Have you ever sought to support sustainability through your purchasing decisions? How about through the very form of currency you spend? SolarCoin is a new digital currency launched to incentivise the generation of solar energy. Each solar coin is awarded for the proven generation of 1MWh of solar energy to anyone who presents proof within four years of generation. Upon launch, claims can be backdated to 2010.
Like all electronic currencies, SolarCoins will bypass the banking system to allow transactions between individuals and companies at very little cost – rather like the impact of email on postal services. Since they lack a central bank, however, a key challenge of non-state-backed currencies is distribution. Bitcoin, the most famous (or even notorious) digital currency of the moment, manages this through rewarding ‘miners’ who use computing power to solve increasingly difficult cryptographic problems with coins.
By contrast, more than 99% of SolarCoins are ‘pre-mined’: that is, they are ready to be distributed to solar energy generators. There are already 99 billion SolarCoins, a number based on the IEA’s forecast of how many megawatt hours of solar energy will be produced over the next 40 years. The SolarCoin Foundation aims to accelerate this, hoping SolarCoins will be valued at $20-$30 each within the next few years – although this is almost impossible to predict.
“After 40 years, if we’ve given out the number of coins we expect to give out, solar energy will be a dominant form of energy in the world and will have a tremendous impact”, says John Dolan, Chair of the SolarCoin Foundation.
Dolan hopes sustainable companies, such as Whole Foods, will accept SolarCoin to enhance their branding.
SolarCoin has been broadly welcomed by the renewables industry, while acknowledging that it has some way to go before becoming a key incentive. “The advent of SolarCoin is interesting and we’ll certainly keep an eye on how it develops, but Government support schemes, such as FITs, ROCs, CfDs and the RHI, will remain the key financial incentives for UK renewables developers for some time yet”, says Richard Ingle, Head of Renewable Energy Finance.
Security, however, will remain a key issue as demonstrated by the apparent theft of 750,000 Bitcoins from Mt Gox, Tokyo, one of the world’s largest Bitcoin exchanges. Coming from a Wall Street background, Dolan claims no ideological attachment to keeping SolarCoin unregulated, unlike some proponents of other digital currencies. “I’m familiar with the notion that the regulators are there”, he says, adding: “It’s important to deal with them, and in time there will be regulation related to digital currencies.” – Ibrahim Maiga
Photo credit: SolarCoin