The Economics of Batteryless Sensors

In the early years of IoT, there was a lot of anticipation and hype about how big this new technology was going to get in just a few years - predictions made just a few years ago  were often ludicrous. There were a lot of mentions of a “trillion sensor world” in just a few years. There was one major problem however with these predictions though - the Internet of Things was not quite able to launch into explosive growth, as expected. 

As of 2023, we are still nowhere close to a trillion sensors. 

What was the problem?

The biggest hurdle was that IoT technology was not able to find a power solution that could keep pace with the exponential growth that was happening with processing power. 

Microelectronics technology was on a rampage - packing more and more computing power into the tiniest amounts of real estate - but battery technology simply couldn’t keep up - While processing power was increasing at an exponential rate, improvements in power capacity were significantly slower - processing power typically doubles once every 2 years whereas it takes a whopping 10 years for battery capacity to double.

In the early years of IoT technology, this mismatch proved to be quite a significant setback - wireless sensors were getting faster, more robust and cheaper. Internet connectivity was improving by leaps and bounds, both in terms of coverage and reliability. Auxiliary technologies like AI, ML etc were cropping up seemingly everywhere and probably much more importantly, the true scope of this technology’s immense potential was really not lost - there was enough awareness about the technology and the various possibilities that it could open up. But, in spite of all these variables stacked up in its favour, IoT technology couldn’t quite take off as spectacularly as it was expected to. 

The battery problem held the growth of IoT back for many years - batteries came with a number of problems - the biggest one of them being the terrible humanitarian and environmental consequences of using them including human rights violations, child abuse, water pollution and toxic waste. 

But the problem wasn’t just that - after all, environmental concerns accompany nearly every industry - our automobiles, even the battery-powered ones, are super resource-intensive and environmentally unsustainable - that doesn’t seem to stop us. 

So, what’s the problem then with IoT sensors? 

It’s not so much the environmental angle as it is a matter of economic unsustainability that delayed the meteoric rise that IoT was predicted to make. 

The problem with battery-powered IoT

Why is IoT so revolutionary in the first place?

It’s because of the sheer scale and complexity of information exchange that it enables. Let’s compare them with traditional computers such as PCs and laptops - A computer is nothing but a  data-processing device. It’s a device that enables various kinds of information to be processed quickly and efficiently.

The internet is a network of computers - an interconnected network of data-processing devices that act as nodes that communicate with one another enabling a large, distributed network that is capable of exchanging data at rapid speeds, enabling a wider range of information exchange and access. 

The internet of things was conceived from the question why confine internet access to traditional computing devices? Why not democratise internet access and connect all kinds of objects to the internet?

That is IoT technology in a nutshell - Wireless sensors and microcontrollers play the role of nodes. Every node in the network plays the role of minimalistic computer, gathering data and transmitting it throughout the network. Overall, this rich treasure trove of information is then processed to identify useful patterns that are then used to actuate desirable interventions directed towards increased efficiency and productivity. 

So, the main advantage that IoT brings to the table is scale. After all, you can’t install a desktop computer in a hundred different locations across a large potato farm - that’s where IoT sensors come in. Wireless sensors allow for large numbers of nodes to be deployed over a large operation area. This element is crucial to the IoT enterprise. 

Now, if we are to deploy hundreds or even thousands of wireless sensors, possibly in remote and unreachable locations, then, the idea of these sensors being battery-powered is simply untenable. Billions and billions of everyday objects around us have to be hooked onto the internet using wireless sensors if the IoT is to realise its potential and help us create a world of connected things.

If billions and billions of wireless sensors are to be powered by batteries, that would represent a nightmare both in economic and ecological terms. The environmental aspect is quite obvious - modern batteries require rare minerals like Lithium and Cobalt which cause untold ecological devastation when mined in large quantities. That’s not all - batteries run out and when they do, they need to be disposed of - which presents another nightmare of a challenge. 

When billions of battery-powered sensors are accounted for, this solution is simply not a solution at all. 

The picture is not that different when seen from the economics point of view. When it comes to battery-powered sensors, the incentives simply don’t line up - if an enterprise is to invest a sizeable sum of money upfront in fitting their operation with a new technology, they simply won’t do so unless they are compelled by potential savings that the upgrade will bring them - i.e they will want a return on their investment. A return that exceeds the amount invested over the long term and brings them more gains, either in terms of increased efficiency and productivity or through direct cost-savings. 

With battery-powered sensors, this incentive is simply not there for the business. The value proposition of battery-powered sensors looks something like this - invest huge amounts of money upfront and then haemorrhage money throughout the lifecycle of the network by forking out money for battery replacements and periodic maintenance. 

You can see why this proposition doesn’t make a whole lot of economic sense if you are a business owner. The business is simply not being incentivised to move away from its set ways and invest in this new technology. And any sound economist will tell you that no change in behaviour is possible without the right kind of incentives - for individuals or for organisations. 

Initial work was directed at developing better batteries and ultra-low-power microcontrollers. These did push the ball forward but were far from being elegant solutions. After all, no matter how long a battery lasts, it is always going to need replacement at some point, which translates to a recurring expense. Moreover, with an increasing number of people becoming acutely aware of the global ecological crisis, this solution was not really seen as anything more than an interim step in the process of finding a more long-term solution. 

Enter batteryless sensors

The advent of Self-powered sensors or batteryless sensors represented a notable landmark in the history of IoT technology. 

With IoT technology growing rapidly and featuring prominently in nearly every aspect of human endeavour, it was imperative that we found a way to free IoT technology from the tyranny of the battery. 

To this end, a number of alternatives were explored until energy harvesting technology emerged as a clear winner. Over the last few years, batteryless IoT sensors powered by various kinds of energy harvesting technologies have emerged as clear winners in this race. 

Batteryless sensors are able to harness the energy required for their operation from their environments, completely eliminating the need for an external power source. They are able to extract tiny amounts of energy from stray electromagnetic waves, sunlight, vibrations and thermal gradients. 

If that doesn’t simply sound astounding and otherworldly, look again - the idea of sensors that literally powered themselves out of thin air would have sounded nothing short of ridiculous just a few years ago. Today however, energy harvesting powered nodes are very much a reality and they are increasingly featured in many mass-market IoT devices. 

Clear Incentives

Economists see all human decision making as a function of responding to incentives. In economic terms, all human decisions are made in a bid to maximise gain and minimise loss.

As we mentioned earlier, battery-powered sensors were just not able to offer businesses the right kind of incentives. However, with batteryless sensors, the equation looks very different. 

With batteryless microcontrollers and sensors, the BOM (bill of materials) is much smaller. It is estimated that typically, businesses could save anything from 40% to 80% on their total BOM cost, when they opt for a batteryless microcontroller. 

Not just that. 

With batteryless microcontrollers, the savings are not just in terms of the BOM cost. Over the life cycle of the product, there are other substantial gains. Battery costs are obviously saved but it’s not just that either - over the life cycle of an IoT setup, businesses will have to plan for recurring maintenance costs and battery-replacement costs. Moreover, battery-based solutions are more likely to result in unexpected downtimes which are also potentially costly. 

Batteryless IoT solutions eliminate all these costs in one fell swoop. They require practically no maintenance and because of fewer moving parts, unexpected failures are much less likelier. 

Economic Impact of IoT

The internet of things has had an indelible impact on the global economy. No field of enterprise will ever be the same now, following the massive explosion in IoT adoption. IoT-enabled connected technology has dramatically altered the global business landscape and that is not an overstatement by any means. 

Connected technology has changed the way we do literally everything, from raising cattle to managing factories and everything in between. 

A recent study tried to establish the relationship between IoT technology and economic growth in objective, data-driven terms. 

The results showed that a 10% rise in M2M connections (used as a proxy for total IoT investment) typically leads to yearly GDP increases of about 0.7%. To put that number in perspective, let’s take the United States of America and Germany as examples. Both these countries are veritable economic powerhouses and are extremely major players on the global level. A 10% increase in IoT investment in these countries, would, according to this trend, result in a net GDP gain of about $2.2 trillion in America’s case and $370 billion in Germany’s case. These are truly staggering numbers and go a long way towards highlighting why IoT technology draws the hype that it does. 

These numbers are just to offer an insight into the mind boggling economic promise of IoT technology - they do not even take into account the various knock-on effects that IoT technology has on the economy - such as increased productivity, improved connectivity, better quality control etc. 

The hardest thing to quantify will be the slew of previously unimagined economic opportunities that IoT technology will enable in the future. 

What IoT technology can do is crunch large amounts of data and identify patterns that we simply didn’t know existed. Sensors allow us to collect, synthesise and make sense of vast quantities of information, uncovering new breakthroughs in the process. As more and more objects become connected to the internet and start interacting with one another, an entire universe of opportunities will open up. 

There is simply no way we can put a dollar value on the sort of innovation that this level of interconnectedness will bring. 

Developing Economies

The economic impact of IoT technology is expected to be especially significant In countries where resources and opportunities are scarce. 

Connected technology can drive socioeconomic growth right from the grassroots level in developing economies, making it more of a fair fight when they compete with developed countries in the global arena. 

More importantly, connected technology can help with efficient resource allocation and management, increasing quality of life in the process. This has an indirect effect on the economy of these countries - after all, when more people are able to access the basic resources needed to sustain life, it translates into a more robust marketplace, over a period of time. 

For instance, Portland State University is currently involved in a project called SWEETlab which is developing a number of projects aimed at improving living conditions in emerging economies using IoT technology. 

One of the projects that the lab has taken up is the setting up of smart farms in Vietnam, where IoT-driven connected technology is being used to drive higher production efficiency and mitigate risk of crop failure due to pest infestations and erratic weather patterns. Wireless sensors are being used on these farms to monitor moisture levels and adjust irrigation accordingly. Additionally, various kinds of sensors are being used to track parameters such as temperature, humidity, nutrient levels etc. 

This is just one example of how connected technology translates to significant economic advantages in covert ways. Similar technologies are being deployed in other resource-poor settings - SWEETlab monitors have notably already been used in cooking stoves, water pumps and filters, in a number of countries such as India, Indonesia and Kenya. 

Path to The Future

Researchers estimate that as of today, there are over 50 billion smart, connected objects in the world. While this is indeed quite a way off from the trillion mark, that is still a heckuva lot of IoT sensors. 

And if the National Science Foundation is to be believed, we are not too far off from the 1 trillion mark either. 

All kinds of things around us are connected to the internet today thanks to IoT technology. We are generating incredible amounts of data and this is radically transforming the basic shape and texture of our economy. 

Without doubt, we are entering the era of the digital economy - In many ways this is simply a different paradigm. a different way of organising our economic structures - something that is going to challenge us in a number of very fundamental ways. This digital economy is going to be a sensor-based economy. Wireless sensors are going to be the platform on which an entire gamut of future opportunities is going to be raised. 

Healthcare, construction, consumer electronics, agriculture, manufacturing, transportation - you name it - every sector is going to feel the pressure to transition quickly to this new sensor-driven paradigm. Real-time analytics and AI in all likelihood, are going to play huge roles in this new economic paradigm. 

Exciting stuff indeed. But only time will tell what the future holds for us.