Exploring Cost and Environmental Implications of Optimal Technology Management Strategies in the Street Lighting Industry

Abstract

The market for solid-state lighting (SSL) systems has expanded 40-fold in installed lamps since 2001. At the same time, systems which preserve materials over time and promote material reuse are getting increasing attention in light of calls for reducing consumption of natural resources. As new lighting technology products are designed and brought to market, consideration must be given to how products will be managed throughout the life-cycle as well as their end-of-life (EOL) fate. Lighting-as-a-service (LaaS) business models have emerged as a potential strategy for preserving the materials embedded in lighting products. In this paper, we examine the cost and environmental implications of technology management decisions in the context of the street lighting industry, employing life-cycle assessment and a Markov Decision Process model. The goal of the research is to determine a policy that minimizes expected costs and emissions for the system over a fixed time horizon thus reducing uncertainty for managers. The model used in the paper evaluates the optimal replacement strategies for street lighting products and additionally connects the result to the optimal EOL product trajectory, taking both costs and carbon emissions into account. In doing so, we are able to more deeply understand the role that LaaS business models might play in enabling closed-loop systems within the street lighting industry.