Research Frontiers (REFR)

Company website 2020 Financial Report Stock Analysis

95^%

of heat

blocked by Research Frontiers’ SmartGlass

45^%

Companies

around the world license Research Frontiers’ technology

235

Patents

issued worldwide

View Our Analysis

The Path to Drawdown: Dynamic Glass

Buildings account for 32% of energy use and 19% of energy-related GHG emissions worldwide. Much of this energy use and emissions come from heating the interiors of buildings in the winter and cooling them in the summer.

One way of making buildings more energy efficient is to install “smart glass” or “dynamic glass.” This is glass that dynamically changes its opacity to reduce or increase the amount of light and heat that’s allowed to pass through. This means reducing the amount of light and heat to keep buildings in the summer, and maximizing them in the winter. This technology replaces static glass that’s prevalent in commercial buildings in industrialized countries.

Dynamic glass can be based on electricity, heat, or light: it changes color and tint in real time in response to the light or heat that it’s exposed to, or when the user flips a switch. It has the potential to save energy for both thermal and lighting systems in buildings and transportation.

Today, high production and installation costs are challenges to wide adoption. But Project Drawdown is hopeful that a rapid scaling is possible and projects its growth between now and 2050:

<::marker> In 2018, 42 million square meters of dynamic glass were being used in commercial floor area
<::marker> If 50% of buildings become net-zero emissions by 2050, they would require 341 million square meters of dynamic glass.

If the world can achieve this scenario, dynamic glass would help avoid 0.3 gigatons of GHG emissions compared with high performance static glass.

About

Research Frontiers (stock ticker: REFR) is a nanotechnology company that develops and licenses its patented SPD-SmartGlass technology. Headquartered in Woodbury, New York, they license their dimmable glass technology to companies in many end markets around the world.

REFR's Role in Drawdown

Research Frontiers’ proprietary glass technology, SDP-SmartGlass, can be dimmed electronically to adjust the amount of sunlight that enters the space. It can be operated from a wall switch, dimmer, motion detector, light or temperature sensor, or smartplug. It can easily be integrated into any building control system.

The SmartGlass technology has so far been incorporated in tens of thousands of cars, aircraft, yachts, trains, homes, offices, museums and other buildings.

Tests conducted by Mercedes (p. 9) show that the SmartGlass technology reduced car cabin temperature by 10°C. This reduction in temperature also leads to a 4g/km reduction in CO2 emissions and improves gas mileage per driving range by 5.5%.

When installed in buildings, this can help save 35%-60% on lighting energy, cuts 95% of heat and 99+% of UV radiation (p. 9-12)

Research Frontiers’ revenue is based on licensing this technology to their customers, who incorporate the technology into their glass manufacturing process. Research Frontiers’ revenue has been on the steady rise, growing by about 6% between 2016-2019. The COVID-19 pandemic put a dent in their 2020 revenue (p. F-3), but the company expects to bounce back soon.

REFR: What We Like

As the SmartGlass technology can be integrated into any glass product, Research Frontiers’ customer end-markets (p. 4) are very well diversified. They include automotive, aircrafts, architecture, trains, museums, yachts and ships. This diversification helps Research Frontiers be resistant to business cycles in each of these industries.

What We Want to See Improve

Track Emissions

We are encouraged by Research Frontiers’ energy- and emissions-saving SmartGlass technology, we need to know the company’s direct and indirect emissions. As of now, they provide no such data. Scope 1, 2 and 3 emissions should be tracked and reported in an annual sustainability report.

Set Emissions Reduction Targets

On top of this, we would like to see Research Frontiers setting targets for reducing their own emissions toward net zero. This should be conveyed as clear, quantitative targets by a specific timeframe.

Expand Faster

Research Frontiers is a small company with six full-time employees (p. 3). This small size makes the company vulnerable to key employees’ departure from the company. We are eager to see Research Frontiers expand their licenses faster so that they can grow in the near future.

Related Dynamic Glass Stocks in the Climate Index

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Allocated	Company	Description
0.09%	View, Inc. (VIEW)	View, Inc. makes smart glass that reacts to sunlight, weather, and other factors. Dynamic glass helps cut building energy use and emissions
0.02%	Crown ElectroKinetics Corp. (CRKN)	Crown Electrokinetics makes pigment-based film that can be embedded between sheets of glass to control its opacity. Dynamic glass can cut energy use
0.02%	Research Frontiers (REFR)	Research Frontiers makes smart glass with nanotechnology that can be dimmed depending on sunlight, reducing building energy use and emissions.