Sage Electrochromics has received a $20 million injection of capital to continue on with an idea it's been working on since 1989.

The company specializes in electrochromic windows and skylights that change their tint with environmental conditions to save energy. If it's warm, the windows go dark to block out solar radiation. Heat doesn't get inside the building and thus the air conditioner doesn't have to work as hard. When the heat eases off, the windows become clearer.

Although the company has a long history, high-energy costs and new regulations are just now combining to create what could be an optimal market for the company. Heating and air conditioning consume about 16 percent of the total amount of energy in the U.S. – building operations consume 39 percent of power in the U.S. and HVAC accounts for 40 percent of that total. Air conditioners and heaters are also notoriously inefficiently used.  

Anything that can cut power consumption, as a result, is getting a more serious look from potential customers than in the past (see Green Building: Cheaper Than You Thought). Large commercial builders, for instance, report that a growing portion of their revenue comes from LEED-certified projects.

Several states and the E.U. are also passing regulations that mandate better energy efficiency in buildings. Expect to hear more from Washington about building efficiency too. Secretary of Energy Steve Chu has been one of the big advocates in the past several years for technologies that can curb power consumption in buildings (see Green Light post).

The Lawrence Berkeley National Laboratory, which Chu ran until recently, is one of the major international centers for building efficiency research. The latest LEED standards, in fact, put a greater emphasis on energy efficiency than previous standards, which tended to emphasize the chemical content and "green-ness" of different building materials.

Sage, though, will face something of an uphill battle. Other companies, such as Denmark's PhotoSolar, make windows that block solar heat with a simple passive film inserted between two sheets of glass. The windows have a permanent, gray tint to them, but you can still see out of them. More importantly, they don't require any electronics or controls.

Investors in Sage's round include Good Energies and Applied Ventures, the venture arm of Applied Materials. Applied initially entered the energy market by investing in solar companies and making solar equipment but has been branching out into lights, batteries and other technologies. Applied is an investor in some of these technologies but will also likely become an equipment provider to some of these industries.