Cost-effective dynamic daylighting for existing buildings
Montage showing IntelliBlind, IntelliBlind mounted on its host blind, and an urban skyline

Market Research

Development of the IntelliBlinds™ Model D was preceded by extensive market research to determine the size of the market, identify factors crucial to market success, establish market-driven product requirements, and develop models to project market penetration and gross sales.

Market-Driven Development

There are two basic approaches to developing technology-intensive products: technology-driven development is aimed at developing lucrative applications for new technologies, while market-driven develoment is aimed at developing products to fill specific market gaps. The IntelliBlinds™ Model D development has been squarely market-driven:

IntelliBlind development included market gap analysis, research surveys, technology assesment, market-driven requirements definition, market penetration and diffusion modeling, and commercialization readiness assessments
Chart 1: IntelliBlinds™ Development was Driven by Extensive Market Research

The IntelliBlinds™ Model D was developed to exploit a thoroughly analyzed market opportunity. Before development began, enough research was done to establish the need for a product like IntelliBlinds™, estimate the potential size of the market, assess potentially competing technologies, and determine the product and technology characteristics necessary to ensure market success.

The market research continued concurrently with IntelliBlinds™ development, tracking advances in conventional DDC technology as well as economic, technical, and regulatory changes in the non-residential energy efficient retrofit market.

With each major improvement in IntelliBlinds™ design, a commercialization readiness assessment was done to determine whether or not IntelliBlinds™ and the market were ready for each other. Based on the latest assessment, the answer is an emphatic "yes": IntelliBlinds™ is ready for the market—and the market is more than ready for IntelliBlinds™.

Market Gap Analysis

Development of the IntelliBlinds™ Model D was initially motivated by the results of several market analyses performed in the early 1990's:

  • A key enabling technology for non-residential daylighting—first-generation electronic dimming ballasts—was just becoming commercially available.
  • However, our analysis of the non-residential building stock showed that the bulk of potential daylit floor area in the U.S. was due to ordinary vertical view windows, rather than clerestory windows or skylights—and view windows must be shaded to avoid glare.
  • We performed an initial survey of the daylighting research literature and concluded that effective daylighting via view windows requires Dynamic Daylight Control (DDC). Without DDC, windows are over-shaded most of the time, substantially reducing the achievable savings. By eliminating the dependence of savings on manual shading adjustments, DDC doubles the mean savings while substantially reducing the variance.
  • We performed an initial projection of the potential market for a cost-effective DDC technology, concluding that the market would support a cumulative investment of more than $1 billion in DDC products that are cost-effective for retrofit applications.
  • Because DDC technology was not commercially available in the U.S., we analyzed European DDC products, as well as systems proposed by U.S. researchers, to assess their potential cost-effectiveness. Our conclusion was that conventional DDC technology was cost-ineffective for larger-scale retrofit use in U.S. non-residential buildings, and would remain so for the foreseeable future.

These analyses identified a large market gap for cost-effective DDC technology, triggering further market research (and, eventually, actual development of the IntelliBlind™ Model D).

Daylighting Research Survey

A major asset in the development of daylighting technologies for commercial applications is the 30+ year history of daylighting research at university and government laboratories. Most of the results of this research are in the public domain, and provide a solid basis for quantifying the energy saving benefits of DDC, as well as for guiding the development of new DDC products and technologies.

Based on the positive results of the market gap analysis, we performed a second, more thorough, review of this public-domain research to:

  • Establish functional and performance requirements for an effective DDC system
  • Obtain credible projections of the energy savings achievable with such a DDC system
Even a summary of the research literature reviewed over the course of IntelliBlinds™ development would be beyond the scope of this discussion. However, an indication of the breadth of the literature review (excluding prior-art patents) is given by References, which lists just the works cited on this website.

Technology Assessment

While the market gap analysis included an initial survey of conventional DDC technology, a more in-depth technology assessment was warranted before investing in actual IntelliBlinds™ development.

This in-depth assessment included:

  • A patent survey
  • A survey of commercially available products that could be adapted or integrated to provide DDC functionality
  • Cost and performance projections of potential DDC products based on existing technology

Patent Survey

While the patent survey emphasized DDC for daylighting applications, it also spanned the broader fields of daylight harvesting, automated shading, and building control.

In addition to helping to identify the prevailing state-of-the-art, the patent survey identified opportunities for patent-protected innovation and provided a foundation for subsequent patent applications (the technology underlying IntelliBlinds™ is covered by several in-force patents, as well as several pending and in-process patent applications).

Survey of Commercially Available Daylighting Products

At the outset of IntelliBlinds™ development, no "turn key" dynamic daylighting solutions were available in the U.S. Instead, the only way to implement dyanmic daylighting was via custom, project-specific integration of components in four key technology areas: lighting controls, automated shading, sensors, and building controls. Therefore, in order to gain a full understanding of the capabilities and costs of the state-of-the-art in dynamic daylighting, a thorough survey was performed of the products available in each of these areas.

Cost and Performance Projections

In order to quantify the cost-effectiveness of the state-of-the-art, dynamic daylighting systems based on conventional technology were conceptualized on paper and then subjected to cost and performance analysis. The cost models were then used to assess the impact of various potential innovations on overall price, and then—eventually—to project the cost of IntelliBlinds™ itself.

Costing of systems based on conventional technology was performed using bottom-up estimation techniques. For IntelliBlinds™, costs were projected using both bottom-up estimation and costing-by-analogy. Performance (and, hence, energy savings) was estimated by extrapolating the published results of government-sponsored research in dynamic daylighting.

The Conventional State of the Art, Conventional Technology Tradespace, and A Benchmark Conventional Configuration summarize the design and projected cost of systems based on conventional technology, while Energy Savings and Payback Periods describes the methodology for obtaining the various performance projections reported on this site.

Requirements Definition

The best-known (and most important) product attribute for success in the non-residential energy efficient retrofit market is the payback period, defined as the product's net installed cost divided by its annual savings. However, it's intuitively obvious that other product attributes (such as complexity or human factors) could also affect the probability of successful commercialization.

To identify the other product attributes crucial for market success—as well as establish specific requirements for each attribute—we interviewed representatives of four stakeholder categories: manufacturers, distributors, building owners/operators, and building occupants. We also analyzed the market penetration of various non-residential energy efficient products, attempting to correlate market success with product characteristics.

Our research showed that a product's overall probability of successful market entry can be predicted using just three metrics:

  • The Commercialization Index is a weighted measure of a product's manufacturability, ease of distribution, ease of installation, and competition in the marketplace—factors of primary interest to manufacturers and distributors. The CI represents the Risk*Investment product associated with commercializing a new product.
  • The Payback Period is the product's effective initial cost divided by the value of its annual energy savings. The payback period is the metric risk-bearers typically use to evaluate energy efficient retrofits, and is strongly correlated with ultimate market penetration.
  • The Human Factors Index is a weighted measure of the product's expected impact on the building occupants' comfort, convenience, health, privacy, and control over their environment.

These indices helped establish quantiative requirements for the IntelliBlinds™ Model D, as well as support Go/No-Go commercialization decisions as its development progressed.

Market Penetration and Diffusion Modeling

While an initial market gap analysis should include a market size projection, investment in actual R&D justifies a more accurate estimate of potential sales—as well as estimates of the rate of sales growth.

Commercialization-Limited versus Demand-Limited Sales

A product's ultimate market penetration and rate of sales growth can be limited by any of several factors, the most important of which are manufacturing capacity, marketing resources, and buyer demand. However, if the product is priced to yield an attractive profit margin, then it should (and typically will) be commercialized with enough manufacturing and marketing resources so that market penetration and sales growth with be limited purely by demand.

And if the sales projections are being made primarily for the purposes of technology valuation—as is the case with our IntelliBlind™ projections—then commercialization constraints are irrelevant, because they aren't inherent to the technology itself.

So our market penetration and diffusion modeling was aimed at quantifying demand-limited sales, vice commercialization-limited sales. However, the models can be easily extended to include the effects of manufacturing and marketing constraints, e.g. to predict actual revenues under various commercialization scenarios.

Model Development

To develop our market penetration and diffusion models, we correlated historical market penetration data for several analogous products with factors such as price, energy savings, impact on building occupants, and time since market introduction.

We used two criteria in selecting the analogous products on which to base the models: (1) substantial market penetration; and (2) similarity to IntelliBlinds™ in terms of major product benefit, intended application, and envisioned marketing/distribution channels.

Unfortunately, even today, no daylighting products have achieved enough market penetration to support credible market projections for DDC products. However, many energy efficient lighting technologies have achieved substantial market penetration, and have the same potential buyers (and marketing and distribution channels) as IntelliBlinds™ will have. Our market models were based on historical penetration data for three such products: electronic ballasts, occupancy sensing light switches, and specular reflector retrofits for fluorescent luminaires.

Like published penetration models for the non-residential energy efficient retrofit market, the penetration model we developed is a single-parameter model that projectes relative market penetration as a function of median payback period. However, our model predicts significantly greater penetration for than published models. While this increases our confidence in the market potential of IntelliBlinds™, for the sake of conservatism, the projections given herein are based on the more conservative published models.

Market Potential describes the results of our market projections for the IntelliBlinds™ Model D—again, based on the more conservative published models, rather than our own IntelliBlinds™-specific model.

Commercialization Readiness Assessment

The optimum time to commercialize a new product represents a trade-off between (A) gaining a first-to-market advantage, and (B) waiting until the product and market are truly ready for each other.

Because the order-of-magnitude advantage in cost-effectiveness the IntelliBlinds™ Model D enjoys over competing technologies is due to so many innovations (most of them patent-protected), a first-to-market advantage is virtually assured. For that reason, we could afford to set very stringent criteria in assessing commercialization readiness.

We performed a commercialization readiness assessment after each major improvement in IntelliBlinds™ design or technology, resulting in more than a dozen assessments over the course of development. For each assessment, we

  • Evaluated the new IntelliBlinds™ baseline configuration against the product requirements we had previously established
  • Updated our projections of sales price and energy savings
  • Plugged our updated price and energy savings projections, along with current electricity prices, into our market penetration model
  • Evaluated secondary market factors such as the extent of media coverage of topics related to non-residential energy efficiency, as well as the existence of economic and PR incentive programs such as ENERGY STAR and LEED

The most recent assessment shows that IntelliBlinds™ now meets all of the stringent criteria we established for commercialization readiness. IntelliBlinds™ is ready for the market—and the market is more than ready for IntelliBlinds™.

Summary of Key Points

  • The IntelliBlinds™ Model D was developed through a market-driven R&D process
  • Development was preceded by extensive market research, which included
    • Market Gap analysis
    • Daylighting research surveys
    • Technology assessments
    • Product requirements definition
    • Market penetration and diffusion modeling
  • Each major improvement in design or technology was followed by a structured commercialization readiness assessment, the most recent of which shows that IntelliBlinds™ is more than ready for commercialization
Cost-effective dynamic daylight control for non-residential daylighting
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