Driving Window Innovation to Combat Climate Change
From urban construction trends to aesthetic appeal and the many benefits of natural light indoors, windows are dominating more wall space in buildings than ever. And this global construction phenomenon isn’t going away.
But there’s a glaring problem in this new equation: most windows today are massively inefficient, causing building energy consumption to skyrocket.
Energy losses from windows contribute to almost 1 gigaton of CO2 emissions a year globally—roughly the same as the total emissions from the aviation sector. This weak link of inefficient windows is augmenting our global energy usage crisis, with mounting climate implications.
To dramatically lower the energy and carbon footprint of buildings on a global scale, innovation in high-efficiency windows must be driven to new heights. But to date, windows have been a vastly under-hyped climate technology.
Let’s take a look at why windows are a technology primed for startup innovation and venture capital (VC) investment to drive forward market traction and, in turn, massively reduce global greenhouse gas emissions.
The Massive Economic Opportunity of High-Efficiency Windows
For startups and VC investors alike, window technology innovation holds breakthrough potential for climate action and economic growth.
The Market Opportunity
While windows have always been an integral piece of a building’s fabric, in recent years these seemingly ubiquitous components have taken on increasing significance in building design, particularly with the rising trend of larger window-to-wall ratios in construction. In modern commercial buildings, window-to-wall ratios are often as high as 75 percent.
Dialing in on market size, global architectural glass (used for making windows) is a market valued at over US$100 billion today. This is expected to grow significantly as the global building stock (the total count of buildings) is set to double by 2050, and commercial floor space in the United States is expected to grow 33 percent between 2020 and 2050. Additionally, more than half of the current global building stock is expected to remain standing in 2050.
Between new construction and retrofits of existing buildings, windows represent a substantial market in the United States and globally.
The Climate Impact Opportunity
From a climate impact perspective, windows are responsible for nearly 10 percent of a building’s energy use (Exhibit 1), most of which can be attributed to the heating and cooling energy lost through these weak links. In many ways, windows are the Achilles’ heel of current building efficiencies. This is due in part to poorly insulating single-pane windows, which are currently used in the majority of buildings worldwide.
In the United States, which has a significant market for low-emissivity double-pane windows, heat loss through windows costs approximately $40 billion annually and accounts for nearly 13 percent of the building sector’s emissions.
In Europe, if all windows were replaced with commercially available high-performance glazing by 2030, more than three exajoules of energy—equivalent to one-third of Germany’s total energy consumption—would be saved annually, along with 94 million tons of CO2 emissions.
Globally, energy-efficient building envelopes with high-performance windows can reduce direct CO2 emissions in buildings by 525 million tons in 2050—even more if we consider emissions due to electricity savings. This amount is more than half of Japan’s CO2 emissions today.
Startups Pioneering Window Technology Innovations
From dynamic glazing to next-generation vacuum insulation, startups and innovators are advancing window technology on multiple promising fronts. Here are a few key areas that we are most interested in right now.
- Dynamic glazing technologies
Dynamic glazing technologies that actively modulate solar control properties can be particularly effective in large commercial buildings with high window-to-wall ratios. These technologies can reduce cooling energy use by over 20 percent compared to typical low-emissivity windows (depending on building orientation, local climate, and other factors). Electrochromic, thermochromic, and photochromic technologies fall in this category. However, of these three, electrochromic windows are the furthest along in commercial deployment. Ensuring transparency, faster switching speeds, minimal complexity of installation, and lower costs will be key to wider adoption of electrochromic window technology.
One example of this is startup Furcifer Inc., which is developing cost-effective electrochromic films to make traditional architectural and automotive glass into smart glass. In this vein, SoftBank invested $1.1 billion in tintable window startup View. SAGE Electrochromics was acquired by industrial giant Saint-Gobain in 2012. Kinestral Technologies, developers of Halio electrochromic glass, closed $100 million in funding for their Series D funding round. And last year, Miru Smart Technologies (formerly Click Materials) signed a major deal with Cardinal Glass.
- Aerogel glazing technologies
Aerogel materials provide high levels of insulation and high transparency, making them suitable for window applications. These materials have the potential to reduce building heating and cooling energy use by up to 25 percent (depending on the thickness of the aerogel material, local climate, and so on).
Thin aerogel films are being developed to address the retrofit market for large buildings, to dramatically improve an existing window’s insulation performance and reduce the emissions footprint. Players in this area are developing new manufacturing processes and raw materials that can significantly reduce the manufacturing cost of aerogels while ensuring superior transparency, negligible haze, and high insulation performance. Startups working on aerogel-based windows and films include Aeroshield, iFeather, and Spectral Materials.
- Next-generation vacuum insulation
In another category of window technology, vacuum insulation is also seeing rapid innovation, with startups making progress toward new cost-effective, high-performance vacuum-insulated glass that is durable and less complex to manufacture.
- Low-e coatings
Tried-and-true low-emissivity (low-e) coatings, which limit heat gain or loss through windows, continue to be an important technology for window innovation. Startups are now developing alternative approaches to producing low-e coatings that improve infrared heat reflection, while also coming in at lower cost than traditional low-e coatings on the market today. For example, 3E Nano Inc. (a member of our inaugural Third Derivative cohort) is working with partners to develop a coating that can be applied to glass and polymer substrates to reflect the sun's heat during summer or keep indoor heat from escaping during winter.
VC Investability Considerations to Accelerate Window Innovation and Adoption
An estimated US$3.7 trillion of investment is needed in energy-efficient building envelopes from now through 2050 to stay under 2°C of warming—and VCs will play a pivotal role in this.
As more VCs enter the windows arena, it’s important to keep a few key criteria in mind while evaluating startups and their technologies:
- Adoption of high-performance windows is primarily driven by building codes instead of energy savings, and long payback periods often result in an uptake of products that meet the minimum code requirements. When looking at advanced window technologies, investors can consider a typical payback period of three to five years as market-acceptable. However, in some cases, higher payback periods may be acceptable if the technology results in additional benefits (such as avoided costs of shading systems, reduced glare, or enhanced occupant comfort and productivity).
- Window manufacturing is relatively consolidated and capital intensive, and it involves complex supply and sales channels. Accordingly, it’s challenging for new entrants to become window manufacturers at scale. Rather, investors should look for technologies that can be easily incorporated into existing manufacturers’ products or processes, such as high-performance coatings or films.
- In the retrofit market, the ability of building owners and homeowners to apply films or attachments directly without external installation labor can reduce cost burdens and dramatically increase adoption of these technologies.
- For products that are sold to window manufacturers that manage final assembly before sale, it’s important that applying any films or coatings remains operationally simple for the manufacturers. That way, no significant investment is required in window or manufacturing redesign, and the coatings can accommodate a variety of window types and sizes. This will ensure faster adoption among window manufacturers and allow startups to reach economies of scale much more rapidly, ultimately reducing costs and increasing customer adoption. Following this approach allows the startup to gain access to a window manufacturer’s brand, customers, distribution channels, warranties, and more.
Windows as a Climate Technology
Windows are ubiquitous, yet they remain the weak link for building efficiency, contributing nearly a gigaton of global CO2 emissions annually.
With such transformative emissions-reduction potential, windows ought to be considered as a breakthrough “climate technology,” but all too often they have been overlooked.
In this light, windows are a critical technology that need immediate startup innovation and massive capital investment to avoid the worst impacts of global warming.
While many stakeholders are critical to advance the window technology market, collaboration and fast action from startups and investors could be the deciding factor to push windows into this new frontier and slash the carbon footprint of buildings.