How Much Does It Cost to Develop a Smart Lighting Solution?

Today more and more businesses are getting interested in developing and installing a smart lighting system, be it part of a smart city, smart factory or smart home project. However, a majority of entrepreneurs have a vague idea about the price of the solution. Here we will try to give you an idea about the costs incurred by smart lighting system development, given our experience in this sphere.

Smart Lighting: Designing a Basic System Architecture

Smart lighting is applied in different domains, ranging from IoT home automation to smart city lighting systems, but its architecture remains the same in its essence. Its infrastructure presents not just a network of smart LED bulbs connected to a central hub, but has multiple performance layers:
  • Sensor networks are installed to capture data from LEDs.
  • Once data is captured, it is transmitted over various wired and / or wireless communication protocols via a local controller gateway to the cloud-connected back-end.
  • When in the cloud, the data is processed and analyzed.
  • Put in actionable format, data is displayed in a mobile app or web dashboard, used for controlling the smart lighting system.
A typical smart lighting system architecture includes some key components, performing at different layers

Development Process: Cost Breakdown of Each Part


In a smart lighting ecosystem, this part contains several essential elements, sometimes enhanced by additional components:
  • Light source. Smart bulbs use light-emitting diodes (LEDs) which serve much longer and are way more efficient than incandescent bulbs, and are taking a growing share of the market. They come in different forms and shapes, can be white or color changing ones, and get connected with the other elements from the smart lighting system.
  • Sensors. In order to automate lighting behavior, bulbs are equipped with sensors which make them truly ‘smart’.
Types of sensors used for adding functions to the bulbs can be different, to name a few:
  • Red-Green-Blue (RGB) color sensor. This basic sensor tells incoming colors apart into its red, green and blue components.
  • Photocell sensor. This daylighting sensor detects light, measures changes in it and controls its connected lighting loads according to the user’s programming. It is able to decipher minor changes in light levels (passing cloud cover, intermittent shadowing, etc.) to prevent unwanted or inadvertent light cycling.
  • Digital temperature sensor. The sensor provides for temperature measurement through an electrical signal.
  • PIR occupancy sensor. The Passive Infrared Sensor allows to sense motion, detecting whether a human has moved in or out of the sensors range. This allows to cut down on energy costs in little-used areas of the sensor-equipped building.
  • Microspectrometer, which detects wavelengths (i.e. colors) and their intensities.
Smart lighting sensors come equipped with dimming drivers. Dimming allows to use less power when receiving the necessary result.
With LEDs, using dimmers cuts down on energy at a 1:1 ratio, i.e. dimming at 25% means using 25% less energy.
  • Smart switch (or smart relay). This part allows for adjusting smart lighting to the needs of its user, as it allows not only for turning the lights on and off, but for dimming them to a particular level, programming to turn switch on at a pre-defined moment or customizing the color of the LED.
  • Local controller. This gateway allows smart bulbs to react in real-time, converting digital commands into physical action as close to the device as possible. Without this element, the system would rely solely on the cloud in its work, which can lead to dissatisfying results, regarding possible connectivity problems and implied latency. Yes, in smart lighting the amount of data produced by sensors is extremely small; however, once the Internet connection gets off, the system stops functioning. In a home automation project it can be irritating; at a smart factory level it can become disastrous. So the local controller is developed to send commands directly to the connected devices and control their work in real time.

Hardware Development: Hidden Costs

Developing smart lighting hardware components, one should consider additional costs associated with this part of the project.
  • Firmware Product Design
When preparing a product for its launch on the market, project owners should consider working on the casing part, i.e. the size and look of a hardware element, with detailed tech characteristics, featuring the functionality and lighting scenarios needed for this particular solution. Another point to consider is choosing the right materials. For example, in a smart lighting system case, these materials shouldn’t block the emitting signal.
  • Certification in Each State
Often disregarded by startups, this can become one of the biggest costs in the whole project, starting from $10,000 per certificate. Of course, regulatory requirements differ depending on the end country of use and distribution. However, requirements set for smart lighting products belong to one of the following categories:
  • Product testing. Such tests prove that a product can be safely used in living areas and other human-inhabited environments.
  • Performance testing. Usually this certification includes a number of tests, such as: electrical testing (temperature measurement, transient protection, photobiological safety testing); mechanical testing (vibration, mechanical shock, etc.); environmental testing; photometry testing.
  • Electromagnetic compatibility (EMC). This testing verifies the product’s ability to integrate into an electrical network.
  • Radio module testing. The necessity of this type of testing greatly depends on the target market, as some countries (for example, USA and Canada) accept module approvals and don’t require additional testing if a module has been previously approved.

Hardware Cost Breakdown

Despite the fact that the price for hardware components has been significantly dropping over the last years (only the sensor costs have dropped from $1.30 in 2004 to $0.60 in 2014 and are expected to drop to $0.38 by 2020), still this element remains one of the important factors in estimating the final price of the project. According to Pavel Shylenok, CTO at R-Style Lab, “The development of each hardware component for further industrial production – not just an MVP model – will cost $100K – 150K approximately”.
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The key elements providing the smart lighting system’s functionality, are the following:
  • Connectivity
This is an essential problem to solve for a solution tagged with the word “smart”. Choosing a connectivity protocol depends on many factors: power consumption, required range, acceptable latency, to name a few. Connectivity protocols most commonly used for smart lighting systems, are typically divided into wired and wireless ones. While wired protocols offer more stable performance and greater control (coming at a higher installation price), wireless protocols are cheaper and more effective for scalable options. Connectivity protocols used in a smart lighting architecture can be different, depending on the project tasks and the environment where it will be located.
Standardization in the communication protocols has been a serious problem for engineers working in the lighting industry, as well as in any other industry associated with IoT technologies. However, many specialists expect that wired protocols will be losing their positions on the market, while wireless protocols, getting more mature, will be getting the biggest share of the market.
  • Cloud-hosted Infrastructure
The back-end part of each smart lighting system allows to manage connected devices, aggregate data from multiple end nodes, process big data storage and analytics, and provide access to the collected data 24/7/365. Cloud-hosted databases remain a preferred solution for the back-end development, where data is stored, analyzed and used for taking further steps and sending response back to the controller. And if storing the incoming information is a primitive task with no special mechanisms needed, for doing proper analytics and processing huge volumes of data the cloud needs to be trained with machine learning algorithms.

Infrastructure Cost Breakdown

The back-end part of the smart lighting solution will consume no less than 2,000 hours of the development team work, and its price will be starting at $60,000. The final estimate will be influenced by such factors as:
  • Elasticity, i.e. how effectively the cloud can scale up to a growing number of smart lighting devices interconnected within the system, and the volume of messages transferred;
  • Security requirements, which are often influenced by the location of the smart lighting system (a higher security level will be required right from the start for a smart factory or smart city lighting than for a home automation project);
  • Integration with other systems and services, as it influences the complexity of the system.


iOS and Android apps, as well as dashboards, facilitate human and machine interactions and give control over the system to end users. With the app, end users indicate how they want the lighting ambiance to appear in different zones and at different points throughout the day.  
Apart from a well thought-out UI design, an app should be capable of:
  • Controlling lighting devices in the network, their monitoring and pre-configuration;
  • Executing both local-based control for on-premises access and remote control & monitoring for off-premises access;
  • Providing secure user registration and log-in.
Besides, an app should be scalable enough to accommodate changes for further lighting system’s development without compromising software functionality, and allow for integration with a third party device cloud, developer support and direct network connections. These factors also influence the cost of the app development.

Application Cost Breakdown

A single-platform mobile application compliant with UI and UX standards costs around $30,000. If a customer wants a cross platform solution featuring both Android and iOS app development, the price gets doubled. The web dashboard front-end development featuring the same functionality, will come at approximately the same price, starting from $30,000.

In Total: Figuring Out the Final Cost of a Smart Lighting Project

A fully functional smart lighting solution will include 3 smart switches minimum (a 2-channel switch, a dimmer and an RGB smart controller), 1 lighting sensor per 1 lighting bulb, and 1 local controller. This part’s development will start at $300,000.   With the costs of the cloud-based back-end development, and work on responsive mobile apps and web dashboard, the development of a fully fledged solution, ready for industrial production (not simply an MVP), will come at a price of around $1 million.  
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