The R&D Tax Credit Aspects of LED Sensor Networks



By , , and


        On October 24th, Mayor Michael R. Bloomberg and transportation commissioner Janette Sadik-Khan announced an energy-saving plan to replace all of New York City's 250,000 streetlights with light-emitting diode (LED) fixtures by 2017. One of the nation's largest LED retrofitting projects, this effort is expected to save $14 million in energy and maintenance costs every year.

        NYC is not alone in its LED conversion. Throughout the country, a growing number of building owners and municipalities are migrating to LED lighting, which has gained strength as one of today's most efficient and rapidly developing lighting technologies. Advantages include outstandingly long lifespans of up to twenty years, very low wattage and resulting cuts on energy costs, and absence of toxic chemicals such as mercury.

        No wonder an LED revolution is on its way: according to McKinsey & Company, the value-based LED market share in general lighting for 2011 was estimated at around 8 percent in North America. This figure is expected to grow to nearly 45 percent in 2016 and 70 percent by 2020.

        While such revolution was somewhat predictable, its scope may be broader than imagined. Innovative uses for LED lighting infrastructure are transforming sources of light into sources of information. This article will discuss the ongoing development of LED sensor networks and present the federal R&D tax credit opportunity available for companies engaged in this field.


The Research & Development Tax Credit

        Enacted in 1981, the federal Research and Development (R&D) Tax Credit allows a credit of up to 13% of eligible spending for new and improved products and processes. Qualified research must meet the following four criteria:

  • New or improved products, processes, or software
  • Technological in nature
  • Elimination of uncertainty
  • Process of experimentation

        Eligible costs include employee wages, cost of supplies, cost of testing, contract research expenses, and costs associated with developing a patent. On January 2, 2013, President Obama signed the bill extending the R&D Tax Credit for 2012 and 2013 tax years.


Big Data and LED Enlightenment

        The usual pathways of information are being transformed. We are entering the world of the "Internet of Things" (IoT), where a growing number of objects are equipped with sensors and gain the ability to communicate among each other. In other words, thanks to the smart sensors technology , the physical world is becoming a type of information system.

        LED lighting infrastructure is bound to become part of the IoT. Recently created innovative systems have transformed light fixtures into networked, sensor-equipped, solid-state, smart devices capable of capturing and transmitting sensory data about the surrounding environment. Such systems make each fixture a node in a broadband network, wide range of applications can be used for a wide range of applications.

        This innovation enables lighting owners to capitalize on the LED conversion process, amplifying its benefits beyond reductions in energy and maintenance costs. LED sensor networks are innovative multiservice platforms that transform lighting infrastructures into strategic data-gathering assets.

        These novel networks are expected to provide privileged access to information, opening the way for a widespread use of "Big Data" that can contribute to greater efficiency levels and improved operations. Access to Big Data represents a new era for business intelligence, particularly due to the multiplication of new and improved advanced analytics software that transform raw data into actionable information.



Lights, Sensors, Action

        Formerly dominated by large, established companies such as GE, Philips, and Osram Sylvania, the LED market has seen the rise of relatively new entrants - Lighting Science, Eye Lighting, Ohm Lighting, and Terra LUX are a few examples. Founded in 2010 and headquartered in Sunnyvale, CA, Sensity Systems is also part of this group. On April 17, 2013, the company launched the Light Sensory Network (LSN), an innovative digital sensor network based on LED lighting infrastructure.

        NetSense Platform, the first commercially available installation of the LSN, leverages standards-based IPv4/6 data transports that enable the use of a variety of application-specific sensors and software analytics. The system allows light owners to capitalize on their investment in LEDs by running a range of software applications to deliver multi-service capabilities at each luminaire.

        Through innovative engineering and networking technology, Sensity Systems has transformed light infrastructure into a platform that provides both lighting-specific and non-lighting-related services. Such services can include comprehensive lighting management, asset management, application-specific environment sensing, audio sensing for public safety and security, and parking management, among many others.

        NetSense is a cloud-based platform open for integration with third-party sensors and capable of delivering data to a variety of applications. A number of applications and services have already been developed under the denomination of SensApps. They include security, lighting control and management, power monitoring, network monitoring, and retail analytics.



Rethinking LED Lighting Systems

        Potential applications for LED sensor networks are virtually infinite. From municipalities to warehouses, campuses, and commercial real state, these innovative systems can be adapted to become powerful sources of data in virtually any environment. The following paragraphs present recent promising fields for LED sensor network R&D.


Municipalities
: streetlights can represent up to one-third of a municipality's electrical utility costs. Add to that maintenance costs and it is not hard to see why the use of low-energy LED lighting is becoming more widespread among local governments. A number of efforts are currently underway to help municipalities take the most advantage from LED lighting infrastructure.

        Michigan based Illuminating Concepts has developed Intellistreets, a flexible wireless solution for integrating energy efficient lighting, audio, and digital signage. The Las Vegas Public Works Department has recently begun testing the system. A new LED setup surrounding City Hall is equipped with a sound announcement system, emergency notification flashers, and environmental sensor inputs, all operated over a wireless network linked to a central server.

        LED sensor systems can also be installed in locations such as tunnels, bridges, and roadways. Libelium, a wireless sensor network hardware provider, has developed a smart lighting solution that measures luminosity, humidity, and temperature inside tunnels. The Mapo Bridge in Seoul, South Korea, was equipped with an innovative sensor and LED-based system to prevent suicides. When the sensors detect a person coming near, LED lights flash messages of hope. According to Cheil Worldwide and Samsung Life Insurance, suicide rates have dropped by 77 percent.

        Over four years ago, Los Angeles began a major conversion to LED street lighting. Aiming at even greater efficiency, L.A.'s Bureau of Street Lighting has worked with General Electric to create a sensor-based remote control system that would enable the collection and analysis of illumination data. This innovative system would involve every roadway fixture and would allow for more informed decisions regarding lighting control.

        Headquartered in Silicon Valley, Echelon Corporation created a Smart Street Lighting Solution that transforms streetlights into intelligent, energy-efficient, remotely managed networks. The system offers an expandable infrastructure capable of supporting various applications, such as traffic, weather, and motion monitoring. Already present in five hundred cities, Echelon's network has enabled innovative solutions: in Quebec it integrated a bus lane control system, enhancing efficiency and eliminating costs with additional infrastructure.

        Integrating telecommunication networks to LED streetlight infrastructures can also be of great benefit to municipalities. Not only would it allow for reductions in electricity costs, but it would also help eliminate unsightly cell towers that obstruct the views of cities and landscapes. French telecomm giant Alcatel-Lucent and New Jersey's Bell Labs developed the lightRadio Cube, a cellular antenna about the size of a Rubik's cube. Single cubes or clusters of them could easily be placed on lampposts, making conventional cell towers obsolete. Using Alcatel-Lucent's cube, the V-Pole project envisions the installation of smart streetlights in Vancouver. The innovative infrastructure would combine LED lighting, Wi-Fi and cellphone services, as well as the ability to charge electric cars.

        The multitude of potential benefits from LED sensor networks is undeniable, particularly for municipalities. Financial constraints should not prevent local governments from stepping into the future of smart LED streetlights. Public-Private Partnerships constitute a promising alternative for those wiling to undertake LED sensor network projects.


Greenhouses: In the face of a growing demand for more sophisticated and efficient greenhouse solutions, Swedish company Heliospectra, developed a unique LED lighting system that optimizes the growth of individual plant families. It includes a biofeedback system, intelligent LED-based lights, sensors, and software.

        Through reflected light and fluorescence, sensors are able to gather information that helps optimize light spectrum configurations. The results include the encouragement of desired plant characteristics along with energy savings, since only the necessary light is produced. Moreover, Heliospectra's systems work in a cloud-based model that gathers information from various growers and refines predictive algorithms for constant improvement.


Chicken Growing Facilities: Chicken growers are energy-intensive facilities that can profit from replacing incandescent technology with LED lighting. According to a University of Arkansas field study, in addition to reducing electricity costs, LED technology supports optimum yield performance while remaining harmless to the growing cycle.

        Lighting plays an important role in poultry production and bird performance. LED sensor networks can contribute to greater efficiency in a number of ways. Timing sensors, for instance, can gradually turn light intensity up and down to simulate the sun. Similarly, photo-sensing devices can alter light intensity according to the level of natural light available. In addition, constant temperature and humidity measuring provided by LED sensor systems can be a source of valuable information. Motion sensors can also help in scaring away predators.

        Atlanta-based sensor startup Lumense is working on a system that measures levels of ammonia in poultry houses. Air quality is critical to the birds' ability to respond to respiratory diseases and meet their genetic growth potential. Controlling ammonia levels in chicken growing facilities is key to prevent illnesses and weight loss. LED lighting infrastructure equipped with ammonia-detecting sensors could enable highly efficient air quality monitoring.


Airplanes: On one hand, LED lighting presents numerous advantages over conventional aircraft lighting technologies. These include longer lifespans, higher efficiency, greater shock and vibration resistance, lower weight, lower drag, and higher color temperature white. On the other hand, wireless sensor networks can also bring various benefits to aircraft performance and reliability, such as weight reduction, ease of maintenance, and enhanced monitoring capabilities.

        Future R&D efforts may combine both technologies as a means to transform LED lighting into strategic assets for a range of airplane functionalities, including engine control, aircraft flight control, and aircraft engine and structural health monitoring systems.


Hospitals: LED lighting can be of great advantage for hospitals, where lights operate 24/7. Besides the reduction in energy and maintenance costs, LEDs can contribute to the quality of care itself. Examples of advantages are multiple: 1) The higher lumen output of LEDs helps reduce errors made by medical practitioners, 2) LED lighting has been used as a healing agent to help ameliorate the side-effects of chemotherapy and improve infant skin diseases, 3) dimmable LED bulbs and tubes can contribute to improved examination and patient comfort in CT and ultrasound rooms.

        Embedding LED lighting infrastructure with wireless sensor networks can bring great benefit to hospitals and healthcare facilities. Not only can such systems enhance safety but they can also improve monitoring, particularly due to application-specific environment sensing, such as temperature and humidity measuring.

        Conceivable future developments include LED sensor networks capable of detecting pathogens and infectious agents in the air.


Campuses: LED sensor networks can also contribute to smarter schools and universities. Security, for instance, can be greatly improved through the ability of monitoring the movement of people, vehicles, and other activities. Parking management, lighting control and management, power monitoring and energy efficiency management, along with retail management are also examples of potential applications.

        At the University of California, Davis, a sensor system has enabled the creation of a "just in time" bright path. Lights are designed to brighten as bicyclists approach and dim once they have passed. This is possible through a communication system where each node alerts another and another down the line, progressively illuminating the rider's way.


Smart Buildings: Office buildings, manufacturing facilities, warehouses, and distribution centers can also be made "smarter" with the use of LED sensor networks.

        Headquartered in Sunnyvale, CA, Enlighted works with smart sensors that can be installed into new or existing LED fixtures. Enlighted Energy Manager uses real-time data generated by such sensors to adapt lighting levels, resulting in major savings of energy. Moreover, the system constitutes a flexible data grid, extensible to control other applications, including: HVAC system control, cloud-based occupancy data applications (space planning, conference room scheduling, warehouse stock optimization maps, traffic visualization, etc.), security applications, and asset management.

        Osram Sylvania is currently working on a lighting control system to improve office productivity. The idea is to use sensors to optimize illumination for specific tasks - if a person sits at a desk to use the computer, for instance, overhead light would dim to increase the contrast with the screen and allow for better visualization.


Parking Garages: LED sensor networks can provide real-time parking data to control and facilitate the parking of vehicles. This can be of interest to managers of parking lots and garages as well as to costumers looking for available parking spots.

        Data generated through LED sensor networks could be sold to app developers envisioning, for instance, a mobile device application that helps finding parking. Moreover, the system can be integrated to the automatic payment of parking fees, simplifying parking management.

        Sensors can also be used to monitor the level of CO2 in parking garages, becoming a powerful tool in assuring air quality.



Let There Be Data

        Ongoing R&D efforts promise to build a definitive link between efficient LED lighting and data generation. LED sensor networks already support a wide range of applications and a myriad of future uses can be envisioned. Companies engaged in LED sensor network R&D as well as those working on related applications and predictive analytics software may be entitled to significant federal R&D tax credits.

Article Citation List