Author Archives: Aditya Ranade

Hardwood Trade Restrictions by U.N. Group Likely to Spur Demand for Modifed Wood

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On March 14, the United Nations Convention for International Trade on Endangered Species (CITES) announced new restrictions on trade of various plant and animal species, including 100 species of tropical hardwood. International trade in a range of rosewoods and ebonies from Asia, Central America, and Madagascar will now be regulated by CITES. The joint program between CITES and the International Tropical Timber Organization (ITTO) will support the efforts of the countries concerned, to strengthen their capacities to implement the Convention. The CITES agreement was signed by 170 countries, including most major timber exporters, e.g. Brazil, Thailand, Costa Rica, and Madagascar.

In the last two decades, the use of tropical hardwood in the developed world, especially in European Union countries, has come under scrutiny. Most countries in the European Union require tropical hardwood imports to be Forestry Stewardship Council (FSC)-certified. The changes required to get FSC certification likely raise the production costs, and as a result the use of tropical hardwood has fallen significantly from 1998 to 2007 in Europe. The recent announcement from CITES is now applying screws from the supply side. To date, CITES has applied restrictions on trade of endangered animal species such as sharks and polar bears. To our knowledge, this is the first instance where it has included any wood species under its rules. If implemented effectively, the new restrictions will boost the demand for modified wood products that have shown promise of hardwood performance, such as the furfuryl-alcohol-impregnated softwoods from Kebony and flavonoidimpregnated softwood materials being developed at the Max Planck Institute (client registration required). Clients interested in modified wood materials should focus on the European market and applications that require durability, such as boardwalks and decking.

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Acuity and SunOptics release integrated daylighting-LED lighting system

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On December 4, Acuity Brands released its LightFlex system for suspended ceiling applications. The system consists of prismatic daylighting skylight from SunOptics, connected to a light tube coated with a reflective film. A proprietary optical sphere design and a set of lenses on either end of the light tube, diffuses the light and reduces the glare while maintaining the intensity. The skylights are made from double- or triple-glazed acrylic or polycarbonate sheets. The LightFlex system is designed to be integrated with Acuity’s lighting control and back-up LED lighting systems.

Acuity Brands is one of the largest providers of lighting hardware and solutions in North America with 2012 sales of $1.2 billion. Its foray into daylighting with SunOptics will be a big vote of confidence for SunOptics. However, adoption will be governed by the payback period, dependent on average sunshine hours in a given location, electricity pricing, and the lighting efficiency of the LightFlex system. If the system can provide 500 lumens/m2 or more for 2,000 hours per year, the payback can be between two years to five years in North America. The payback can be further shortened if the daylighting system is integrated with daylighting sensors, lighting controls, and back-up LED lights.

A number of companies like Sundolier, Daylighting Systems, Skyshade, and Ciralight Global are developing high-performing skylight designs. Lighting control companies will evaluate their designs and possibly introduce similar products. Clients developing acrylic or polycarbonate lenses, sheets or reflective films should look to market their materials to SunOptics and other skylight developers striking such partnerships.

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Late-Stage Investments Show Maturity of Green Buildings

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After a cautious start, investments in green buildings technologies began to blossom post-2005. From 2000 through 2005, only 37 investments rounds were closed in the space, but from 2006 to present, the number of deals has soared by over 700%, with at least 140 startups netting a combined 295 venture investments – all told, since  2000, venture capitalists have invested $4.06 billion in technologies that improve the energy efficiency of buildings and homes.

Signals of the green building industry’s growth and maturation are evident in this week’s graphic, which appears in the recent Lux Research report (client registration required) in the Sustainable Building Materials and Efficient Building Systems Intelligence services. While there were only 4 late stage investments (Series D and above) from 2000 to 2005, since 2006 these late-stage investments have increased, showing the maturity of the field. In 2011 there were 15 late-stage investments totaling $445 million, nearly 50% of the total invested that year.

With an increasing number of late-stage investments and higher dollars per investment, the maturity of the industry is emerging. Increased investor confidence since the 2009 financial crisis has also led to a higher investment size increasing from an average of $10.51 million in 2010 to $14.90 million in 2011. Now, early investors are poised to look for exits from the first wave of successful green buildings start-ups.

Source: Lux Research report “Building a Green 21st Century: Tracking Venture Investments in Green Buildings to Uncover New Opportunities”

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Rolf Disch Trying to Find a Home for Net-Zero-Energy Design in Germany’s Residential Building Sector

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Recently, we spoke with Dr. Tobias Bube from Rolf Disch Architecture regarding the potential for net-zero-energy design in residential construction. Rolf Disch has been involved in net zero or “plus energy” architecture since 1994. The firm’s first building, Heliotrope in Freiburg, Germany is widely considered by a number of architects to be the first building in the world that produces more energy than it consumes.

Dr. Bube told us that the additional cost for constructing a net-zero-energy home is only 7% to 10% more than that for construction meeting the minimum energy efficiency standards required by codes in Germany, such as EnEV 2009. Dr. Bube added that net-zero-energy construction can reduce heating and cooling costs by 90% for a 100 m2 home, bringing the payback period for energy conservation technologies under 10 years.

Rolf Disch utilizes technologies such as daylighting, passive solar heating, insulation better than R 10/inch, and zoning in windows. It also uses solar photovoltaic (PV) energy for on-site generation and payback for the PV technologies is in excess of 20 years with the recent reduction in German feed-in tariffs (FiT) for solar. Over the years, Rolf Disch has faced difficulties convincing home builders and housing development companies to adopt net zero or plus energy design. Therefore, in 2003, the company decided to float its own housing development arm adopting plus-energy construction methods. It now serves as the main customer for the design firm. According to Dr. Bube, a significant slice of the German upper-middle class is prepared to pay a premium for plus-energy homes.

According to our estimate, over 300 net-zero-energy buildings (NZEB) have been constructed over the past 10 years, most of them being in the commercial and institutional sector. Low tolerance for high capital expenditures and long paybacks have both held back the adoption of NZEBs in the residential sector. But a combination of high electricity prices, strict building energy conservation codes have made Germany the first geography where NZEBs can potentially take root even in the residential segment. Investors interested in the NZEB space should follow the activities of major home builders and housing development companies in Germany.

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Which New Sustainable Architectural Coatings Technologies Are Likely to Stick?

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Sustainable architectural coatings technologies offer a lower impact on energy, natural resources, and/or the environment. Yet they often get confused with “greenwashed” unsustainable alternatives. This week’s graphic comes from Lux Research’s latest Sustainable Building Materials report (Client registration required) that, among other things, provides a modified Lux Innovation Grid to assess which emerging coating technologies are best positioned to combine sustainability and end-user value into a winning market reception. We survey some of the candidate technologies here.

First-generation low-VOC technologies – like waterborne acrylics and polyurethanes - have gone mainstream. But challenges remaining around gloss retention, durability, and processability have driven development of new technologies, such as waterborne alkyd coatings from Reichhold Coatings and waterborne epoxies from Cytec Industries. More established low-VOC technologies, such as 100% solid content powder coatings, have also received a shot in the arm with the development of polyurea coatings, whose tunable rheological properties make them more processable.

Cool roofs could become a future winner, thanks to thermally responsive optical coatings. Elastomeric cool-roof coatings are commercially available and produced at scale, landing them a spot among current winners even though their application remains limited to hot climates. However, their thermally responsive cousins, such as those from Creative Material Technologies and Thermeleon, turn from “white” to “black,” potentially expanding the geographic footprint of cool roofs.

Several new technologies enabling solar cell coatings to effectively be sprayed on buildings offer attractive processability and yield. But the 2% conversion efficiency of these solar paints is very low relative to conventional solar panels (13% to 15%), suggesting such coatings will remain a curiosity.

Coatings that enhance durability such, as those based on Bayhydrol polyols and isccynates from Bayer, provide a tangible benefit to the end user while the increased product life translates into reduced resource consumption. Self-healing coatings offer similar promise. But only a handful of start-ups, including Autonomic Materials, are pursuing the technology.

“Reduce, reuse, and recycle” technologies help minimize a coating’s environmental impact and its overall cost to end users, earning such technologies a spot in the Win-Win Quadrant. Examples include coatings with enhanced hiding power such as EVOQUE and ROPAQUE from Dow Chemical and Celcor from Arkema. Both reduce material consumption by as much as 20%.

Source: Lux Research report “Painting a Green Future: Opportunities in Sustainable Architectural Coatings.”

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Modified wood producer Kebony wins three major projects

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Kebony, a producer of modified wood from Norway, announced three major projects in the last quarter of 2011: Onda restaurant in Norway, Yarmouth Harbor in the U.K., and Sheepshead’s Bay footbridge in New York City.

Kebony, which made The Guardian’s latest CleanTech 100 list, uses fast-growing softwoods such as pine, and makes it more durable by treating it with liquid biowaste using a patent-protected process. It impregnates the softwood with furfuryl alcohol produced from agricultural waste, and then heats it to polymerize the alcohol and form furan polymers in the wood cell walls, thereby increasing dimensional stability. According to Kebony, the result compares to tropical hardwoods, such as teak and balsa in hardness, durability, and dimensional stability. Additionally the furfuryl alcohol polymerization treatment removes any need to paint or coat the Kebony wood with volatile organic chemicals.

Wood continues to be a popular construction material in Europe and North America, even though supplies of tropical hardwood are increasingly threatened by rapid development, logging and climate change in Latin America and Southeastern Asia. Supply constraints have resulted in huge price increases. For example, the price of ripe hardwood from Latin America has gone up 120% from $0.76/linear foot to $1.76/linear foot in the last seven years. Also, according to the World Resources Institute, logging for tropical hardwood and pulp accounts for 0.2% deforestation per year and 20% of anthropogenic greenhouse gas emissions. All these factors have prompted consumers such as the New York City government to reduce the usage of tropical hardwood. But it’s been difficult to find an alternative material that shares its high strength and durability – thus, the interest in Kebony’s potentially more sustainable solution. But the company will face increasing competition from competing approaches – such as plastic-wood composites and non-tropical hardwoods – as it tries to capture the attention of sustainability-conscious buyers.

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New building norms can drive BIPV mainstream, with 6.6 GW market in 2021

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Building-integrated photovoltaics (BIPV) have remained a niche technology due to high costs and stringent specification requirements. Nor has their adoption been helped by the slow emergence past the developmental stage of thin-film solar modules – the best suited PV candidate for replacing traditional building materials.

As this week’s graphic shows, however, BIPV may yet enter the mainstream. Recent analysis by Lux Research projects a scenario in which BIPV sees a 1.2 GW global market by 2016, equivalent to $6 billion per current estimates, with a 69% share for Europe.

Currently, the European Commission’s Net‐Zero Energy Buildings (NZEBs) standards continue to fuel widespread adoption across the continent, and are on track to give Europe a lion’s share of BIPV installations in 2016 – assuming, of course, that the Euro Zone sees continued macroeconomic stability.

Primarily driven by greater adoption of LEED buildings, BIPV installations in the U.S. will grow at a steady clip, albeit slower than the EU. Meanwhile, growth in Asia will be limited to showcase projects driven by government and corporate sustainability goals.

Given that the EU directives on NZEBs all have 2020 targets, it is further likely that BIPV’s inflection point will occur in the 2017-18 timeframe as 2020 NZEB targets loom over EU member countries. In this scenario, the divergence between Europe and the rest of the world grows even larger, with Europe accounting for over 85% of global BIPV installations at 6.6 GW.

Source: Lux Research report “Building Integrated Photovoltaics: Moving Beyond Showcase Projects.”

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