Making brighter cities

Streetlight tariffs: the light at the end of the tunnel

Will Gibson on 13 April 2021
Picture of Will Gibson

With suitable utility tariffs those organisations doing the right thing by adopting greener streetlight technologies would be rewarded with lower energy bills.

In common with just about every other type of lighting that is changing to LED, streetlights around the world are being converted to this highly durable and energy-efficient lighting technology. But that’s not the only innovation which is transforming the world of lighting. The other change coming down the tracks is connectivity.

In the home, wireless connectivity enables householders to control their lights via an app, for example to turn lights on and off remotely or to set colour and mood. Wireless connectivity offers similar benefits in the realm of streetlighting. Once connected, streetlights can be fine-tuned, such as for brightness and timings, and their performance checked remotely.

While the householder may adjust his or her house lights remotely using finger strokes on an app, the street light operator is able to manage hundreds of thousands of lights at the click of a mouse.

To connect streetlights, a wireless controller is fitted onto each light. This communicates bi-directionally with a management application accessed via a desktop or tablet. As well as controlling the light and monitoring its performance and status, the wireless controller has another important role, that of measuring energy consumption.


Making use of these capabilities, smart streetlighting systems can reduce the amount of energy streetlights consume by as much as 25%, on top of the 50% already saved in moving the lights themselves to LED. For organisations to get the full benefit of their smart outdoor lighting system any reduction in electricity consumption needs to be translated into actual financial savings in the form of lower electricity bills. This requires two things. Firstly, that it’s possible to measure how much energy is being consumed and secondly, that this consumption figure flows through to a usage-based bill.

Generally, we all pay our utility bills with some understanding of the amount of the utility we have used. A price per unit may be set and our bill raised against the amount we have consumed. Or there may be a fixed tariff for a given amount of consumption. We would typically be shown our actual usage and left to adapt our tariff to something more in line with our consumption if we feel we are being overcharged. Ultimately, we want to pay for what we use.

Electricity bills for street lighting should work to similar principles, paying for what is used. That’s especially important if organisations which choose to adopt this greener technology are to be fully rewarded for using less energy. But it’s here that the business case might derail.

Until recently streetlight energy consumption has been easy to assess for billing: streetlights had assumed fixed wattages, they came on between dusk and dawn, we’ve known how many there are of each different type and therefore we could derive an aggregate consumption for the whole population of lights. Multiply by the relevant utility’s rate per kilowatt hour and that provides the amount to pay.

Until now, there has been no real need to be any more sophisticated than this; the estimated or ‘unmetered’ approach was just fine. But the arrival of smart street lighting made it possible to adapt light levels as part of a flexible lighting policy, such as doing some night-time dimming. As a result, an ‘estimated' energy consumption figure to form the basis of a bill could no longer be considered reliable. So this is saying that ‘metered’, “time of use” (TOU) tariffs, are now needed in common with most other electricity supplies.


The good news is that connected street lighting systems can now capture the amount and timing of consumption: the devices installed on lights typically have a “meter chip” component, measuring the consumption to the same accuracy as a regular electricity meter. The not so good news is that in many regions of the world, the electricity industry administrators are slow in coming up with regulatory structures and suitable tariffs to accommodate these systems.

One country that has an appropriate regulatory regime for this new technology, and has results to show for it, is the UK. A decade ago, investment in renewing UK street lighting was in full swing, and the electricity regulator saw the potential in this new form of street lighting operation. A method was introduced in which the switching times and power levels of lights, as captured by the new systems, could be used as the basis to assess, and bill, the electricity consumed. Whilst only perhaps halfway to full metering, this “pseudo metering” approach correlated how much was consumed and when it was consumed with the amount charged. As streetlight managers started to use their new LEDS and smart controls to reduce dramatically the amount of electricity used, they were also able to take advantage of the new measurement and billing method to see their reductions translate into much lower bills.

Fast forward to today and street lighting in the UK is amongst the most advanced in the world. 55% of the 7.2m streetlights in the UK are LED, 29% are connected, or ‘smart’ and overall, they consume 28% less electricity today than they did in 2010*. Back in 2010 street lighting consumed over one percent of the total UK electricity load. Taking that down by about a third, implies a reduction in CO2 emissions associated with electricity use, of about one third of one percent of UK electricity overall. Whilst not huge, this is nevertheless a meaningful contributor to climate change net zero ambitions. The extent of the success so far, and its expected extrapolation, is largely attributable to the regulatory framework that accommodated the new technology.


In some ways the UK is relatively simple. There is just one national regulator, one single energy settlements body and the 7.2m lights are all owned and operated by the two hundred or so local government authorities. In contrast, the streetlight eco-system in other regions of the world is much more complex and fragmented.

In the United States, for example, streetlights are owned either by an investor-owned electric utility, a municipal utility (or co-op), or streetlight ownership sits with the municipality and city. Overseeing all this sits a state-level regulator called a Public Utilities Commission (“PUC”), which ensures fairness between the utility (often a monopoly provider), and its customers. One of a PUC’s key tasks is to approve suitable electricity tariffs. There are many different types of tariffs for streetlights already which consider who owns the streetlight and the type of light (new or old technology) being used. Most of these tariffs are effectively fixed - charging an amount per light, by type, per month.

Most power companies are yet to introduce suitable tariffs which reflect the way smart streetlights can be managed proactively for improved energy consumption. Of the one hundred or so investor-owned utilities only about ten have a “metered streetlight” tariff, in which the consumption may be measured by a conventional electricity meter. (Even these ‘metered streetlight’ tariffs are really intended for situations where a string of lights on a circuit terminates in a street-side switching cabinet - where the meter would be.) There are thought to be only about five… ‘metered streetlight’ tariffs, ratified by the relevant PUC, that can take consumption data directly from the metering chips in the controllers on individual streetlights. As an additional requirement, these tariffs also carry the proviso that the controllers and smart streetlighting system must have been evaluated and approved by the utility.

Big utilities, and their tariffs, have been left behind by the capabilities of connected streetlight systems. That’s partly due to structural reasons. The regulatory cycle for a utility to submit a rate cases to its PUC is typically three to five years, so these things simply don’t get considered or changed that often. It’s also down to motivation. Whilst most utilities now have LED tariffs and many are pursuing carbon reduction agendas, further advances that significantly reduce the amount of electricity streetlights consume, are not intuitively in their interests. PUCs have a clear role here to support end user cities and municipalities by giving access to tariffs where they pay for what they use. PUCs should be more proactive in pressing the power companies to introduce so called “adaptive lighting” tariffs.


Regulators in other jurisdictions are recognising that they need to address rules around street lighting electricity. In Australia, a consultation commissioned by the Commonwealth Government’s Department of the Environment and Energy (DEE) explores the need for a new ”Small Load” metering approach tailored to small, dynamic electrical loads in the public domain - such as street lighting, as well as other emerging smart city devices. The consultation has been prepared with input from the Australian Energy Markets Operator (AEMO) and the National Measurement Institute (NMI). Similarly in Brazil, the street lighting industry association ABCIP (Associação Brasileira das Concessionárias Privadas de Iluminação Pública) is working with the government’s standards and metrology regulator, Inmetro, to determine a pragmatic approach to energy measurement and settlement for street lighting. In New Zealand, adoption of smart street lighting of 48%ǂ is already probably the highest of anywhere in the world. This is partly supported by central government subsidising 85% of costs. It is also supported by the Electricity Authority, in their July 2018 paper “Electricity market settlement for LED streetlights” laying out an approach for using smart street lighting systems’ data as input for billing.


Despite some challenges around electricity tariffs, there is, nevertheless, steady growth in the roll out of smart streetlighting technology. Not least because, even with the potential monetary value associated with energy savings put to one side, the opportunity for far easier and more cost-effective management and maintenance makes smart street lighting difficult to ignore. In the US, cities such as Los Angeles, San Diego and Cleveland, have already adopted connected streetlight systems. Others, such as Kansas City, Washington DC, San Jose and Philadelphia are in the process of procuring smart technology to control their LED upgrades. We can see that smart street lighting deployments are well underway. With suitable utility tariffs thrown into the mix, those organisations doing the right thing by adopting greener streetlight technologies would be rewarded with lower energy bills. The train is leaving the station and streetlight operators need to get on board.

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* Source: “State of the Nation – 2020 Streetlight Survey” by the UK Roads Liaison Group and CIHT (Chartered Institution of Highways & Transportation)

… PECO in Pennsylvania, Georgia Power, Eversource (NStar) in Massachusetts, San Diego Gas & Electric, National Grid


ǂ source: “Northeast Group: Global Smart Street Lighting & Smart Cities:

Market Forecast (2020 – 2029)” November 2020


Topics: Streetlights, Smart cities, smart streetlights