Saint-Gobain bets on energy-saving glass
* Electrochromic glass cuts down on energy bills
* U.S., Europe, China and Middle East to drive demand
By Elena Berton
PARIS, June 26 (Reuters) - A self-tinting window pane that blocks out sunlight at the flick of a switch was the stuff of science fiction in 1982 when it appeared in cult film Blade Runner.
Now, electrochromic glass is a reality and one of Saint-Gobain's latest bets on intelligent glass technology as the French building materials group seeks new products with fatter margins.
"Sales for electrochromic glass are very small today," said François Xavier Moser, managing director of Saint-Gobain's GlassSolutions unit. "But we want to grow them and achieve a reasonable market share."
The French group makes glass for the building sector and the automotive industry but is suffering from a slump in European demand as the euro zone crisis deepens and is seeking to broaden its revenue potential.
A square metre of self-tinting glass costs 500-600 euros ($630-$750), compared with 80-100 euros for conventional flat glass, because of the cost of sandwiching a microscopically thin coating between traditional glass panes that reacts to low-voltage electrical charges.
Although the market for electrochromic glass is worth less than $10 million today, demand for energy-efficient materials is expected to lift it to $140 million in the next eight years despite the product's hefty price tag, according to business intelligence firm Lux Research.
The wider "active glass" market, including glass that becomes opaque or heats up at the touch of a switch, is expected to reach nearly $4.2 billion in 2016 from $1.6 billion in 2011, according to a study by intelligence firm BCC Research.
Due to its high cost, electronically tintable glass has been reserved for high-end cars - like the limited-edition Ferrari 575 M Superamerica - and architects working for affluent clients with a penchant for futuristic interiors.
But because it can save energy by harnessing the sun's warming rays in winter and reflecting them on hot summer days, this technology holds promise for a much wider and profitable market - commercial buildings.
Self-tinting glass can help cut down on air conditioning and heating bills, also eliminating the need for extra elements such as window shades or blinds.
As Europe's top flat-glass maker, Saint-Gobain wants to use its weight to bring down the cost of making electrochromic glass and widen its appeal to the commercial building sector, where new regulations favour energy-efficient buildings.
"The U.S., Europe, but also China and the (Middle East) region, where there are many construction and infrastructure projects, are important markets for us," said Xavier Moser.
Earlier in June, the French building materials group said it had suffered from a weaker performance by its flat glass business but expects to post weaker first-half results in July and is on track to meet its 2012 targets.
Plans to float its glass-packaging unit Verallia, which makes Nutella jars and Dom Perignon bottles, announced in 2010 to tighten Saint-Gobain's focus on higher-margin building materials, were put on hold amid financial market volatility sparked by the unfolding euro zone debt crisis.
The considerable energy savings for this specialized product can largely offset the higher manufacturing costs of the glazing, which changes from being clear to having a blue-grey tint with the flick of a switch or through sensors.
The Lawrence Berkeley National Laboratory, part of the U.S. Department of Energy, has estimated that electrochromic technology can reduce a commercial building's peak energy demand by 20-30 percent.
"There are several factors that will contribute to the growth of the electrochromic glass market, but the most important will be the new regulation in Europe, where all new buildings will have to be net-zero in energy consumption by 2020," said Aditya Ranade, a sustainable building materials analyst at Lux Research.
A net-zero building consumes zero net energy and has zero carbon emissions annually.
"The high cost of electricity in Europe makes it economically attractive to save energy," said Ranade.
The first studies into active glass date back to 1704, a few decades after Saint-Gobain was founded to make mirrors for the royal palace of Versailles, near Paris, in 1665.
But interest only took off in the 1970s, when research resulted in a large number of patent applications.
Still, only a handful of niche players in electrochromic technology emerged in the following decades, with production remaining limited to one-off projects, such as a community college in California.
Although Saint-Gobain had been working on developing its own electrochromic glass, in 2010 it made an $80 million investment to buy a 50 percent stake in Sage Electrochromics Inc, a tiny Minnesota start-up at the forefront of the technology.
In May 2012, Saint-Gobain took control of Sage to expand the products into international markets and complete the construction of a new plant in Minnesota next year that will boost the output volume of glass 35 times over.
"There are other players who have small production lines, but Saint-Gobain is the first company to industrialise this product," said Lionel Bisch, commercial and marketing director of Quantum Glass, Saint-Gobain's smart-glass business.
"We want to remove the idea that electrochromic glass is a luxury product." ($1=0.7977 euros) (Editing by Mike Nesbit)
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