On June 24, Aspen Aerogels filed for an initial public offering (IPO) with the U.S. Securities and Exchange Commission, announcing plans to raise up to $115 million to expand its operations and manufacturing capacity. Aspen makes aerogel insulation, a highly-porous nanostructured material targeted at building insulation, industrial applications, transportation, and even clothing. The announcement has seemingly been in the works for years. In 2005, CEO Don Young projected his firm was on the cusp of profitability and a potential IPO, and we speculated in 2006 about an imminent exit for the company. However, the company has been held back by limited demand for its product, stemming both from its high cost as well as the building construction downturn in 2009.
Aspen originally targeted the building insulation market, but has found better traction in oil and gas applications, namely for undersea pipeline insulation. These “pipe-in-pipe” lines are high-value, space-constrained applications that are well suited to aerogels. Companies will pay a premium for a thermally-robust, highly-insulating material that is packed between the inner and outer pipe. This translates into a reduced diameter of the outer pipe, saving material costs of steel. Aspen’s customers in the subsea pipeline market include ExxonMobil, BP, and Total. Aspen’s shift of focus is analogous to many water desalination companies now targeting fracking applications for gas and enhanced oil recovery. Water and electricity remain subsidized commodities in many regions of the world, and emerging cleantech players may have to look at higher value markets , such as oil and gas, for their technologies.
Aerogels are one of several emerging technologies vying for a piece of the multi-billion dollar general insulation market in buildings. Although aerogels have suffered in the past from handling difficulties on a construction site, by far their main issue is cost. At up to $10/ft2, Aspen Aerogel’s Spaceloft aerogel blanket is simply not competitive with standard insulation like fiberglass, which costs about $0.50/ft2, except for niche, space-constrained applications. Cabot Corporation, one of Aspen’s rivals, is proposing a solution to both problems. Cabot encapsulates its granular Lumira aerogel material into translucent “daylighting” panels that enable natural light to be transmitted while being more insulating than standard double-glazed windows. With this product, Cabot is hoping to find a profitable niche as an eco-friendly daylighting solution in the green building sector. We review the prospects for advanced insulation products – namely aerogels, phase-change materials, and vacuum insulation panels – and size the market forward to 2020 in our latest LRGI state of the market report, Opening the Thermal Envelope: Emerging Innovation in Dynamic Windows and Advanced Insulation, projecting a $230 million market for aerogel building insulation by 2020.