This interview is part of our new Blockchain In Energy series, where we interview the world's leading thought leaders on the front lines of the intersections between blockchain and energy.
In this interview we speak with Nick Gogerty, CEO and co-founder of SolarCoin, to understand how his company is using blockchain to transform the energy business, and what the future of the industry holds.
1. What’s the story behind SolarCoin? Why and how did you begin?
NG: SolarCoin started in Jan 2014. The idea is to create a global incentive for solar energy that lasts 40 years. We are in year 5 and now partnered with a platform that gives us access to 5% of solar. The economics of value are based on the network theory of capital. In theory, if all 30m solar installation owners signed up, the market cap would be worth $30-100bn.
2. Please describe your use case and how SolarCoin uses blockchain:
NG: SolarCoin works like air miles for the producers of solar energy. Anyone who can verify production of 1 MWh of solar energy may receive 1 SLR.
As a reward SolarCoin circulates like any currency. The issuance of a SolarCoin includes production source and data. In the future, this may be used by merchants or others to reward or acknowledge specific producers or regions.
Our economic model is based on the research of 90 currencies over 30 years representing 95% of GWP. Our findings indicate that if SolarCoin can get 1m solar installations participating. The economic reward available for solar energy is north of $5bn.
3. Could you share a specific customer/user that benefits from what you offer? What has your service done for them?
NG: We have incentivized 6,000 solar installations for energy production in 83 countries. Our current token value is minor although has reached $2/MWh. A producer holding the equity portion of a structured finance deal that has a $40/MW PPA and 10% equity would realize a 50% increase in gross cash flows and likely 100% increase in IRR on the project assuming the currency value was stable for 10-20 years.
Many large assumptions here, but it is what we are striving for. Our original target was a $10-30/MWh incentive. We are far away from that, but still very small 6k installations. Our current project size is in line with our model. Our goal now is to add users. We are either partnered with or in talks with platforms tracking 600k installations.
4. What other blockchain use cases in the energy industry are you excited about?
NG: Virtual power plants (VPP) will be very cool. It is just an issue of the incumbents fighting against them and regulatory forces. Storage will be the watershed economic driver for this. Look out for things to get heated in 2-3 years as trillions of $'s in stranded assets face the onslaught of cheap storage and VPPs driven by renewables..
5. Where will SolarCoin be in 5 years?
NG: Our goal is to be on energy monitoring platforms connected to 50% of global solar and actively distributed to 20% of global solar users. This would be mean over 4m users receiving SolarCoin.
We don't discuss price targets but our Value model for currencies indicates most currencies are worth $500 to $5,000 per participant when measured by M0/Market Cap.