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From Bill of Materials to Total Cost of Ownership
LoRa Alliance
®
Piles of discarded batteries underscore
the hidden costs and waste of battery-
powered IoT. In large deployments,
frequent battery replacement not only
drives up labor and downtime but also
contributes to e-waste. Focusing solely on
upfront device cost is shortsighted when
maintenance can dominate the lifecycle
cost[2].
In the early IoT era, project evaluations often centered on minimizing upfront costs – the
bill of materials (BOM) for sensors and devices. A battery-powered LoRaWAN sensor
might have seemed cheaper than one with a built-in energy harvester or solar panel.
However, this BOM-centric view can be misleading. Total Cost of Ownership (TCO) –
the cumulative cost of buying, deploying, and operating a device over its lifespan – often
tells a different story. Maintenance, especially battery replacement labor, logistics, and
downtime, constitutes a huge fraction of IoT deployment costs. In large-scale building
automation, for example, battery replacement can account for up to 70% of total
maintenance costs[1].
Each sensor's battery might need changing every few years, and servicing thousands of
devices quickly becomes a massive expense. One analysis showed that for 10,000
wireless sensors, replacing batteries twice over five years (at roughly \$300 per service
visit) would cost about \$6 million in maintenance alone[2] – many times the initial
hardware cost.
Because of these factors, IoT solution providers and customers are shifting their focus
from just the device price tag to the average cost per year of operation. An energy-
harvesting LoRaWAN device may cost slightly more initially – on the order of 10–30%
higher upfront than a battery-only alternative – but it pays for itself through reduced
maintenance. In fact, when accounting for labor, travel, replacement batteries, and
system downtime, the overall TCO of energy-harvesting devices is significantly lower
than that of traditional battery-powered units[3]. Because of this, both IoT solution
