Using composite materials – in this case fibreglass-reinforced plastic – Tractile combines solar power generation, solar hot water generation and insulation in a cyclone-rated and fire-resistant roofing tile.
Industrial technology company Trac Group Holdings Limited is listing on the Australian Securities Exchange (ASX) to raise funds for the commercialisation of its “smart roofing” solutions that can harvest the sun’s energy to generate electricity and heated water, while also offering home-owners and commercial builders about the most storm-resistant and bushfire-resistant roofing materials they can find.
Under its Tractile brand, Trac Group is bringing to market what it says is a replacement product for traditional roofing materials, using applied technology to accomplish the multiple tasks that a modern roof should be able to do, in one multi-function product.
“Existing roofing technologies are dumb and very passive building materials – they just sit on the roof and they get hot,” says Jason Perkins, founder and CEO of Trac Group. “We wanted to identify all of the different elements of a roof and what it can do, and integrate them in one product. Tractile redefines the standards for roofing.”
Using composite materials – in this case fibreglass-reinforced plastic – Tractile combines solar power generation, solar hot water generation and insulation in a cyclone-rated and fire-resistant roofing tile. “It’s the same principle as a smart phone: it can do different things, and it’s integrated, the customer does not have to deal with multiple companies and suppliers,” says Perkins. The technology is called Roof Integrated Photovoltaic and Thermal (RIPV-T). It is patented, as is the building system that interlocks the tiles.
Using “layered technology,” Perkins says Trac Group was able to identify the things that a modern roof is asked to do, and put them together. “Obviously there has been a lot of interest in Australia in solar PV panels on the roof, to generate electricity to lower grid consumption – or even allow the house to live off-grid completely. There is increasing use of thermal hot-water supply.
“We looked at solar panels, and asked, ‘why can’t you incorporate the panels into the roofing tiles? What about hot-water pipes – why can’t we embed those and increase our share of revenue in each project? Integrating technology into the skin of buildings for the benefit of the owners is the design and product philosophy,” he says. The result is large-format, lightweight, high-strength, flat-profile roof tiles and solar roof tiles with solar photovoltaic and thermal capacity integrated into the tiles, creating both electricity and hot water from a single unit.”
In this way, says Perkins, your roof can have inherent earning ability. “Roofs used to be a passive component of a house, but now they can be an important, active part. With Tractile you’re creating a financial asset. The by-products are heat and water, which reduces the energy you need for your domestic hot water or your house heating. You can make your home effectively energy-independent.”
Perkins says Trac Group looked for the “toughest” international standards and then designed the tiles to exceed them. This includes fire-rating, with independent third-party testing giving the roofing product a Bushfire Attack Level rating of 40, making them suitable for active bushfire zones. They are engineered to withstand Category 5 cyclones with wind speeds above 280 km/h.
The company secured a highly competitive $236,000 Proof Of Concept (POC) grant from Commercialisation Australia in 2011. The funds were used to prove the concept that the Tractile products could be manufactured to meet Australian Standards for roofing and within a marketable price band.
The composite materials are lightweight, and also non-corrosive, which makes them extremely resilient for coastal property. The company also participated in the Queensland Government’s Embedded Energy of Composites Project, with the researchers finding the Tractile roofing was eight times more sustainable than concrete or steel, and generated 4.5 times less CO2 per kilogram.
The tiles are manufactured in Malaysia, but all testing and engineering certification is being completed in Australia. Part of the proceeds of the IPO will be used to finalise certifications suitable for the international market, which the company has firmly in its sights.
“Roofing is a huge industry worldwide. But there has been basically no innovation in it for decades. The biggest innovation in concrete tiles for the last 50 years has been different-coloured paint. The trends we’re tapping into – population growth, urbanisation, growing middle class, climate change, and the need for energy-efficiency – are all long-term global trends. We definitely want to develop Tractile into an international brand,” says Perkins. The tiles are trademarked in Australia, New Zealand, the EU, China, India and the US, and have very wide global patent protection.
TRAC Group CEO Jason Perkins Talks With Michael McCarthy
Trac Group is issuing 26 million shares – or 31.56 per cent of the company – at 25 cents a share, to raise up to $6.5 million, with a minimum subscription of $3.5 million. At the maximum subscription, the initial market capitalisation will be $20.6 million.
This is an early-stage industrial company that has not traded in any meaningful capacity. Trac Group is a loss-making company as at 30 June 2015: it brought in just $86,368 from customers in FY15. It has mainly been in in research and product development stage, before conducting market trials, and installations at about ten sites. The Tractile technology has to be seen as being in the early and expansion stages of commercialisation.
Investors in the float are effectively speculating on the successful commercialisation of the Tractile tiles. The market for traditional roofing and solar roofing products is highly competitive and dominated by large companies with established brands. Tractile is going up against them, as a premium quality product with additional features.
“Obviously we are a very low-volume manufacturer at the moment,” says Perkins. “We don’t have the infrastructure and scale and supply chains of the Borals and CSRs, to generate the volumes to bring down pricing.” At the moment, he says, Tractile is cost-competitive with Colorbond Ultra (Bluescope Steel’s premium steel roofing product.) “We can lower that price as we build volume. We are more expensive than a lot of competitor products but you need to compare that in terms of benefits the product provides, compared to traditional tiles.”
This is where Trac Group is backing the integrated capability of its tiles, pay for themselves by generating energy savings and simple, performing better than rival tiles.
“If you have to replace your roof every ten years, you have to buy two or three rooves in the same period that you would have a Tractile roof. Upfront, our square-meter cost appears higher than traditional materials, but the performance attributes for the long-term home-owner can narrow that gap,” says Perkins.
The company is targeting the builders of homes with a value of $1 million-plus, which is almost the average price in Sydney and Melbourne. “The extra $20,000–$30,000 for a Tractile installation, depending on how the customer specifies the amount of solar and so on, that might not make sense on a $300,000–$400,000 development that is being built to be sold as quickly as possible,” says Perkins. “But anyone who is building a $1 million–$2 million home that they intend to be a long-term family home is not going to care about that extra cost because they are seeking value from quality in design and performance”
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