there are substantial opportunities for innovative product designs, providing superior aesthetics or function—and superior pricing.
Such electrochromic windows—interior or exterior—can obviate the need for blinds and other additional window treatments, and this should be part of the marketing message, particularly for commercial and other business users. In many of these settings, window treatments present a significant need for ongoing cleaning and maintenance, one that can be avoided by using electrochromic windows instead.
Architectural applications are also the largest market for thermochromic windows, where the passively activated tinting essentially limits them to energy-saving uses. The monetary value of these opportunities for window suppliers is not as great as for the other smart window types, but they are still significant. The opportunity for window suppliers is to offer thermochromic products to customers who are concerned mainly with energy savings, and for whom the significant additional cost of electrochromic windows is too much.
Self-cleaning window offerings represent another large opportunity for windows suppliers, offering money savings not from energy efficiency but from a reduced need for window cleaning labor. By using self-cleaning windows, commercial and residential buildings can become lower in maintenance, something that the owners of those buildings will be willing to pay a premium for in many cases.
Opportunities in Automotive and Other Markets
The automotive market provides the next largest source of smart window opportunities for glass suppliers, after the architectural markets:
The earliest opportunity for glass suppliers is for electrochromic glass, which is already established in self-dimming automotive mirrors. The automotive market can be expected to begin using electrochromic glass in other places—like side windows and sunroofs—before too long. Glass firms that have forged the right relationships with auto manufacturers will be the first to benefit.
There will also be some similar opportunity for thermochromic glass in sunroofs, but at a smaller dollar amount. While thermochromic sunroofs have appeal for limiting the heat that enters an automobile, the on-demand control of an electrochromic version offers greater value and will generate more money, especially since either option will make up only a small portion of automobile costs.
NanoMarkets believes that self-cleaning glass, though it will not emerge for a few years, will offer even greater opportunities than electrochromic glass in the automotive market by the end of the eight-year period covered by this report. Manual cleaning of automotive windows is universal and frequent, and the value added from self-cleaning glass is great in terms of both appearance and safety. Now is the time for self-cleaning glass producers to form their market development relationships with auto manufacturers.
Other transportation markets are smaller, and will offer similar but smaller money-making opportunities. Like in the automotive segment, electrochromic glass has already made its way into some parts of this market, in trains and newly in aircraft passenger windows. The other smart window types will also produce some opportunities, on a similar schedule as in automotive markets.
Finally, there are also opportunities for glass suppliers to produce smart glass products for other markets. These would include self-cleaning glass for things like shower doors, dishwashers, clothes washers, and perhaps cooking appliances. NanoMarkets expects modest money to be made in these applications, around $50 million by 2018.
Electrochromic glass is the bigger market opportunity for glass suppliers outside the architectural and transportation markets, amounting to about $140 million by 2018. Again, such smart glass applies to appliances, but to a wider range of appliances than self-cleaning glass does. In addition, the switchable functionality of electrochromic glass provides opportunities for suppliers to develop new, innovative uses for some market niches, such as toys, furniture, and handheld devices.
More information can be found in the report “Next-Generation Smart Windows: Materials and Markets: 2011” by NanoMarkets.
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