Revisiting Smart Windows

n-tech Research has been providing coverage of the smart windows market for more than a decade. Throughout the period of coverage, we have seen the market (like so many others) receive its fair share of hype and inevitable failure to achieve what was initially promised.

The concept of smart windows began with window films and tinting moving to lower-level passive technologies that responded to sunlight and advancing to active solutions that are dynamic, programmable and controllable. Given that building facades are so largely composed of glass, controlling light (heat) in the structure formed the basis of a business case for smart windows with the benefits of reducing glare, heat, improving working conditions, occupant satisfaction and employee productivity. While these benefits have been talked up by the vendor community the costs and complex retrofits have yet to see more than a limited embrace by the market.

What has changed since our last report issued in mid-2018 is that smart windows technology has not only matured but taken on an important conceptual role within smart or connected buildings ecosystem development. The integration of smart windows into this ecosystem via IoT, sensors and AI points to a more promising story in the future. Furthermore, the quest for decarbonization and support for climate change policy means that there is a strong impetus for smart windows technology from a variety of interests.  Based on n-tech’s research and analysis of the market, we believe that while new builds or major renovations will continue to drive the market and segments such as retrofits, airports and medical will be remain as important ancillary user segments.

Electrochromic Glass: SageGlass and View’ IPO

Electrochromic (EC) technology clearly is the dominant technology in smart windows space and is expected to remain so. When n-tech first started publishing analytical reports on smart windows, EC was seen as competing as several other kinds of smart windows. However, SPD and PDLC glass now hold advantages only in some niche areas.  Two firms, View and SageGlass are the two of the largest players in the EC smart windows space.

Sage: SageGlass, which was founded in 1989 became a wholly owned subsidiary of Saint-Gobain in 2012, and enjoys the benefits of Saint-Gobain’s geographic footprint, financial strength and broad R&D and innovation centers.  Sage claims to be the leader in the space with 1,000 plus installations, over 1,000 patents and presence (installations) in 27 countries. SageGlass also enjoys a strong presence in Europe – a region with government push towards energy efficient buildings. SageGlass is estimated to generate 50% of its revenue from Europe followed by 45% from the US.

View: The other large company in this space is View. After raising an extraordinary funding ($1.1 billion from SoftBank Vision Fund on top of the previously raised $750 million) the firm went public in March 2021, albeit to lackluster initial results. View’s CEO stated that, “For most companies, IPOs are exit events. For us, it is a financing event. We did not consider a public offering until now.” This is a curious statement that despite all of the money raised, additional financing is what the company messaged.

Financially, View increased revenues more than 20% year over year from 2018 to 2019. For the first nine months of 2020, it reported revenue of $24.5 million which points to possible acceleration in revenues of between 30-35% in 2020 vs 2019. While View’s revenue growth remains impressive, it is nowhere close to profitability yet – even after 13 years of operations and nearly $1.85 billion dollars raised, pre-IPO. View reported a net loss of $441.5 million in 2018, reduced that amount to $290 million in 2019 and it reported a net loss of $202 million for the first 9 months of 2020 which tracks toward similar results from a year earlier.

Despite the results to date, View’s IPO puts View’s market cap at $1.97 billion. Investors appear to be showing some confidence in the firm and the overall space.  View also has more than 1,000 patents to its credit, has a long list of clients and it also has both a brand name.

What Hope for Non-EC Glass?

There are other smart windows technologies, but most are niche at best.  The two technologies that are usually mentioned in studies such as ours are PDLC and SPD.  The former is really a specialist kind of privacy glass for offices, restrooms and other interior applications. We have heard several times that PDLC is not really a smart window technology.

SPD: SPD offers a much quicker fade and restore than EC, which gives it a huge advantage over EC for driver-facing windows in a moving vehicle.  However, it is expensive and has never caught on outside luxury vehicles.  Sales of SPD appear to have declined significantly in the past few years, although COVID-19 seems to have played a role in this decline.

To make matters worse, SPD may not only have failed to catch on for use in buildings, but EC glass is becoming more suitable to take on SPD on its own territory with the introduction of a new fast tint from some EC technology manufacturers. Kinestral is one such company that has EC smart window but claims to have achieved clear to full tint in approximately three minutes. This is an important development considering the fact that SageGlass and View have a timing of 10-30 minutes and hence are not suited for mobile applications where fast tint is required.

The only hopes for SPD are lower prices and a much higher rate of penetration.  While perhaps these are possibilities both are unlikely.

Smart Windows for Smart Buildings: A New Hope

The history of the smart windows business has not been a happy one.  It has frustratingly refused to move beyond niches and in the case of View, one of its most prominent firms, vast sums of money spent but with little to show for it. Nonetheless, n-tech believes smart windows still represents a business opportunity but as part of a smart buildings play.

In the new world of smart/connected buildings, these windows are only part of the story and must be discussed in the context of the Internet-of-Things, AI, HVAC, lighting, security systems and both conventional and sustainable energy systems.  Of course, this doesn’t mean that smart windows can’t be considered a business on its own, just that it is also part of a larger story and solution. Meanwhile, building management systems (BMS) are witnessing a shift towards open-protocols that allows easier integration and even hosting of third-party applications.

What n-tech is seeing is smart window technology manufacturers taking new ways to integrate into the smart buildings space.  Not only does this provide a way for these manufacturers to leverage the current boom in smart buildings to provide new hope for the formerly moribund smart windows sector but it also provides a way for them to distinguish their products from their competitors’ products.

In our opinion, the previous story of smart windows does not make sense any more, which is to say they won’t make money. In n-tech’s opinion, the linking of smart windows to smart buildings will be more profitable, either using well established building network protocols or with semi-proprietary smart window gateways. Some examples of current approaches along these lines are provided below.

Kinestral:  Since 2020, this company has partnered with Siemens Connect Ecosystem, which is a part of Siemens’ portfolio of smart building solutions. Siemens Ecosystem provides a platform for third-party solution providers to create solutions that integrate with Siemens’ platforms, including Desigo CC, the APOGEE Automation System, and related platforms.

Gauzy:  This is another another company that is focusing on a shared connected system, which will allow the existing smart building control system to control the Gauzy smart window. Gauzy’s smart window controller supports Lutron connectivity allowing for the Gauzy Smart window or switchable glass to connect to the same system as lighting.

iGlass Technology: System agnostic design is also a key differentiator and iGlass Technology, with its system agnostic design and universal compatibility, allows its smart window’s electronic control unit to interface with third-party ecosystems. The system can interface with light control solutions like Lutron, as well as building management cloud systems such as Google Cloud or even end-use applications such as Alexa.

Niagra Framework: Niagara Framework is a system-agnostic design that some technology vendors such as Kinestral have adopted. Since Niagara Framework is a software platform that can be used to manage and control diverse systems and devices-regardless of manufacturer or protocol, this allows the smart window’s features or options to be integrated with the existing BMS/BAS controllers running Niagara Framework.

The Mobius interface: EControl-Glas is a German EC smart window manufacturer which connects through the Modbus interface and allows easy integration into existing building control systems. ChromoGenics is another EC smart window technology manufacturer that has adopted the Modbus communication protocol. While it has its own ChromoGenics Control System (CCS), it can be overridden by or communicate with other building automation via Ethernet and Modbus TCP/IP.

Real time and predictive tint: Another important development is the extensive use of external sensors for real-time tint. Smart windows are now expected to change on a real-time basis in response to weather conditions and without human intervention and more importantly without delay. The output from external sensors, combined with past data and an advanced machine learning algorithm can be used to predict weather conditions and change window tint in real-time.

Another approach of predictive tinting is connecting with a network. For example, the Miru smart window system can connect to weather networks for automatic and predictive tint adjustments to match external conditions.

Smart Windows, OLED Displays and PV: A Next Phase for Smart Windows

While much of this report will concern itself with adding intelligence to the original smart windows value proposition and making it part of the smart building revolution, there are, however, other directions that smart windows are taking.  This reflects either a physical integration of smart windows with other functionalities or more of a smart materials play.

Physical integration: As far as the physical integration story goes, we mean replacing smart glass with a PV panel or some kind of flat – perhaps OLED – lighting.  This mostly a design play for that not does not require any technological advance and actually happening now and would seem mostly suitable for fashionable homes, restaurants, etc.

Another kind of integration that is at an early stage of the technology development is an integration of smart windows that one might claim occurs at the level of material science.  That is, the smart material represented by the smart window is melded with another kind of smart material to form a composite with additional capability.  This kind of integration is already carried out but is a niche application at best and perhaps just an experimental one.  However, two areas where there is some activity of this kind is with OLEDs and solar panels.  SageGlass is one firm to follow as it has the scale and intellectual capacity to make these happen.

In our opinion, a critical issue that has yet to be resolved with this kind of integration though is pricing.  It will be interesting to watch whether this development continues further as this will be a significant impact on the already high price of smart windows.

Smart windows plus OLEDs:  There are already examples of OLED displays integrated with smart windows. This helps the smart window, when opaque, to be a display panel providing information or other content streams.

An example here is Vision Systems. The company is testing dynamic glass on trains in Dubai, and has developed a multi-zone dimmable window, a dimmable divider with an integrated information display, and a glass partition that can play videos. The windows have a transparent touch panel so passengers can adjust the level of transparency. When opaque, the windows can display travel or promotional information.

Vision Systems has dimmable window technology for aircraft, buses and cars as well. The outside of the windows, when darkened, can display ads or other messages. Vision Systems has both SPD and PDLC smart window technologies. SageGlass is another company that is looking into transparent OLED integration into their glass. The company claims to have active partnership with a transparent OLEDs technology manufacturer.

Smart windows plus solar: Additionally, building integrated photovoltaics (BIPV) glass stand as a brake on growth with the choice of making the building more energy efficient or an energy generation source to limit grid use or perhaps participate in energy exchange.

Transparent solar, while still early in its development, could also eat into smart window’s share. In mid-2020, a team led by University of Michigan researchers set a new efficiency record for color-neutral, transparent solar cells, achieving 8.1% efficiency and 43.3% transparency with an organic design rather than with conventional silicon.  However, it will be a long time before these products are commercialized.

The Smart Windows Market is Mainly Driven by Government

With so much talk about design and new technology in the context of smart windows it is easy to forget that government edicts may be the biggest overall “market” driver.

Governments have always advocated for and even demanded energy efficiency.  This has only grown in an era in which green/sustainable energy are important topics.  One other factor where government can help promote smart windows is through subsidies of various kinds and may be especially important in terms of retrofits, where smart windows have not be widely found but where governments often focus their efforts.  While retrofit may look like a large market, the current low renovation rate of an average of 1% means the addressable market remains new buildings.

We also note that governments also supply direct funding for energy-related funding, some of which involve smart windows.  The sources of government support for smart windows deployment are largely ubiquitous.  However, both North America and Europe are major sources of government activity in this space.  This activity occurs at the super-national, national, federal and even local level.