by Jason Deign, Solarplaza

A digital currency designed to accelerate solar generation could be worth up to €30 per MWh in three years time.

The promoters of SolarCoin, a digital asset designed to accelerate solar adoption worldwide, say it could be worth up to €30 per megawatt-hour by the end of 2019. Gaining extra revenue from SolarCoins priced at between €20 and €30 could help increase the revenues of solar asset owners, said François Sonnet, advisor to the SolarCoin Foundation and members SolarChange and Solcrypto.

The price is dependent on SolarCoin being used across a million solar installations worldwide, which is 100 times the current level of adoption. But uptake of SolarCoin wallets, which are downloaded for free from the SolarCoin website, is already exceeding expectations, Sonnet said. “We see developing nations picking up quickly on the digital asset,” he commented.  

Currently SolarCoins (symbol: SLR) are being implemented on around 10,000 mostly residential solar installations and are worth around €0.05 per unit. Asset owners are given a SolarCoin for every megawatt-hour of solar energy they produce. The digital asset, launched in January 2014, uses blockchain technology similar to that behind bitcoin, the digital asset and payment system now worth almost $10 billion. However, unlike bitcoin, which is ‘mined’ using costly computer hardware, SolarCoin is offered like Air Miles, at the rate of 1SLR per megawatt-hour. “We call that ‘proof of generation’,” commented Sonnet. “If you can provide ownership documentation for a grid-connected solar installation, then you are entitled to SolarCoins.”

SolarCoins can be exchanged for bitcoins and fiat money on a number of exchanges. But in contrast to bitcoin and regular cash, SolarCoin is specifically aimed at solar energy production. As well as creating revenues for producers, it can help provide valuable generation data for utilities and other off-takers. The crypto-currency is granted in exchange for verified proof of solar energy production, with around SLR5,040 being issued into circulation every week.

Sonnet said uptake was being aided by the integration of SolarCoin into solar monitoring systems and crowdfunding platforms such as The Sun Exchange in South Africa and Lumo in France. This integration makes it easy for solar asset owners to sign up for SolarCoin as all they have to do is download an electronic wallet for the crypto-currency.

Verification of solar production can then take place automatically through the monitoring or crowdfunding platform. Although the low value of SolarCoins at present means they are unlikely to represent a significant revenue stream for most solar asset owners, Sonnet said that could change as the crypto-currency gained strength and acceptance worldwide.

While the SolarCoin Foundation is currently targeting a million users, to bring SolarCoin’s value up to between €20 and €30 per unit, the total supply of the cryptocurrency is designed to last 40 years. Over this period it could provide an incentive for generating 97.5 petawatt-hours of energy across 200 million solar installations.

And it is hoped the increasing value of SolarCoin will encourage continued growth of the solar market as subsidies fade across many of PV’s biggest markets.

“Almost all of these installations benefited from subsidies, but the future ones won’t,” Sonnet said. “The internal rate of return of a solar installation has dropped to 8% to 10% in Europe for residential solar, and a lot of banks and investors don’t want to perform a solar install because they don’t trust government subsidy schemes. Blockchain tech enables both incentivization as well as independence from government-backed schemes.”

In the absence of subsidies, SolarCoin could deliver an added incentive for investors to stay interested in solar, said Sonnet. “SolarCoin provides a long-term view of what the solar investment is going to produce,” he said. “The higher the volume of participants, the higher the value of the coin.”

Meet François Sonnet and discover new ways to add revenue streams and improve your solar plants’ internal rates of return at Solar Asset Management Europe, on November 9 and 10 in Milan, Italy. Register now.