0-90% Market Share:
The Energy Efficient Glass (Low-E) Case Study

Building energy efficiency investments are a well-established pathway for the United States and other countries to conserve resources and combat climate change. These investments also provide building occupants with value through utility bill savings and increased comfort. However, energy efficiency investment success stories have largely been lost in the limelight of the rooftop solar photovoltaic (PV).

On such example of a non-PV energy efficient investment success story is low emissivity (low-e) windows. This product’s market development is a case study in public private partnerships and venture capital success related to the advent and eventual mass adoption of breakthrough clean technologies.

Glass Dyenamics, with its next generation of energy efficient glass, is excited to be in position to repeat low-e’s growth from zero percent market share to mass adoption.

The following is an excerpt from the American Energy Innovation Counsel ‘Low Emissivity Windows’, Jeffrey Rissman and Hallie Kennan, March 2013

Buildings account for 41% of total U.S. energy use, more than any other sector.¹ This energy comes at a steep price. The 40 quads of energy consumed by buildings each year cost $418 billion, and three fourths of that energy comes from natural gas, coal, and petroleum.² As a result, buildings’ energy consumption accounts for 39% of all carbon dioxide emissions in the U.S.,³ as well as other air pollutants that have been linked to cardiovascular disease, respiratory disease, and premature death.^{4, 5, 6} Typical commercial buildings waste 30% of the energy they consume, mostly by heat and cooling loss through the building envelope (windows, doors, roof, etc.).⁷ Losses through windows alone are estimated to cost U.S. consumers roughly $40 billion each year.⁸

Efficiency upgrades that prevent this loss are among the most promising and cost-effective energy technology options now available. A National Academy of Sciences study, which analyzed the costs and benefits of a host of DOE-supported renewable energy and energy efficiency innovations, singled out building energy efficiency (and one fossil energy program) for praise. The study concluded that, “by an order of magnitude, the largest apparent benefits [of the technologies examined] were realized as avoided energy costs in the buildings sector in energy efficiency.”⁹

The OPEC oil embargo of 1973 was the initial impetus for the United States government to develop energy efficiency technologies. The price of oil rose from $4.75 per barrel to $37.42/barrel over the course of the 1970s.²⁰ At the same time, the price of coal nearly quadrupled, from $6.34 per short ton ($38 per short ton in current dollars) in 1970 to $23.75 per short ton ($75 per short ton in current dollars) in 1979.²¹

These price increases had a significant impact on the building sector because of buildings’ reliance on heating oil for furnaces and boilers and on coal for electricity. The resulting economic distress and concern over foreign nations’ ability to harm the U.S. by withholding energy supplies motivated the government to initiate R&D programs to increase energy efficiency in the building sector.

The federal government provided basic research and seed investments to catalyze low-e technology development in the absence of private sector efforts. The concept of low-emissivity coatings originated in the World War II era, but in the ensuing decades, no private firm had undertaken the research necessary to turn the concept into a commercial window product.²²

Even in the 1970s, when the need for efficiency technologies became acute, industry was “too concerned with rising fuel costs and with responding to building codes limiting window areas to put much effort into a speculative new technology,” according to a report by Oak Ridge National Lab.²³

In 1976, the Energy Research and Development Administration (ERDA; now the Department of Energy) launched a window research program at Lawrence Berkeley National Lab (LBNL). The goal of the program was to understand the scientific mechanisms of heat transfer in windows and to identify technical opportunities for reducing those losses, ultimately paving the way for private firms to commercialize the technology and bring products to the marketplace.²⁴

From 1976 to 1983, LBNL received $2 million ($5.5 million in current dollars) in funding from DOE “to support industry’s low-e R&D efforts with thin film testing, field testing of low-E prototypes, annual energy simulations of low-e, and initial development of the WINDOW computer tool”²⁵ (discussed below). The lab awarded subcontracts to several private firms to develop prototype low-e coatings and thin film deposition processes. LBNL used its own staff and equipment for performance testing of low-e coatings and window prototypes.²⁶

Around this time, a group of graduate students at the Massachusetts Institute of Technology were seeking a research project and decided to pursue the development of low-emissivity glass technologies.²⁷ The students formed the company Suntek Research Associates (later renamed Southwall Technologies), but they were unable to obtain private-sector investment because of the company’s small size and the perception that low-e technology was unproven and risky.²⁸

They approached DOE and were granted $700,000 ($1.95 million in current dollars) in initial R&D funding²⁹ on the condition that they work with a national lab. The company chose to partner with LBNL and relocated from Massachusetts to California.³⁰

With the lab’s help, Southwall developed Heat Mirror transparent film, the first low-e window technology to become a commercial product.³¹ Released in 1981, the film was designed to be placed within the cavity of a multipane window.³² (At that time, technology to deposit a low-e coating directly onto glass had not been fully developed.) That year, the first major project using Southwall’s Heat Mirror technology, the City Hall for Spokane, Washington, demonstrated the feasibility and potential of low-e window technology.³³ This helped the company raise more than $10 million ($23.8 million in current dollars) in venture capital,³⁴ buy machinery, and begin manufacturing on a larger scale.³⁵

Driven in part by the success of this startup, major window and glass manufacturers became more interested in low-e technology and accelerated their investment in low-e research, coating manufacturing, and window products.³⁶ The first two such companies, Andersen Windows and Cardinal Glass, stated that “DOE-funded efforts in the late 1970s and early 1980s were important factors in the critical decisions that led them to make [the] major capital investments” necessary to begin producing low-e glass and windows.³⁷ By the mid-1980s, industry investment in low-e manufacturing facilities had grown to $150 million ($320 million in current dollars), and “virtually every major window and glass company offered a low-e product.”³⁸ Low-e windows rapidly increased in popularity, accounting for 20% of residential window sales by 1988.

Today low-e IGU’s account for over 90% of residential sales. The historical development of low-e windows shows the potential for innovative technologies to scale to mass adoption.