LIT Entrepreneurs

Business Environment

First Stop: London

“Europe Strategy 2020” aims to cut CO2 emissions by 20% before 2020. In the UK, city councils are requested to implement measures that will reduce their carbon emissions. At the moment, 85% of the city councils dim or turn off the streetlights to save electricity costs and reduce their carbon foot print.

We envision a future where LIT bulbs will replace all streetlamps throughout the municipalities of the U.K. This would, among other things, mean there would be no need for cities to have to dim or turn off their street lights in order to comply with ultimatums to become greener and reduce their carbon emissions. Similarly, our LIT bulbs offer an innovative, low-cost and low-emission solution for combatting the high energy costs governments and municipalities incur annually to light up their streets. Our long-term future thinking includes making LIT bulbs that can be used for lighting billboards, gardens and outdoor venues.

Financial Data

Material required Cost (£)
Pump (15 L/hr) 2.00
Three-way valve (Diameter 0.015 m) 0.90
Plexiglas (Diameter: 0.04 m; Length: 0.94m) 6.00
Filter (0.015 cm pore size with a ±50% safety margin) 0.90
E.coli cells 0.10
Cyanobacteria cells 0.10
Media Requirements for the cell cultures 4.05
Total price per LIT bulb 23.90

Table 1: Illustrates the basic variable costs to produce one LIT bulb

Once we priced the materials needed to build a single LIT bulb we assumed a 100% price mark-up (above the cost of goods) would be introduced, which is the norm of bringing a product to market. As such we estimated the LIT bulb market price to be £47. Being that the selling price for LED lightbulbs is £50, we were excited to see that our product’s price was relevant and competitive. Additional research into alternative materials would arguably result in a decreased cost of goods. Moreover, when materials are bought in bulk we would expect vendors to provide discounts.

Approach 1: Government expenditure to implement the LIT bulb technology

Assuming the municipalities have the capital available to make such an investment, and assuming that our product was Generally Recognised Safe Product (GRAS), we envision the plan for capital outlay to be as follows

Year 1 2 3 4 5 6 7 8
% of Investment in Year 50% 25% 25% 0% 0% 0% 0% 0%
Capital Investment (£000s) £22,208 £11,104 £11,104 £0 £0 £0 £0 £0
Number of LIT bulbs acquired 450,000 225,000 225,000 0 0 0 0 0
Maintenance costs (£000s) £0 £239 £358 £505 £505 £505 £505 £505
Total Annual costs (£000s) £22,208 £11,342 £11,462 £505 £505 £505 £505 £505

Table 2: Demonstrates the initial outlay and the operational costs the municipalities would need to incur to implement the LIT bulb technology

Operational assumptions:

  • Replacement of all CFL and LED bulbs with LIT bulbs would take place over a 3-year period
  • Installation costs are estimated by calculating a 20% mark up on the LIT bulb material costs
  • The LIT bulb needs to be replaced annually
  • The cost for replacing the LIT bulb is a fraction of the original price, namely £7.50. This is because the original LIT bulb is returned to the LIT factory and refilled with new media to create a ‘new’ LIT bulb. As such the price for ‘new’ LIT bulbs is the media T with an additional 50% price mark-up, plus the installation costs (assumed to be 20% of the new lightbulb price)
  • Electrical input required to operate the LIT bulb pump was included in the maintenance costs. An annual cost of £3 would be incurred to operate each pump per LIT bulb

The total capital investment required from the municipalities to purchase all the required LIT bulbs would be £44,415,000. The £505,000 annual maintenance costs for the LIT bulbs are 267% lower than the £1,850,000 maintenance costs required for LED lightbulbs, making the LIT bulb a very appealing alternative to LED lights.

Approach 2: Start-up breakeven point for the LIT bulb technology

To investigate the viability of the LIT bulb technology we used Investment Appraisal methods to evaluate the minimum selling price our LIT bulb could be sold at in order for the LIT start-up to still breakeven.

Operating Year 0 1 2 3 4 5 6 7 8
Market Capture (% increase relative to previous operational year) 0 0 0 10 20 40 40 60 60

Figure 3: Market capture of the LIT bulb over 8 years

We have engaged with market competitors to evaluate the implementation of our LIT bulb in the London market. TfL (Transport for London) owns and manages approximately 56 000 street lamps in London. We decided to get in touch with them to get a better field of the potential of the LIT bulb. Click the link to find out more

Operational assumptions:

  • It will take 5 years to complete the design and receive regulatory approval to introduce the first LIT bulb in a U.K. municipality
  • LIT bulbs will be manufactured in an already existing factory LIT stratup will be renting out
  • The rent for a facility that has the capacity to manufacture 900,000 lightbulbs is £200,000 per annum
  • Investment will only be required by LIT to cover expenses incurred for R&D purposes
  • £50,000,000 will be required to conduct research and ensure the LIT bacterial lightbulb design is robust and bio-contained
  • The facility will produce 10% more product than the requirements from the market, to ensure against faulty LIT bulbs
  • The tax rate for all profits generated by LIT are equivalent to the conventional corporate tax paid by small sized pharmaceutical start-ups, 33% of the profits generated by the company
  • Marketing costs will be slashed by 75%, after the 3rd operating year, as we assume returning clients will be established by that period of time. Marketing costs for the first three operating years will be £80,000, and beyond year 3 will be £20,000
  • A discount factor of 14% was used to conduct the Net Present Value (NPV) Analysis
  • The market capture will start increasing after the 3rd year of operation. This market capture will increase with the following trend:

NVP Analysis

The minimum selling price required to result in an NPV of 0, which is where the company can break even, is £47. Ideally, one wants a low minimum selling price as this gives a company leeway should new competition arise. In such a case a company has the ability to decrease the price of their product allowing it to remain relevant and competitive.

Market Study

The environmental impact and maintenance costs required for street lamps represent two of the largest concerns conventional lightbulbs raise for London’s municipality. In addition to the high costs incurred to power the streetlights, they also are a major source of pollution and large contributors to the carbon footprint of the city. The LIT bacterial powered lightbulb finds a perfect application in the domain of street lightning, as it tackles all the problems of high CO2 emissions addressed by the EU.

We carried out a competitors’ analysis to evaluate the current state of the lightbulb market. It focuses on the major alternative technologies that are currently considered/ being implemented in the place of conventional lightbulbs. Upon their evaluation, six major criteria were considered: scale of the project, environmental impact, maintenance costs, upfront costs, light intensity of the lightbulbs, and social impact

Click to see the impact analysis for each alternative

Criteria Convetional bulbs Alternative technology
Scale of project 900,000 streetlights 900,000 streetlights
Environmental impact (over a period of 1 year) Emissions: 3.9 million T of CO2
Energy consumption: 409 GWh of energy
Emissions: 3.9 million T of CO2
Energy consumption: 409 GWh of energy
Maintenance costs £4 million £4 million
Upfront costs to implement NA NA
Power/ light intensity 160 W 160 W
Social impact Citizens: + The yellow light released from the CFL lightbulbs from the street lights gives the streets a warm and welcoming character
- CFL lights contribute to the carbon footprint of London and therefore to the pollution of the city
- CFL lightbulbs are main contributors of light pollution in London. The sky in the City of London is covered by an “artificial twilight” that its population never gets to experience a true night Municipality: + Ease of having an already established process for this technology. As the technology is already in place no changes would be required − High CO2 emissions − High maintenance costs, due to regular replacement of the lightbulbs
Citizens: + The yellow light released from the CFL lightbulbs from the street lights gives the streets a warm and welcoming character
- CFL lights contribute to the carbon footprint of London and therefore to the pollution of the city
- CFL lightbulbs are main contributors of light pollution in London. The sky in the City of London is covered by an “artificial twilight” that its population never gets to experience a true night Municipality: + Ease of having an already established process for this technology. As the technology is already in place no changes would be required − High CO2 emissions − High maintenance costs, due to regular replacement of the lightbulbs
Case studies NA NA

Calculations & Justifications

Breakdown of the calculations and assumptions made to determine the statistics for the alternative technologies analysis conducted for this Impact Assessment. For all the maintenance costs for the different lightbulb technologies evaluated in this report, it was assumed that the lightbulbs are powered for 12 hours during the winter and 10 hours during the summer.

Conventional Lightbulbs

    Scale of project in London
  • 7 000 000 street lights in the UK and population of the UK is 66 million
  • given the population of London 8.7 million
  • assume approximately 900 000 street lights in London
    Maintenance costs
  • assume yearly basis
  • maintenance costs in the UK, £300 million
  • given the number of streetlights in the UK, price of an individual lightbulb £43
  • given the number of streetlights in London, total annual price in London £4 million

LED Lightbulbs

    Maintenance costs
  • LED lightbulbs have an average lifespan of 8 years
  • Over a period of 8 years using LED lights would cost:
    £45M as 900,000 lightbulbs will need to be replaced once in the 8th year (We are not accounting for the initial outlay required to purchase the lightbulbs in Year 0)
    Running costs when LED lights
  • It costs £0.0047 to turn LED lightbulbs on for a period of 10 hours
  • The running costs per annum would be £1.85M
  • The running costs for 8 years would be £14.8M
    Upfront Costs
  • Assume the cost for one 160W LED lightbulb is £47.5,
  • Assume a 5% vendors discount will be applied due to the magnitude of the purchase
  • The cost for 900,000 lightbulbs would be £45M

Lightbulbs with motion sensors

    Environmental Impact
  • Reduces maintenance costs by 50% (Statistic obtained from Tvilight’s case study on Texel)
    Maintenance Costs
  • Assume 900,000 wireless city sensors will be required
  • Each sensor is estimated to cost £150
  • The cost to acquire 900,000 wireless city sensors will be £135M
  • Assume a 5% vendors discount will be applied due to the magnitude of the purchase
  • Assume a 20% increase additional fee for installation purposes

Case Studies

This appendix contains brief summaries of the case studies used for each of the different alternative technologies evaluated in this report. The summaries aim to give additional context to currently implemented policies and projects.

Case Study 1 – SMART bulbs, City Council of Westminster

In 2011 Bouygues Energy and Services developed the ‘Smart Lights’ scheme in the City of Westminster. The scheme involved the installation of dimmable electronic lightbulbs. The electronic system was installed on every streetlamp and allowed for their luminescence to be controlled by a central management system. This mode of operation allows for the light brightness of the bulbs to be monitored remotely using the council’s CCTV system. Through implementing this technology, the City Council of Westminster reduced energy and maintenance costs and saved a collective of £8.4 million. Adopting this scheme to a scale of 14, 000 streetlamps aims to cut Carbon Dioxide emissions by 20%

Case Study 2 – LED lights, Transport for London

Transport for London (TfL) owns 52,000 of the 900,000 streetlamps in London. By 2016, the TfL aimed to replace the conventional CFL lightbulbs currently used for their 52,000 streetlamps with the more environmentally friendly and cost-efficient LED lightbulbs. LED lightbulbs require less frequent replacement, where their average lifespan is 8 years as opposed to the 6-month lifespan of the CFL lightbulbs. Although LED lightbulbs decrease CO2 emissions by 90%, controversy has risen in regards to the ambiance LED lightbulbs create. LED lights produce cold (white) light as opposed to the warm (yellow) light, which is produced by conventional CFL lightbulbs.

Case Study 3 – Tvilight

Tvilight is a company that incorporates wireless streetlight sensors on streetlamps to control their light intensity based on motion detection. The company has worked on 8 global projects that resulted in a 50% decrease in CO2 emissions and more than 40% decrease in maintenance costs. Currently, it is one of the biggest competitors for the LIT bacterial powered lightbulbs as this technology can be incorporated in existing streetlamps and does not require frequent wireless sensor replacement. However, as light intensity can be controlled from a remote location, it poses a risk hacking the municipality, which would lead to severe repercussions for the community.

Intellectual Property

The culture at LIT is about enabling people to creatively innovate and not shut down ideas if no short-term benefit is apparent. Still, as any starting company, one must play the game and protect our new product from global competitors. Intellectual Property Rights provide protection for technological innovations, such as the LIT bulb. Protecting the LIT bulb with a patent will prevent 3rd parties from selling, importing and manufacturing our creation.

Criteria to file a patent:

  • √ Novelty
  • √ Inventive Step

For now LIT bulb is aimed at streetlamps in London, hence we are first looking into filing a patent application with the UK Intellectual Property Office (IPO). Later, as our market expands we will consider extending the IP protection across Europe (European Patent Office) and the US (United States Patent and Trademark Office).


Modes of Operation

A corporate should have defined roles and tasks for members and staff in order to run the whole company efficiently. For our company, we have designed a new mode of operation. This mode ensures that every member remains up-to-date about the progress of current project. It also allows easy cross-departmental collaboration.

The Biosafety and Quality control will guarantee a manufacturing process performed in a safe and contained environment. Finally, research and development is essential to improve the engineered E.coli strains, co-culture of the 2 micro-organisms and biologics in general. We will strive to incorporate customers' feedback and constantly improve the LIT bulb.

Compartments and Leadership

Departmental Responsibilities

The department of finance and accounting will go through every operation process and manage the budget and spendings. LIT will collaborate with Intellectual Property Rights Law Firms to file a patent for the LIT bulb. This will provide our LIT bulb with the maximal protection and ensure advantage in the market of streetlights.

Most departments will either be involved in all production lines or 2 production lines (i.e. Hardware, Biologics, Final Assembly). Except for Public Relations and Marketing which only require information about the final product (Final Assembly). These departments will then be in charge of advertising the LIT bulb to the government/ local authorities or any other private construction companies.

Human resources will keep track of the whole process and recruit employees whose profile and experience corresponds to the skills LIT requires. LIT puts a lot of emphasis on Safety and Quality control, as the LIT bulb contains genetically engineered organisms. It is critical to ensure that the LIT bulb meets government’s regulations of disposal and to ensure the streetlight design and manufacture comply with cGMP (current Good Manufacture Practices.)


Westminster City Council: Smart Lights [Internet]. 2011 [cited 27 October 2017]. Available from:

Westminster City Council - Council, government and democracy [Internet]. 2012 [cited 27 October 2017]. Available from:

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