Are there any example of Bitcoin being used for IOT application? I am looking for examples of Bitcoin mining being integrated into embedded systems so that a by product of the services being provided is more Bitcoins. For example if I have a control system for a factory CHP system boiler then I would like to use that to generate bitcoins during spare cycles as well as provide a mechanism for billing and buying/selling spare capacity.
That makes no economic sense. If such a thing did make economic sense, everyone would already be doing it, raising the difficulty until just the point where it no longer made sense. There is no way the bitcoins generated could justify the additional electricity consumed.

This is equivalent to arguing that if you have a bit of ground beef left over from making tacos for your family, you can make a hamburger and sell it to compete with McDonald's. McDonald's is 100% optimized for making and selling hamburgers cheaply. There is no way you could justify the costs involved in making and sell a single hamburger.

The supply of newly-mined Bitcoins has a fixed, known rate. If the most efficient miners spend X dollars to mine a Bitcoin, then they will increase the amount of mining until it costs them almost X dollars to mine a Bitcoin. Unless you can compete with their efficiency, which you can't because everything about their operation is intended to maximize their efficiency, you will lose money.