SolarCoin is a cryptocurrency created in 2014 to encourage solar energy generation for commercial solar producers and individuals with solar panels installed.
The currency serves as a reward programme for solar electricity generation - one SolarCoin is rewarded for each MWh of solar energy produced. It uses a proof of stake time algorithm, which is based on blockchain technology, but uses less energy and has a lower carbon footprint than other similar blockchain technologies, such as the proof of work technology used by Bitcoin.
The different applications of SolarCoin
Users can apply their SolarCoins in a variety of manners, such as using them to shop in partner stores or exchanging them for conventional currency. There are still not many partner stores and SolarCoin’s value is still relatively low, with an exchange rate of $0.55 as of February 5th. However, if more energy generators and individuals adopt the system, the value is expected to rise significantly. Investors expect its exchange value to eventually go up to around $20-$30, and its distribution and adoption is gradually growing.
Indeed, the technology seems to be gaining momentum as more companies make the move to incorporate SolarCoin or accept it as a form of payment. The currency’s circulation has reached around 10,000 solar installations internationally. And, in January 2018, ACWA Power - with operations in the Middle East, North and Southern African and Southeast Asia - became the first utility-scale generator to adopt SolarCoin.
Benefits of adopting SolarCoin for utilities
For ACWA, joining the scheme goes beyond the obvious benefits of investing in sustainable energy and lowering their carbon emissions, which can help SolarCoin and its adopters play an important part in the clean energy transition.
The currency can also come to be an important source of revenue for solar energy producers, since it is a supplement to traditional currency as an exchange piece for goods and services, thus reducing the cost of solar energy. In addition, the technology can reduce the payback time of solar installations, and the adoption of a reward system may encourage customers to not only shift to solar power, but to transition to the company itself.
According to Paddy Padmanathan, President and CEO of ACWA Power, “we are always looking for ways to adopt new technologies to add value and reduce cost in all that we do, and blockchain technology, in our view, offers a yet untapped opportunity for the power generation sector.”
“Now, through SolarCoin, we are able to utilise blockchain technology in one way to create value to renewable energy generation. Being early utility-scale adopters of SolarCoin, ACWA Power is proud to leverage our rapidly growing solar energy generation capacity to accelerate the utilization of SolarCoins to in time further reduce the cost of solar energy through the supplementary value being created.”