* Electrochromic glass cuts down on energy bills
* U.S., Europe, China and Middle East to drive demand
By Elena Berton
PARIS, June 26 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
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
(Editing by Mike Nesbit)