Maybe you don’t need any more incentive to put solar panels on your roof. You’re happy saving money on the electricity bill and helping the environment. But if you do need encouragement, here’s another idea: a digital currency designed to reward homeowners for every power unit they generate.
SolarCoin is like Bitcoin with a particular goal in mind. Its creators don’t want to create an alternative currency for the sake of it; SolarCoin is aimed squarely at getting people to adopt renewable energy.
“Put simply, SolarCoin incents more solar to be generated faster, which reduces the cost and rate of shipping PV even more in the standard virtuous cycle of innovation,” says Nick Gogerty an academic and financial advisor leading the project.
Here’s how it works. When homeowners produce renewable power, states with renewable portfolio standard legislation issue them certificates. That certificate has value. Utilities buy them to meet their obligations to generate a certain amount of renewable power, rather than generating their own. What SolarCoin does is create another way to monetize these certificates. Users can exchange certificates for SolarCoin–one megawatt hour currently equals one SolarCoin–then either exchange the currency back for cash (assuming someone else wants to buy) or make a purchase with a participating merchant. At the moment, SolarCoins have little value. The project just launched in January, but Gogerty hopes their price will reach $20 to $30 within five years.
Two groups so far, both charities, accept SolarCoins. Gogerty hopes for more to come on-board as more currency enters circulation. That happens two ways: Either through people “mining,” as one does with a Bitcoin, or by installing solar panels and getting a renewable energy certificate and then exchanging that value for the coins. His big vision is to see 52 million coins by the end of the year, and up to 98 billion SolarCoins exchanged in 40 years. That represents 97,500 terawatt hours of solar power–a staggering figure if achieved.
SolarCoin is run by the SolarCoin Foundation, a network of volunteers. Gogerty says groups in major solar power-producing countries, like Germany and Japan, are starting their own SolarCoin pilot projects. In four months, he expects up to 35 initiatives to be underway and for the SolarCoins to be traded on multiple digital currency exchanges.
Gogerty compares SolarCoin (and Bitcoin) to the early days of the Internet–a set of protocols that are clunky now, but gradually take hold as the technology improves, and people appreciate their value.
“SolarCoin as a new currency should be considered experimental, but a highly interesting form of risk exposure,” he says. “Earning broad trust [for] SolarCoin will reduce the risk of SolarCoin. Money, like the economy, functions as a social protocol. It ultimately becomes what people and institutions believe and want it to be.”