Decentralising Solar With Blockchain: Improve the Competitiveness of Solar in Energy Transition

Solar and blockchain technology are both cutting-edge emerging industries today. Each promises to deliver new innovations, alongside optimisations of our existing processes. There is extensive discussion among business and wider society surrounding these two sectors separately—but far less often the potential of them together. Yet it’s with their combination that a true energy revolution and widespread solar rollout could potentially be achieved.

Why blockchain could be brilliant for solar

For readers yet to learn—or feel they properly understand—what blockchain is, a brief recap is useful. Although like solar the mechanics of blockchain are quite complex, a good simple definition of blockchain is “a digital ledger of transactions that each user on a peer-to-peer network has access to, and can add to while being inhibited from modifying previous data entries.”

As a result of this system, blockchain is a record system that is easily accessible and transparent, while also remaining trusted and secure, and used by utilising cryptocurrency to make trades with others. By many measures, it’s the perfect foundation on which to build the next chapter of renewable energy’s growth.

In particular, the peer-to-peer—AKA decentralised—nature of blockchain could provide a particularly useful answer to the existing problems we see within energy networks around the world. It’s more or less a given new large-scale solar projects such as a solar farm will be connected to the community’s main energy grid.

Peer-to-Peer (P2P) Solar Energy Trading Using Blockchain Technology
P2P solar energy trading using blockchain technology.

But even when solar power is commonly used on a small-scale basis—such as to generate energy on residential and commercial buildings—the traditional energy grid is still centralised, and it remains subservient to it. This old system is fundamentally flawed for the challenges of this new era in renewable energy.

One where energy is intended to be generated at centralised locations like a power plant, and where the concept of millions of residencies being hooked up to solar power can place an immense stress on the network.

This issue is particularly pertinent surrounding power outages and shortages—and especially if they’re deemed to be the result of a “too soon” shift to utilising more green energy while simultaneously retiring fossil fuel sources. But by decentralising networks, a solar and blockchain combination could help address these current woes.

The pioneers making this powerful combination possible

Numerous innovators across the world have already made progress fusing the power of solar and blockchain together. At the forefront is Power Ledger, the Australian venture that first announced their plans for a blockchain energy trading platform back in 2016. Power Ledger operates on a peer-to-peer network that automates the buying and selling of excess energy generated via home solar panels. Since their beginnings in Australia, they’ve since expanded to see their software operated in India, Japan, Thailand, and the United States.

U.K.-based blockchain company Electron is looking to make the transition between natural gas and electric energy more seamless. Doing so while seeking to offer a streamlined solution that navigates the notorious red tape of the U.K. energy sector, and uses the power of blockchain. Thanks to Electron’s advocacy and participation in the UK’s “RecorDER” project, this is beginning to change.

Where there was prior a longstanding lack of an all-in-one registry for natural gas and electricity meters in the U.K., Electron’s arrival on scene provides a way to fix issues with the processes of the past, while also building the critical infrastructure the next generation of U.K. energy will require.

Blockchain Technology to Decentralise Conventional Infrastructures

WePower has been a key part of Estonia’s digital revolution. The little Eastern European nation is today widely regarded as the world’s leader in driving forward blockchain adoption across government services and operations. The WePower pilot in partnership with Elering was completed in 2018, and made strong inroads in proving in practice what theorists have said is possible when combining energy networks with blockchain technology.

Namely, that an energy procurement and trading platform could exist together, and a full rollout would provide a channel for consumers to generate energy and trade it with others. The work of WePower is also now expanding, with an Australia arm of the team now working away Down Under.

These examples show the work of pioneers within particular nations. But the push to adopt renewable energy is global, with potential demand for a solar and blockchain combination in developed and developing nations alike. For developing nations the opportunity to pursue new energy programs could ultimately bring many homes and businesses online for the first time.

Doing so with solar and blockchain combined means maintenance costs can stay low going forward for government, and for consumers the capacity to see energy bills remain consistent, and not spike adding new cost of living pressures. Better still, it means an avenue opens for those of limited financial means to potentially acquire a passive income stream to help bolster (even if via a small amount) their regular income via selling their excess energy.

The challenges that threaten to derail the solar-blockchain momentum

Right now many nations around the world are just finding their feet when it comes to harnessing the power of a solar and blockchain combination. Just as there is rightful optimism for the future there also needs to be clear-eyed recognition about the existing challenges that renewable energy sources commonly face as a whole. Foremost among them is the intermittent nature of solar energy harvesting, and the ancillary storage problems.

It’s great to imagine a utopian solar neighbourhood where neighbours can all easily give or take excess solar energy when they need it, but if a hot and sunny summer day is followed by a hot and cloudy summer day—where there remains heavy demand for air conditioning even though the sun is nestled behind cloud cover—then all households using their own solar energy at a high rate could pose a challenge to the concept of one using the excess that another isn’t using.

Decentralization of the Residential Solar Power Systems Network

Nonetheless, there are also bigger incentives in play beyond cheaper energy when it comes to combining solar and blockchain together. For those who look upon emerging challenges in our world—such as the perpetual but fundamentally borderless nature of terrorism—the capacity for a blockchain-based solar network offers the promise of upgraded security, providing a greater layer of protection to critical infrastructure and community resources against the threat of terrorism, cyber-attacks, and other threats.

Achieving decentralised energy independence via a solar and blockchain combination could also (all but) guarantee an end to state skirmishes and wars over energy resources. Something that’s not only an issue now but is expected to grow in future should the international community make a substantial change in course and begin pushing for a much faster move to renewable energy adoption.

Lighting the path ahead for this amazing new combination

Solar Magazine: Solar Industry News and Insights

The future for solar and blockchain integration is not yet crystal clear, but it’s certain the way in which we use energy is changing. That means the conditions for new combinations that drive innovation are very promising. Adoption won’t happen overnight, with some estimates putting it in excess of 25 years—but it’s indeed set to happen. Especially because it’s a reality that the climate crisis is getting worse—in recent weeks and months we’ve seen substantial bushfires burning on opposite hemispheres with huge parts of Australia and California ablaze—and so should we see such circumstances continue to worsen and government’s spurred to action, today’s 25-year timeline will be sped up substantially.

Ultimately the push towards greater solar adoption with blockchain is a matter of opportunity and necessity. The sooner this is realised, the sooner nations will be able to seize on such opportunities, and avoid the desperation of decisions made by necessity.


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