Hi Anand,
If this is for commercial application, they make sonar tank level sensors specifically designed to operate in wet environments. I mentioned this alternative since I've installed a ton of these in large water tanks for the state.
The pot + float thing I built one day for my own water tank in my sprinkler system. The float switches I had been using cost around 30-bucks each, and seem to be designed to self-destruct after about 1 year in operation...
My cobbled-together one has lasted 5+ years, and cost me around $3.
I've never tried reflecting IR off the waters surface, but I might have to try it some day. If it does work, I'm curious if maybe some of the Sharp IR distance measuring modules would be something to look at?
The only draw-backs I see with IR in this environment would be lens fogging or specular reflections from the water surface from ambient light.
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