A Faribault company -- with government backing -- is betting tintable glass will "wow" the construction industry.
Hannah Szajner studied in the library at Century College in White Bear Lake, where the windows behind her are made of smart glass manufactured by Faribault-based SAGE Electrochromics. The windows change tint with the flip of a switch.
When librarians arrive at the Century College science library, one of the first decisions of the day is whether to hit an electrical switch. Not for the lights -- for the windows.
The library in White Bear Lake is partly sheathed in "smart glass" with electronically controlled tinting to reduce harmful sun rays and cut energy use.
"If it is a super-bright day, we dim them," said librarian Jane Young. A few minutes after pressing a button, the windows change from clear to tinted blue. "It's really cool."
The glass is manufactured by SAGE Electrochromics Inc., a 100-employee company in Faribault, Minn., that sees bright days ahead for the green technology.
Though the market for smart glass remains small, SAGE is investing $135 million to expand its five-year-old Faribault plant. It intends to mass-produce its trademark SageGlass, cut the cost in half and boost sales across the world thanks to a new partnership with an international construction-materials company.
The company has attracted millions in capital from private investors. And it is also enjoys one of Minnesota's most lucrative business-subsidy packages.
Government agencies are offering at least $118 million in incentives to boost employment and energy conservation. The technology is seen as a boon to the nation's power grid because it could dramatically reduce air-conditioning needs when electrical demand is highest.
"SageGlass allows us to control the amount of the sun's energy that comes through the glass electronically," said SAGE founder and CEO John Van Dine. "On a bright sunny day we can stop the heat from coming into the building."
Getting beyond 'cool'
The changeable-glass technology relies on coatings that switch to a tinted state under low voltage. The tinting is variable, though it never completely blocks sunlight, so there is always a view outside.
Only a few companies in the world make electrochromic glass. SAGE began commercial sales in 2003, and has improved the technology with variable tinting and automated controls.
The company recently signed a deal with Saint-Gobain, a glass-and-building-products company based in France, to combine the two companies' electrochromic patents, research, manufacturing and marketing. Saint-Gobain paid $80 million for a 50 percent stake in SAGE, which remains an independent, privately held company.
With the fresh capital and additional government assistance, SAGE is expanding the Faribault manufacturing plant, and plans to hire at least 145 workers after its completion in 2012.
Van Dine said he's never shown SageGlass to anyone who didn't say something like, "I would really like to have this in my home or in my office." The problem has been cost, which initially was about double that of standard window glass.
"I think being a cool technology only goes so far," said William Baumgartner, who analyzes the construction industry for Freedonia Group of Cleveland. "In the end, for most consumers, most builders and architects, the economics of it have to be right. They are not going to adopt something just because it is cool."
A study by Lawrence Berkeley National Laboratory concluded that electrochromic technology can reduce a commercial building's peak energy demand by 20 to 30 percent.
The market is growing for smart glass, which includes several technologies besides electrochromic windows, Baumgartner said. Even so, only $150 million in smart glass was sold last year, less than 1 percent of the $1.7 billion U.S. market for window glass, Baumgartner said. Electrochromic windows' share was an estimated $30 million, he added. SAGE was the major player, but it doesn't publicly disclose financial results.
Van Dine said the price of tintable windows compares favorably to the combined cost of standard windows and high-end blinds. As the company cuts glass-production costs, Van Dine expects SageGlass to be competitive against windows and low-cost blinds.
By controlling the sun light with tinting, rather than blinds, "we can always maintain the view and connection to the outdoors," he added. At SAGE's headquarters, a conference room is designed with tintable windows that allow daytime meetings to be held in natural light without the glare.
Public stake in success
The Faribault plant represents a big bet, not just for SAGE and its private investors, but for the government.
State and local governments have offered nearly $16 million in loans, grants and tax breaks -- about $107,000 for each of the 145 new jobs the company is required to create.
The company is in line for a $72 million federal loan guaranteed by the U.S. Energy Department, and is negotiating to increase the loan to more than $100 million, said Mike Kennedy, SAGE's chief financial officer. The company also is eligible for $31 million in Advanced Energy Manufacturing Tax Credits, another federal program. Additional loans worth $1.2 million are being offered to SAGE by Minnesota electric cooperatives.
SAGE doesn't now make a profit, but Van Dine expects it to join the list of successful Minnesota window and glass companies like Marvin Windows and Andersen Windows. SAGE makes and sells glass panes and controls, but does not manufacture frames like the two big Minnesota window companies.
With its onetime competitor Saint-Gobain now its partner, SAGE faces limited competition in the electrochromic market. One emerging challenger is Soladigm, of Milpitas, Calif. It has no products on the market, but plans to open an electrochromic window glass manufacturing plant in Mississippi, with $44 million in incentives from the state.
Soladigm, which like SAGE was started with venture capital, was among the winners of GE's recent "Ecomagination Challenge," a competition to identify technologies to benefit the nation's power grid. The award means up to $5 million in new capital for Soladigm, GE said.
Tintable glass will need to prove itself against accepted energy-saving technologies, like low-emissivity glass. Erich Klawuhn, vice president for business development at Soladigm, said glass that changes tint should be easier to sell than earlier innovations because people immediately see what the new technology can do.
"We are on a very fast pace for commercialization," said Klawuhn, who predicted electrochromic glass will gain market share more rapidly than low-E glass did in the 1980s and 1990s. "We have a lot of support from the marketplace to deliver, and we are really excited about it."
David Shaffer • 612-673-7090