Impact Players of Football, Technology, Glazing

There was a lot of great football over the holidays. Fans of Alabama and Clemson got their holiday wishes, while Spartan and Sooner fans got coal in their stockings. My friends in the South who razz us Ohio State University fans about the supremacy of the SEC earned bragging rights this year with the all-SEC playoff. Like in football, there were some major impact players who brought game-changing product and technology announcements in 2015. Here is my short list, and ideas about how they may affect our industry.

My top picks

The cost of energy

These moves are both marketing savvy and contain deeper lessons. Let’s look at the cost of renewable power first. According to a report by the Lawrence Berkeley National Laboratory (LBNL), the price of solar energy has plummeted 70 percent since 2009. According to LBNL, solar energy is now competitive with average wholesale electricity prices in many markets across the U.S.

The cost curve for solar and other sources of renewable energy is forecast to continue to decline. Regardless of the extremely low prices for fossil fuels, and their global glut of supply, investments in solar and wind power by power generation companies are soaring. This trend line should continue upward with Congress approving an extension of tax credits for renewables as part of the December 2015 budget deal.

It’s common knowledge that renewables fall under a matrix of subsidies that distort the final market price of their energy. But they’re not alone. According to the International Monetary Fund (IMF), fossil fuel companies will receive annual subsidies of $5.3 trillion in 2015. If implicit subsidies were included (for example, that governments will assume the burden of cleanups), this figure would be much larger.

According to the IMF, this high cost results from governments (not the fossil fuel companies) paying the costs that result from the burning of fossil fuels, including health related consequences. Though baseline cost comparisons for different forms of energy are challenging, the four major IT companies named above placed a major bet that the price of renewable energy will be very competitive in the future.

Powerwall

Tesla’s new Powerwall sounds so much like Powerball it has to be a winner, with much better odds. Much has been written about Powerwall, so I’ll be brief about what the game changer is. It could help level the demand for peak power generation, the most costly of all electricity. As you can see from the table inserted below, “The availability of significant storage capacity could help to decouple electricity supply needs from variable electricity demand.”

Source: U.S. Energy Information Administration, based on PJM data Note: Demand for the East Kentucky Power Cooperative, which joined PJM on June 1, 2013, is not included in the regional demand estimate above to ensure a consistent footprint throughout the selected time horizon.

Source: U.S. Energy Information Administration, based on PJM data
Note: Demand for the East Kentucky Power Cooperative, which joined PJM on June 1, 2013, is not included in the regional demand estimate above to ensure a consistent footprint throughout the selected time horizon.

[Image: Variability in electricity demand highlights potential roles for electricity storage]

While there are other factors that come into play, all of these seem to increase the future economic viability of power storage units that could be adopted by business and homeowners alike. This evolution will be accelerated by Tesla making the technology open source, which should trigger accelerated future innovation and growth of the category.

What does it all mean for glass and glazing?

With rapid increased investment in solar, the related investment in research and development of building integrated photovoltaics (BIPV) will increase and its price will continue to decline. Lots of companies, like Onyx Solar, are working on how to integrate PV into glass. The cost is high now, as the burden of research and development costs are spread over a narrow range of market adoption. This will change in a more affordable direction over time and something good will develop as a result.

The path to net zero products will accelerate, with increased adoption of integrated building envelope and energy management systems. Approximately 75 percent of the challenge of net zero energy building lies in reduction of demand-side loads (insulation, air barrier systems, high-performance building envelopes, efficient equipment and systems), while approximately 25% of the solution lies in on-site renewable energy. Different states are developing resources and tax incentives to spur adoption of net zero energy buildings, a trend that will continue to accelerate. Cost-effective, high-output BIPV will spur acceleration of net zero, and net zero-ready, buildings.

Innovators and integrators

It’s overly simplistic to say that the future won’t be the same as the past. But we can see how innovators are changing markets, in many spheres of commerce, and how integrators understand their core strengths to create collaborative relationships and platforms to change the game.

And here, as in the upcoming College Football Playoff, Mr. Gretsky’s timeless adage applies to us all, “I skate to where the puck is going to be, not where it has been.”

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Sources:
http://www.ohiostatebuckeyes.com/
http://www.secsports.com/schedule/football
http://www.apple.com/environment/
https://www.google.com/green/energy/
http://www.wired.com/2014/11/amazon-vows-run-100-renewable-energy/
https://www.teslamotors.com/powerwall
http://newscenter.lbl.gov/2015/09/30/price-of-solar-energy-in-the-united-states-has-fallen-to-5%C2%A2kwh-on-average/
https://www.washingtonpost.com/national/health-science/wind-solar-power-soar-in-spite-of-bargain-prices-for-fossil-fuels/2015/12/30/754758b8-af19-11e5-9ab0-884d1cc4b33e_story.html
http://www.wsj.com/articles/wind-solar-companies-get-boost-from-tax-credit-extension-1450311501
http://www.imf.org/external/
http://www.theguardian.com/environment/2015/may/18/fossil-fuel-companies-getting-10m-a-minute-in-subsidies-says-imf
http://www.eia.gov/todayinenergy/detail.cfm?id=13131
http://www.pjm.com/markets-and-operations/energy/real-time/loadhryr.aspx
http://ospowerwall.com/tesla-powerwall-faqs/
http://www.onyxsolar.com/
http://www.collegefootballplayoff.com/
http://www.technoform.com/us/
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