Get Paid in SolarCoin For Putting PV on Your Roof
01.31.2019

This story is part of BREAKER’s Social Good Week, a series looking at ways blockchain technology can engineer progress and help humanity.

Renewable energy blockchain pioneer Nick Gogerty likes to meet clients at the Explorers Club in New York. It’s a rambling place where ivory tusks flank a fireplace and a stuffed polar bear poses in a growl on the mezzanine.

Gogerty has been on something of an adventure himself since co-founding the SolarCoin Foundation with Joseph Zitoli in 2014. The nonprofit manages solarcoins (SLR) that reward solar producers and therefore foster planetary health.

The coins use what the foundation calls Proof of X, rather than bitcoin’s energy-intensive proof-of-work consensus system. That means that anyone who produces solar power can join the chain and be rewarded with one SLR for every megawatt hour of solar power they generate. That’s the only way to get a SLR.

Nick Gogerty

The idea is that the coins will impart enough value to incentivize people to install more solar panels, knowing they’ll receive SLR in addition to low-cost electricity. That equates, in theory at least, to less coal burned, less carbon in the atmosphere, and mitigated climate change.

Gogerty, an optimist who wants to reduce our dependence on fossil fuels, believes SolarCoin is going to catch on even though SolarCoin has only 3,500 to 4,500 users now (there are more than one million solar installations in the U.S. alone).

Crypto purists might blame this current lack of scale on the foundation’s creation story. “We did a couple of unpopular crypto space moves at first,” says Gogerty, who financed the group with Zitoli. “One, we are highly centralized. Second, due to the state of our tech at the time, we had a huge premine of our coins.” (Critics of premining say it centralizes power in the hands of a blockchain’s founders. Gogerty says all the premined SLRs are held transparently.)

By huge, Gogerty means boundary-breaking huge, at 98 billion SLRs. By comparison, the bitcoin algorithm was designed to stop releasing coins after 21 million. Still, the logic of issuing so many SLRs seems sound.

“We predicted there would be 98 billion megawatts of solar energy produced over the next 40 years. We wanted a goal that was large enough to be audacious, but also reasonable within the context of climate change,” says Gogerty, who has worked at hedge funds and as an energy analyst. “We know our estimate will be wrong, but we hope it is useful. If solar energy is produced in excess prior to the forty year mark, then the climate has won and the program terminates early. If the energy production or participation takes longer, we will extend the program.” The latest science suggests that the next 12 years are crucial for reducing carbon output, and that we’ll be feeling the effects of climate change well before the 2050s.

Before launching Solarcoin, Gogerty researched the world’s 50 largest currencies, plus gold. His team determined the extent of each currency’s network, and the value held in dollars per node, or person. He wanted to ensure that the coins issued would be valuable enough to incentivize their use.

Bitcoin, for example, has a market cap of roughly $60 billion and 20 to 30 million users. Each node is worth about $3,000. By contrast, as of now, SolarCoin has about 50 million units in circulation and a market cap of about $1.5 million. Each node is worth only about $428 and each coin has a value of only $0.03. Therefore, the average suburban home can only claim a buck or two, total, for their solar output, even when SolarCoin adds the bonus of awarding them SLRs for their solar production all the way back to 2010.

“Now we see ourselves as selling a solar-energy rewards program to platforms."

“That’s hardly worth showing up for right now,” Gogerty admits. “The only people who will show up are huge solar installers who can claim a few thousand bucks, or early adopters who want to play along with a cool thing.”

But, Gogerty believes the coins will reach an inflection point at 50,000 users. At that point, he says, demand for the coins will increase even as the supply in circulation increases, and each coin’s value will be worth $1 to $1.50. At that rate, just for registering, a typical solar homeowner could get $30 or more worth of SolarCoin. “After that, we think the network effect feeds on itself,” he says.

To help reach scale, about 18 months ago SolarCoin pivoted from trying to grow a grassroots movement to partnering with solar energy monitoring platforms that manage the data and payments for home and commercial solar systems. “Now we see ourselves as selling a solar-energy rewards program to platforms. They can use our reward coins as an easy way to get customer loyalty,” Gogerty says.

SolarCoin’s first partnership is with SMA Inverters, a German company with a website called Sunny Portal, the largest solar installation monitoring platform in the world. They currently monitor 300,000 sites daily—all potential recipients of Solarcoin. Solar panels on the platform generate 25 gigawatts of power at peak power output, equal to the capacity of about 25 coal-powered plants.

The foundation is talking with two other platforms, giving it the potential to put nearly one million more installations on the SolarCoin blockchain. If so, that would really represent scale, the price of the coins may finally rise, and Gogerty’s gamble can finally pay off.

Correction: SolarCoin’s consensus mechanism is Proof of X, not Proof of Solar. Participants get 1 SLR for each megawatt hour of solar power they produce, not kilowatt.

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