HomeConnectivityThe hard ROI of smart street-lighting – seven ways for cities to make their money back

The hard ROI of smart street-lighting – seven ways for cities to make their money back

Only one smart city use case stands up to close scrutiny: smart street lighting. The business case for parking and garbage, the other functions in the holy trinity of smart city applications, is harder to make. And nothing else in the market even scans as a return-on-investment (ROI).

The standard arithmetic says smart lighting delivers a 70-75 per cent reduction in energy costs, with 50 per cent achieved just by switching to LED (light-emitting diode) bulbs, and a further 20-25 per cent eked out with lighting controls. Payback is pegged at around five years.

Upgrading to LED lighting does not bring intelligence, of course; that comes from connecting and controlling the lighting network. This also streamlines its maintenance. Civic authorities can save around 80 per cent on maintenance costs through centralised tweaks and insights.

Here, with input from UK smart lighting firm Telensa, we consider seven concrete ways cities can make their money back on smart street lighting. Each of these methodologies hinges only on the investment to upgrade and connect the lighting source, itself.

Additional use case – including related functions like traffic dimming, and extended functions like environmental monitoring – rely on additional sensors, for which a separate business case might be made. This article seeks only to define the core business case for smart street lighting.

“If you take these energy savings and maintenance savings, you have a very complex spreadsheet based on the solar calendar, which enables us to illustrate very accurately the savings that a council will make by adding controls to their street lighting estate,” explains Keith Day, vice president of marketing at Telensa.


The switch from incandescent bulbs to ultra-efficient, solid-state LED lighting could not be clearer: lower bills, reduced emissions, and longer life. Cities can halve their energy costs, says Telensa; payback comes in two years. If a city was ever required to save to invest, in order to get smart, then upgrading to LEDs lights the way ahead.


But cleverness only comes by connecting and controlling the lighting network, and there are at least four ways to tweak the controls to optimise energy efficiency. The first is to schedule light intensity across the city; the strength of the lighting might be reduced in certain areas, at certain times, such as in residential neighbourhoods in the small hours. It adds up, says Telensa.


The second technique is to set seasonal controls – to adjust schedules and set ‘trim times’ for lights to turn on and off. It is a powerful tactic away from the equator, notes Telensa. In northern European countries, the lights go on when the energy tariffs are highest, on dark mornings, for about half the year. “Saving a few minutes in busy hours translates into a lot of money.”


Smart lighting provides granular control. LED lights fade, slowly, over a period of about 15 years. Cities can maintain a constant light output, and save on energy, turning the light intensity down on new installations. A new LED might be set 15 per cent lower than an old one, says Telensa. “It adds up to quite a big saving.”


Street lights get dirty from pollution, particularly on busy streets. Their lenses are cleaned every five-to-six years; their intensity starts to wane as they are due for a clean. Telensa says city councils can save by stepping down the intensity of their street lights immediately after cleaning, by seven of eight per cent, and increasing it by degrees in the period to the next visit.


Without connectivity, the only way for cities to determine whether its lights are working is to send engineers out, or else to wait for citizens to call in. The first solution is expensive, and the second is unreliable. Neither work as an elegant approach to save the planet and keep the lights on. Smart lighting shows up immediately when a link in the system goes down.


Accordingly, if street lights are reporting faults, or even developing faults, the fix rate is increased and the truck roll reduced. “With all of these things, it’s labour, and especially wasted labour, which is the big cost,” says Telensa. “If you send a cherry picker out, you’ve already spent quite a lot of money; if the engineer finds the fault wasn’t what he thought, then the money is wasted, and the cost will increase.”

This is an excerpt and forerunner from a report and webinar, titled How to buy / sell a smart city – procurement models to make every city smart, to be published on November 5. Sign up to the Enterprise IoT Insights newsletter here to get updates about the report, and related news. Register for the webinar here to hear from speakers from AT&T, Cisco, Cradlepoint and Navigant, among others.

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