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Optical Drum Ceilometer 
An optical drum ceilometer uses triangulation to determine the height of a spot of light projected onto the base of the cloud. It consists essentially of a rotating projector, a detector, and a recorder. The projector emits an intense beam of light above into the sky at an angle that varies with the rotation. The detector, which is located at a fixed distance from the projector, uses a photoelectric cell pointing vertically. When it detects the projected light return from the cloud base, the instrument notes the angle and the calculation gives the height of clouds.
Laser Ceilometer 
A laser ceilometer consist of a vertically pointing laser and a receiver in the same location. A laser pulse with a duration on the order of nanoseconds is sent through the atmosphere. As the beam travels through the atmosphere, tiny fractions of the light are scattered by aerosols. Generally, the size of the particles in question are similar in size to the wavelength of the laser. This situation leads to Mie scattering. A small component of this scattered light is directed back to the lidar receiver. The timing of the received signal can be transformed into a spatial range, z, by using the speed of light. I.e.,
where c is the light speed in the air.
In this way, each pulse of laser light results in a vertical profile of aerosol concentration within the atmosphere. Generally, many individual profiles will be averaged together in order to increase the signal to noise ratio and average profiles are reported on a time scale of seconds. The presence of clouds or water droplets leads to a very strong return signal compared to background levels, which allows for cloud heights to be easily identified.
For cloud base determination purpose, due to the ceilometers ability to pick up any particle in the air (dust, precipitation, smoke, etc...), it will give occasional false readings. As an example, depending on the threshold used, falling diamond dust (Ice Crystals) may cause the ceilometer to report a cloud height of zero, even though the sky is clear.
Using these last properties, ceilometers will have other uses. Since the instrument will note any returns, it is possible to locate any faint layer where it occurs, additionally to the cloud's base, by looking at the whole pattern of returned energy. Furthermore, the rate at which diffusion happens can be noted by the diminishing part returned to the ceilometer in clear air, giving the coefficient of extinction of the light signal. Using these data could give the vertical visibility and the possible concentration of air pollutants. This has been developed in research and could be applied for operational purpose.
See also 
|Wikimedia Commons has media related to: Ceilometer|
- National Science Digital Library - Ceilometer
- Ceilometer from McGill University
- National Weather Service ASOS ceilometer page