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Power over Ethernet vs. Class 2 Power Systems

January 15, 2023

Power over Ethernet (PoE) is a type of Class 2 rated power system, but it’s often forgotten that it’s not the only type of Class 2 system. PoE has its benefits but, with secure wireless data transfer, it’s getting harder to ignore how cost effective and beneficial other Class 2 power systems can be.

In this article, we’ll briefly go over common types of electrical systems, as outlined in the National Electrical Code (NEC), and more specifically what differentiates Class 2 rated power systems from those rated Class 1, 3, and (newly added as of November 2022) 4. It’s important to understand what a Class 2 power system is before we dive into the differences between a typical Class 2 power system, and PoE (which is an example of a Class 2 system). PoE has been gaining popularity for a couple decades, but now that wireless technology is becoming more ubiquitous, and secure, the benefits of other Class 2 power systems can outweigh those of PoE systems in many cases. We’ll go over each of the specific differences between PoE and other Class 2 systems, the benefits with respect to either system for each of these differences, and an ultimate cost and benefit conclusion to this comparison. Let’s start with the NEC.

The National Electrical Code (NEC) For The Rest Of Us

America’s electrical code, The National Electrical Code (or NEC), is more than just a reference book for electricians and engineers. The NEC also includes official information about different types of electrical systems that people without a background in electrical technology could benefit to learn about. If a building owner or manager, for example, wants to reduce the operating costs of their building, or get points towards a LEED certification, knowing the pros and cons of different types of electrical distribution systems can make a big difference. Different electrical systems have different power limitations, insulation requirements, installation processes, levels of protection from electrical fire and shock, and the list goes on. Choosing the right electrical system that saves a building energy, and aligns with additional electrical needs, can boost the value of a building, improve the comfort of occupants, and, of course, save on operational costs.

Types of Electrical Systems in the NEC

Most electrical systems in a building would fall under a category called “Wiring Methods” in the NEC. The most common example is the wiring that goes to and from electrical wall outlets. These electrical systems typically distribute alternating current (AC) from the grid, and require circuit breakers in an electrical panel. These power systems typically don’t have digitally monitored power limitation systems, which makes them more dangerous to work with. This is why only licensed electricians should work on these systems.

After those systems that follow “Wiring Methods” in the NEC, the next most common type of power system in a building is typically a “class rated” power system. These are digitally monitored for power limitations, and generally much safer to work with. Up until November 2022, there were only 3 class ratings for power systems, and all of them were power limited and differentiated based on available voltages, safety from fire or shock, as well as installation and insulation requirements. Now, however, there’s a new class rating, Class 4. Unlike other class rated power systems, Class 4 power systems are not power-limited, instead they are referred to as “fault-managed power” systems or FMP (you can read more about that here). This basically means they are intelligent electrical systems that detect specified faults, and shut off power when one is detected. But that’s not what this article is about. Let’s backtrack to the power-limited class ratings, specifically Class 2 low-voltage. 

Class 2 Power Systems

Class 2 power systems are kind of a sweet spot between Class 1 and Class 3 rated power systems. This is mainly because Class 2 systems are considered safe from both a fire and electrical shock perspective. On the other hand, there’s Class 1 and Class 3 rated systems. Class 3 systems are only safe from a fire initiation standpoint, and are used when a very specific voltage or wattage is required. Class 1 systems are used when the failure of equipment on conductors imposes a direct fire or life safety hazard and/or when higher than 100 W is necessary to power loads, but a breaker panel is not necessary. 

Power over Ethernet (PoE) is a great example of a Class 2 power system. It is rated as a Class 2 power system, but not all Class 2 power systems have the same standards and requirements as PoE. PoE has the same requirements as other Class 2 power systems, and then some. In the next part of this article, we’ll directly compare PoE with other Class 2 power systems, in a simple comparison table. Most of the categories we’ll compare them on demonstrate why PoE can easily be more expensive than other Class 2 power systems. 

PoE vs. Other Class 2 Power Systems

More information on each of these categories can be found below the table. Treat this table like an interactive learning guide, or table of contents. Use the links for each of the comparison factors (such as daisy chaining) to learn more about that topic.

Power over Ethernet (PoE) Class 2 Power Systems in General
Technical Additional built-in intelligence; PoE doesn’t deliver power unless the transmitter and receiver confirm power is safe to send with a “handshake”. No handshake required. The only intelligence required is the built-in power limitation of 100 W.
Termination of Cables It’s necessary to “terminate” the end of each cable in a PoE system with RJ45 plugs. RJ45 plugs used in PoE systems are much more expensive than typical RJ45 plugs. They can be about $20 per piece. Terminating cables is unnecessary for most other Class 2 power systems. Direct connection to screw-in type plug terminals are typically used instead (i.e. pluggable terminal blocks).
Cable Type Cables similar to Superior Essex PowerWise 22 gauge are typically used in PoE systems. These cables cost a little over $50 per 100 ft, or more depending on the cable gauge. 100 ft of a typical low voltage Class 2 rated cable is roughly $25.
Daisy Chaining PoE is not typically set up for daisy chaining. I’ve provided further explanation to this below. Class 2 power systems can often be daisy chained quite easily.
Yield Efficiency Potential power often goes unused because of the lack of the ability to daisy chain. This adds to the cost of PoE systems because it means more ports are required. This is further explained below. The full potential power per port (100W) can be fully utilized by daisy chaining loads.
Controls and Software Controls can be complex because the network equipment for PoE requires specialized IT professionals to deploy and commision. Installation doesn’t necessarily require specialized professionals (or the costs associated with hiring them). Controls are typically quite simple, with many options available from a wide range of vendors.
Compatible Fixtures PoE light fixtures require special hardware called Powered Devices (PDs) to be PoE compatible. Class 2 works with most LED fixtures, and simply requires the fixture to have a remote/removable driver certification (UL 2108).
Network Overhead Each powered device (a.k.a PD) in a PoE system (i.e. LED fixture) needs its own unique IP address. A single ethernet port (or WiFi connection) is required in a connected Class 2 system. So the entire system only needs a single IP address.

PoE vs. Class 2 Power Systems in General: Comparison Table Explained

Diagram of a PoE Type 4 System (IEEE 802.3bt - 100W): How PoE Works.

100 Watt Power over ethernet diagram (Type 4 PoE Diagram)
Image Courtesy of Argentum Electronics


Class 2 power systems in general are considered safe from the risk of electrical fire and shock, but PoE systems take this a step further with built-in intelligence that requires the power sourcing equipment (PSE - or - switch), and the powered device (PD - or load), to confirm with one another that power is safe to send. Technically, this is called a “handshake” between the switch (PSE or power sourcing equipment) and load (PD or powered device) in a PoE power system. This additional intelligence can easily increase the cost of PoE PSE’s (PoE Switches). 

On the other hand, both PoE and Class 2 systems (in many jurisdictions) don’t need an electrician for their installation, and don’t require mechanical protection of the cable. This is a massive cost advantage that Class 2 systems have over traditional electrical wiring in buildings.

Back to interactive table.

Termination of Cables

Panduit Power over ethernet cable
Image Source: Panduit Plug for PoE

In PoE systems, terminating cables with an RJ45 connector is necessary in order to plug cables into loads. A common misconception is that any old RJ45 plug can be used in a PoE system, but this is not the case. Typical RJ45 plugs are generally inexpensive (you can get a pack of 100 for about $20 CAD), but plugs used in PoE systems, such as this Panduit plug, go for over $20 a piece. It’s necessary to incorporate these more expensive plugs in PoE systems because, for PoE applications that exceed 60 W (i.e. taking advantage of the full 100W allowed in a class 2 system using the IEEE 802.3bt standard), RJ45 jacks need to be able to support additional current, and thicker gauges of cable.

These more expensive jacks add an additional cost of materials to this type of Class 2 power system, as well as additional time required to terminate stiffer conductors. Terminating a cable with a PoE compatible connector is not exactly easy, as it does require the right tools, know-how, and time. Here’s an article on how to do it as an example: How to Terminate with an RJ45 connector.

To elaborate on why these more expensive plugs are required for PoE systems, RJ45 plugs are chosen for projects based on the cable gauge that they will be connecting to (as well as other reasons). In American Wire Gauge (AWG), the larger the number, the smaller the wire diameter and thickness. The largest standard size is 0000 AWG, and 40 AWG is the smallest standard size. A CAT 5e cable typically comes in at 24 AWG per conductor, but a PoE cable is typically 22 AWG, meaning the gauge of the cable in a PoE system is larger (because more current has to be able to flow through, without heating up the cable and starting a fire).

To compare this to other Class 2 rated power systems (that are not PoE), the cables in these systems generally don’t need to be terminated. Instead, there is a direct connection between the power load and the cable. Usually a screw-in type plug terminal is used for these systems (i.e. pluggable terminal blocks).

Back to interactive table.

Cable Type

Now that you know PoE systems require cables with a larger gauge, the next logical step is to consider the additional cost of these thicker cables. PoE cables carry both power and data on the same conductors and, if they are cables used in type 4 PoE systems (100 Watt standard - IEEE 802.3bt), they need a gauge heavy enough to accommodate 100 W of power (typically 22 AWG). A guideline is: the heavier the gauge, the more expensive the cable. They need a heavier gauge in order to minimize temperature rise on the cable (due to line losses at low voltages) so that they don’t catch fire, especially when several cables are bundled together in the same cable tray or raceway.

If you’d like further information about line losses along cables, and why they occur more often on lines carrying lower voltages, check out this video: 

One example of a specific cable used in a type 4 PoE system is the SuperiorEssex PowerWise 1G PoE cable. The cost of this cable is a little over $50 per 100 ft. On the other hand, cables with a lower gauge (thicker cable) used in other low-voltage Class 2 rated systems cost about half the price (at $25 per 100 ft of cable). This price could be higher depending on the gauge of the cable. 

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Daisy Chaining

Example of Daisy Chaining for Lighting

PoE systems are not typically set up for daisy chaining, let us explain why. To understand this, it’s necessary to first understand two types of network topologies: the “star topology” and the “bus topology”. As you can see from the image below, a star topology can be explained as a system that transmits network data directly from a source, to a load. This means that the PSE and PDs must be connected directly. In a bus topology, on the other hand, each load also acts as a “source” so that data and power can be transmitted from load to load. 

A Star Topology

A star network topology
Image Source: TechTarget

A Bus Topology

bus network topology
Image Source: EDUCBA

A PoE system delivers both power and network traffic from a PoE switch (also called power sourcing equipment, or PSE for short), to a PD (powered load). So, if a PoE system were to use a bus topology (which would enable daisy chaining), each PD would also have to act as an Ethernet switch (and would thus need to integrate switching hardware) so that both network traffic and power could be routed to the next PD on the line. Enabling each PD to act as an Ethernet switch is expensive, as you can imagine, and that’s why a star topology is used, and why a PoE system can’t easily (or cost effectively) be daisy chained. On the other hand, some people consider it a benefit that PoE uses a star topology because if a failure occurs on a circuit, only a single LED fixture is affected (redundancy in points of failure).

Imagine a PSE and a light fixture being combined. This is what each PD would have to be in order to daisy chain a PoE system. 

a power load (lightbulb) with power sourcing equipment taped to it in a graphic

Other Class 2 rated systems can easily be daisy chained because they often use a bus topology. Class 2 rated systems that use a bus topology, usually communicate network data either via a wireless mesh, or using a wired communication protocol that supports bus topologies, such as RS-485.

The benefit of daisy chaining is that 1 port can be used for multiple devices. This reduces cabling lengths by making less “home runs'' necessary, as well as ensures that each power output port is fully utilized by enabling multiple loads to be connected to it. This brings us to our next point: yield efficiency. 

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Yield Efficiency

Each port on a PSE can provide up to a certain amount of wattage. In a type 4 PoE system (IEEE 802.3bt), 100 W per port is available. Let’s say you have a light fixture that only needs 20 W. Sounds good, right? That’s under 100 W, so PoE can provide enough power to that light. True. However, since daisy chaining is usually not practical in PoE systems, the remaining potential 80 W of power that could’ve been used to power other loads, no longer gets used. Power and energy are not wasted in this case, but the potential to efficiently use one port for multiple devices is. The need to use more than one port for power loads that could’ve been powered by one port, increases the cost of cabling, and the number of ports needed. Since there are a limited number of ports per PSE, multiple PSEs could be necessary because of this limitation (depending on the project), and this would also increase the cost of a PoE system. This is known as yield efficiency; the total power utilization ratio, per port.

On the other hand Class 2 power systems in general often use a bus topology, and can therefore be daisy chained. This means that each output port can be used to power multiple devices, maximizing the use of available power, and thus increasing the yield efficiency.

Increasing the yield efficiency decreases the systems overall cost, by reducing the amount of power capacity that goes unused.

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Controls and Software

The controls and software utilized in PoE systems depend on the manufacturer of the hardware, and can be very complex, so installation and deployment requires specialized IT professionals. This is an additional cost to implementing PoE systems. Controls for class 2 power systems in general, on the other hand, are typically much more simple with a wide variety of options from multiple vendors that are mostly all compatible with each other. This also means that controls in Class 2 rated power systems don’t usually require specialized professionals for deployment, and this contributes to making Class 2 rated systems less expensive to deploy than PoE. 

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Compatible Fixtures

PoE only works with PoE enabled devices called PD’s (Powered Devices). These devices are specialized for use with PoE systems, so they are more expensive than generic LED light fixtures, for example. Power loads connected to other Class 2 systems, can be generic power loads, so they do not need to be PoE enabled, and are less expensive than power loads in PoE systems.

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Network Overhead

As I mentioned before, each and every load (PD) connected to a PoE system needs its own port because loads can’t easily be daisy chained. So if you were setting up PoE lighting, each fixture would have its own IP address. However, when a Class 2 power system includes data transfer (is a connected system), the entire system only needs one ethernet port (or WiFi connection), which provides one IP address to the entire system. This is an advantage for Class 2 systems that are not PoE, because they can still have individually addressable loads (i.e. LED fixtures), with only a single IP address. 

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What does this mean for the total cost of PoE vs. the cost of other Class 2 power systems?

The cost really depends on the project in both cases. But, with every project, the cost of a PoE system will generally be more expensive than other Class 2 power systems.

In our experience PoE is typically about 1.5 x - 2 x the cost of other class 2 systems. 

Example of a Non-PoE Class 2 Power System - Cence Power

The low voltage product line from the company Cence Power includes a Class 2 power system that is not PoE.

Features of the Cence Power, low voltage power system include:

  • Power limited to 100 W, and considered safe from fire and electrical shock by the NEC.  
  • Termination of cables with an RJ45 plug is unnecessary. 
  • Incorporates less expensive cables than PoE systems. 
  • Power loads can be daisy chained, which reduces the length of cable needed for the system and cuts back on costs in this way. 
  • Only one ethernet port is required if a project requires the system to provide both power and data transfer. If the project does not require data transfer, no ethernet port or cables are required. 
  • Installation of this system is relatively simple and doesn’t require hiring specialized professionals. 
  • If your project requires LED fixtures, this system works with most LED fixtures that have a remote or removable driver (according to UL 2198). This is in contrast to PoE systems, which only work with PoE enabled power loads (PDs). 

Cence Panel
Cence Panel

Final Thoughts

Power over Ethernet has been growing in popularity since Cisco saw the need for cables that transferred both power and data, and developed the first proprietary version of PoE in 2000. The main application of this technology was to power VoIP phones, which some people still use today. Additionally, PoE is still used for WiFi routers and security cameras to reduce cabling costs. Recently, it’s also become more trendy to implement PoE for lighting, but just because something is trendy, doesn’t mean it’s the most efficient or cost effective method to achieve desired results. Other Class 2 power systems, like Cence Power’s system, can reduce the capital cost of integrating lighting with intelligent controls.

If you’d like to learn more about how to implement Class 2 power systems that are not based on PoE technology, get in touch

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Erin Law

Erin is the Creative Director at Cence Power. She has a New Media degree from the University of Toronto and 5 years of experience in the communications field. She has also done digital content creation for dozens of clients through her own business called Story Unlocked. Erin loves technology, especially when it makes the world a better place.

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