Volume 48, Issue 4- April 2013


The “Battle for the Wall”
Code Bodies and Government Agencies have
Placed the Future of Glass Façades at Risk
by Scott Thomsen

During the Glass Association of North America’s Building Envelope Contractors Conference, Scott Thomsen, president, global flat glass group, Guardian Industries, gave a keynote presentation on the role our industry must play in keeping glass a significant component in building façades. In a speech titled “The Battle for the Wall,” he explained that glass is competing with brick, concrete and other solid-surface materials often deemed more energy efficient. As he explained, though, by embracing new technologies that can help increase the performance of glass, the industry can help ensure its continued use in façades. His presentation, adapted for print, follows on the next six pages. To watch a video from the presentation, view the article in the digital edition at www.usglassmag.com/digital/2013/Apr2013.pdf.

It’s no secret that many parts of the world are facing severe pressure in the window-to-wall ratio (WWR). In North America, there has been continual pressure to reduce it from 40 to 30 percent and we are seeing very similar trends all around the globe.

Brick and stone and other façade materials are the competition. We all dream of a façade with a window-to-wall ratio of almost 100 percent. When you look back in history, a typical window-to-wall ratio was less than 5 percent. And all over the world, people are trying to reduce the amount of glass in façades, claiming that a solid surface wall has a much better U-factor and insulation performance than an all-glass façade. Though architects love and want to build with light, given the current trend in the market, will an all glass look become something of the past?

Everyone is well aware of the massive change in the building industry since the recession in the United States and Canada. Just to give you some statistics, commercial building floor space installs dropped from 1.6 billion square feet to 650 million square feet in less than five years. The dollar value of construction in the commercial space plummeted from $600 million per year to $230 million in just five years. We are all fighting for a smaller market space. You have fewer opportunities to grow your business now and many companies are scratching and clawing to find that bare minimum that keeps their business going forward.

Energy costs are trending higher and higher, both in the short term and long term. We have seen fuel costs rise from $1.50 to $3.75 per gallon in ten years. We’ve seen U.S. national electricity rates rise from 7 cents per kilowatt hour to 10 cents. All over the globe we have seen how natural gas reached as high as $12 to $15 per btu—where in the U.S. we enjoy $3.75. What will happen when the U.S. becomes a large exporter of liquefied natural gas to countries all around the world? The price of natural gas will go up. If the price of natural gas goes up, government and legislative bodies will become more and more focused on energy codes and the energy codes will tighten further.

How this industry reacts to those tightening codes will determine the size of the business that we all have going forward. How we decide to handle the increase in glass performance will also determine how much money we can make for our businesses. The energy codes are tightening. This is a global trend; it is happening and you need to be prepared. If you are not prepared you could be left behind.

Areas of Emphasis
Our competitors are solid surface walls—the other non-glass building materials that can be used on the façade. Depending upon the parts of the world to which you travel, you will see areas where window-to-wall ratios are increasing and areas where the use of glass is decreasing. In the parts of the world where the entire supply chain or value chain is working in concert to promote and sell the value of energy efficiencies, window-to-wall ratios are increasing or staying the same. We see reduction in window-to-wall ratios in places where the channel is fragmented.

Over the last ten years, there’s been a 25-percent reduction in U-factors as prescribed in ASHRAE standards and a 33-percent reduction in the International Energy Conservation Code. Remember, a couple of years ago the industry was able to stop the ASHRAE code from reducing the window-to-wall ratio from 40 to 30 percent. If it had dropped from 40 to 30 percent, there would have been a 25-percent reduction in the amount of glass in the building envelope. Now, proposed new codes are further tightening. So our big challenge right now is how can we keep the window-to-wall ratio at 40 percent?

I have visited a lot of customers over the last ten years throughout Europe at both the contract glazier and the fabricator levels. I’ve found that companies that did not prepare, that did not invest in capital, in training and in value-added selling, are either no longer in business or are one-half the company that they used to be. A look at the energy codes and standards around the globe (see box above), shows that the mandatory codes are strongest in Europe and Russia. There are codes in the U.S., but some are mandatory and some are voluntary. Our commercial channel has one of the lowest usage [levels] of coated glass in façades around the globe. It’s disappointing that the United States isn’t 100 percent coated in the commercial segment like many other parts of the world.

Remember, there is a direct correlation between energy efficiency and glass consumption. Today’s glass consumption in the U.S. is 12 to 15 kg per person per year. In most of Europe, it is 20 to 25 kg per person. So these codes are the key to our industry.

How Do We Save Energy?
Consider a Department of Energy official or a legislator sitting in Washington, D.C., asking, “Okay, how do we, on a macro scale in the U.S. government, save energy?” Well, the first thing they would do is look at the U-factor performance of a solid wall versus a glazed wall. We need to figure out how we can attack both the ASHRAE and HVAC community codes and the alternative façade materials, because they’re using this information to go to the government and say “less glass is better.” They ignore a lot of the other factors such as daylighting, productivity, comfort, performance. Who wants to work in a brick box? Not many people.

How do we sell and promote the other benefits beyond just energy efficiency? If the window-to-wall ratio is reduced there will be less glass per façade.

For example, the U.S. commercial market makes up about 17 percent of all the glass we sold. There is about 5 million tons of glass sold a year in North America. If we lose 25 percent, that is a loss of 250,000 metric tons of glass—that is a massive change in the amount of glass in façades. There will be fewer windows immediately. In other parts of the world we have seen fewer windows within two to three years after the adoption of legislation to reduce the window-to-wall ratio.

Windows also will be smaller. If you had 40 percent window-to-wall ratio, the first thing you would have to do is block out the amount of the glass that you use. So strip windows would become punched openings. This is a supply chain shift. If you draw a predominant source of revenue from curtainwall, now you’re battling against commercial window companies that do shop-glazed units. Your competitive space is getting bigger as more players enter the channel. Curtainwall usage would shift toward strip windows. We see this now in parts of Europe. The amount of traditional curtainwall is being reduced, especially in places such as Latin America and Asia Pacific countries. What does this mean to your business? Less profit per building.

Architectural Insight
I was fortunate enough to participate in a gathering where architects, developers and members of the glass industry talked about their vision and views of the glass industry and trends. There was a resonating, consistent message: the glass industry is being picked on because we are not doing enough to drive energy efficiency at a cost-effective level.

One of the participants, architect Ken Shuttlesworth, has said, “the glass box is dead. The glass façade industry has failed to implement step functions in energy efficiency, weight reduction and flexibility of form.” He is making a lot of public statements that say unless we deliver better energy efficiency, [windowless architecture] is the building type of the future. The problem is more and more data is being published that shows strip windows actually provide better overall energy efficiency for the façade.

So, we have a problem in that we have to serve two masters: energy code legislation and architect vision and creativity. We have to be able to meet both needs.

How do we win this battle for the wall?

First, we have to understand the competition. The competition is solid surface wall material. Your cement manufacturer wants to sell more cement. We want to sell more glass. That’s the bottom line.

We have to define our competitive advantage. What is the real competitive advantage an all glass building (40 percent window-to-wall) has over a brick building with a couple of slot windows? We can’t currently quantify it and we can’t do (a numerical) calculation on the payback. How do you define daylight? How do you define human comfort? How do you define work productivity? These are all factors that go into how people design a building, how people build a building, how they interact with the glass on a daily basis. We have the energy efficiency, but we also have all these other aspects of a building that [make] people want to live and work in the glass environment. The bottom line is, we have to increase the energy efficiency of the glazing.

In Europe the entire value chain has worked together to actually maintain or increase the window-to-wall ratio. Today, you will actually see more glass in a façade then you did ten to 15 years ago in many parts of Europe. They have been very proactive on the code front, but they have also been extremely proactive in every step of the value chain and have added the technologies that they need to go to the next level.

We have to create value in each step of the channel. If the glass company does a lot of research and development on, for example, an electrochromic glass and the fabricator doesn’t have the capability to handle the electrical wiring, or the contract glazier doesn’t have the contract skills to be able to install it into a façade, the whole channel breaks down. How do we increase value if each step in the channel does not understand what they need to do in their business to be able to be successful and increase energy efficiency?

We also have to eliminate co-adoption risk. We have to promote energy efficiency in unity through the channel. We must try hard to sell energy efficiency rather than merely taking an order.

We have a very complicated chain: the glass and coatings manufacturer has to sell to the fabricator; the fabricator has to sell to the contract glazier; the contract glazier has to sell to the general contractor; and the general contractor has to sell to the building owner or developer. Then we have two tangential aspects: we have the architect who wants to put the vision in the building and we have the façade engineering or curtainwall consultant who is representing the interests of one party. As we try to innovate through technology, everybody in the channel needs to step up and figure out what to do with this new technology.

All Together
In the chart above you can see what could happen to the five steps through the channel (from the book the Wide Lense by Ron Adner). There could be a product or technology that might have three pluses for the glass producer, two pluses for the fabricator, a minus for the glazier, two pluses for the general contractor and four pluses for the owner/developer. All it takes is one negative in the channel for everything to fall apart. If there’s a technology that’s great for everybody in the channel except the contract glaziers, then his margins get reduced. So the contract glazier says, “I don’t want to do this. Why would I want to make less money just to make the general contractor and the owner/developer more money?” You wouldn’t. That’s why we need to change the value equation.

How do we improve energy efficiency and compete with solid walls? One answer is high-performance coatings. They are used in about 65 percent of commercial and about 95 percent of residential projects in the U.S.

Argon gas filling is another step. It is an easy way to improve the energy efficiency of an insulating glass (IG) unit. Warm-edge spacer technologies are also improving. Surface-four coatings are becoming available where minimal change is needed in the value chain to integrate these coatings. Using silkscreen patterns to reduce solar heat gain and triple-glazed IG units are other possible steps.

In many parts of the world today, 80 percent of the IG units are triple glazed. This was a key step in Europe’s ability to maintain its window-to-wall ratio and a key step in our future.

We also have to support emerging technologies, whether it’s electrochromic, switchable, bent skin façades, double skin façades or BIPV. These may seem unreachable or too futuristic, but they are not. It wasn’t that long ago when the world was dominated by pyrolytic coatings yet today pyrolytic coatings are dying on a global basis as sputtered coatings continue to evolve.

When you look at the last 15 years, contract glaziers have not had to change too much in terms of the supply chain. The innovation has been coming from coatings. You were able to get a low solar heat gain coefficient and gain more and more transmission which was good for daylighting, glare and overall energy performance (see chart on the next page). But, what happens to energy efficiency when coatings start to tap out? That’s when alternative technologies are going to be required, and that means it’s time to change.

The large-size IG units, such as window-to-floor and floor-to-ceiling-glass, are also growing in popularity. A lot of units are coming in from Europe because they can coat jumbo sizes there. They build jumbos and are able to install them. Many U.S. fabricators are not able to handle the larger sizes, which makes it more and more challenging to meet the demands of the channel.

Stringent energy codes will drive the need for triple glazing. They will not apply to every zone in the energy bands in the U.S. and Canada, but if you don’t go to triple glazing we will be challenged to reduce the window- to-wall ratio. Europe has been very successful in migrating to triple glazing and has maintained the window- to-wall ratio. We now see 25 to 30 percent window-to-wall ratios in the façade in other areas of the world where the change was not made.

Adoption Risks
Let’s take a closer look at triple glazing as an example. Glass companies have to produce triple glazing specific coatings. Sealant producers need to develop more materials and structural integrity because now there are three lites of glass. Fabricators have to be able to make triple-glazed units at a decent cost, which means they have to invest in fabrication equipment, handling and transportation. Metal fabricators must change the design because now the width of the unit is much bigger. Contract glaziers will have to deal with heavier units. Glazing methods and materials have to be different. If everyone in the channel doesn’t do something to co-invent, there will be huge adoption change risks.

Let’s look at a second example, electrochromics. What is the adoption risk for electrochromic coatings? When you look at the glass producer, your risk includes the cost of testing, energy modeling and tools. Sealant producers have to have a sealant that allows an electrical wiring to come out of the IG unit. The fabricator must work with the electrical wiring/cabling and testing—and normally they don’t test the IG units before they ship, so that’s a whole other level of complexity. The metal fabricator has to figure out how to channel wiring through conduit to get it out through to the power distribution box. But the biggest changes are to the contract glazier. They must become electricians. Contract glaziers will have to deal with electrical wiring, testing certifications and their bonding levels will change quite a bit. No longer are they installing an $8 to $10 per square foot IG unit; they are installing something that could be $20, $30 or $40 per square foot. But, depending upon how you run your business, you will be able to sell that value and put more money into your pocket.

The Good News
Many countries, especially Germany, Switzerland, Austria, and the U.K., are able to hold or gain window-to-wall ratio. They have very strong code implementation and enforcement there. In parts of Europe you can’t sell a building unless you have a piece of paperwork that says the building meets the codes. If you don’t meet the codes then you either have to drop the sales price of the building or you need to install glazing that meets the building’s requirements.

Trends also are strong for zero energy buildings with a true payback. This already is a reality in Europe and many buildings are getting certified at zero energy. There has been strong value chain support by every level.

Another big trend in Europe is double-skin façades. This may seem costly, but when you study it, you’ll find a very quick payback.

Ventilating units are another trend. The same concept provides air ventilation certain times of the year when it’s hot and then retracts for cool weather.

Now to the bad news. There are also parts of the world where glass is losing the battle. If you look at the skyline of Sao Paulo, Brazil, you won’t see much glass. The strong people in the value chain are the cement companies. There’s only about a 10 to 15 percent window-to-wall ratio in major cities such as Rio, Sao Paulo and Buenos Aires. A big challenge for the glass industry is how we change the minds of the architects, the government bodies, etc., to increase the amount of glass and educate them about the benefits of glass.

My advice would be upgrading your capabilities to support argon gas filling and warm-edge spacers. ASHRAE’s latest push is from 40 to 30 percent. The industry as a whole has to pull together to fight back at this ASHRAE code change. We need more of this and we need more people to be an active voice and a participant.

The drive for zero energy buildings is going to require advanced glazing methods. It will be a significant part of the market and the business in parts of North America in three to five years. You will need a sales force capable of promoting value-added products and services. I think this is one challenge everybody in the channel needs to be able to explain. I call it the 30-second elevator speech—why they should buy advanced glazing and why they should buy more energy-efficient products.

What Can You Do?
• Embrace the trend toward high-performance coatings and glass technologies. It is an opportunity to increase profit margins. When the recession hit North America we saw almost a 50 to 60 percent drop in the amount of glass. In 2007 there were 42 float lines running in North America. Today there are 30. When that much glass comes out of the channels the industry also feels the pain.
• Learn about the advanced technologies that are coming. This isn’t a light switch. You don’t all of a sudden wake up one day and say “hey I’m going to install BIPV units.” It might take two to three years to learn the product, the technology, codes, payback, the value and how you sell it. Get educated. Don’t wait for everyone else to do it first; we need some early adopters.
• Embrace the more stringent codes. If you want to maintain profits, if you want to maintain the amount of glass that goes into a building you need to embrace the codes. Don’t fight it.
• Engage with industry partners. Take the time to figure out how you can get involved in the business. Partner with suppliers throughout the channel that are working on zero energy building. Promote the benefits of energy savings coatings to the next level in the value chain. We need to improve energy efficiency or we will lose surface area. If we increase or maintain the window-to-wall ratio we all win.
• Think about the adoption in the channel and what you need to do. What do you need your fabricator to do? What do you need from the general contractors? We need to push up and down both ways in order to maximize the value. This business runs on square meters and square feet. We need to get our minds on how we maximize both the value and the profits that we extract per square foot or square meter from a façade. If we all have full value chain adoption we all win.
• Get out of the order-taker mentality. Take the time to understand the technology, the business and the value, and how you can convince the general contractor, the architect, the façade engineering consultant to really value the services you provide and products that you channel and give to the customer.

The way we are going to make more money is by working together, figuring out how to adopt technology through the chain, having everybody do their own part and working hard as an industry to lobby against changes in window-to-wall ratio that are being proposed by various bodies.

Scott Thomsen is the president, global flat glass group, Guardian Industries in Auburn Hills, Mich.

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