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 Abraham Cambridge, CEO and founder of The Sun Exchange, 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 The Sun Exchange? Why and how did you begin?
AC: I have an academic background in climate change science. Through my studies, it became clear that climate change is the most imminent threat to humanity, and that transitioning the world away from fossil fuels and towards solar power is the solution.
After six years of building and running a solar panel installation company in the U.K. (no easy feat in a country known for its lack of sunshine!) I moved to South Africa in 2014 to work as a solar engineering consultant. I was struck by the absence of solar panels on rooftops, despite Southern Africa being one of Earth’s sunniest regions. Unlike the UK, in a sunny country like South Africa, solar panels are so effective that subsidies are not required to provide a double-digit return on investment. I researched the challenges of the local solar industry and realized lack of appropriate finance for businesses and organisations to go solar was the most common roadblock. Simultaneously, I started using cryptocurrency to send money home to the UK and discovered that the technology made moving money around the world incredibly fast, easy and extremely low cost.
These two concurrent realisations sparked the idea for Sun Exchange – universal peer-to-peer solar panel leasing. After two years of developing Sun Exchange in my spare time, in November 2015, I quit my day job and set off on a mission to close the solar funding gap by connecting the world to the sun.
2. Please describe your use case and how The Sun Exchange uses blockchain:
AC: The Sun Exchange peer-to-peer solar leasing platform relies on the frictionless, secure and instant nature of cryptocurrency. It’s what makes our innovative approach of micro-leasing individual solar cells across borders possible.
Sun Exchange directly connects organisations in emerging markets wanting to go solar, with individuals globally who want to invest in solar. We enable individuals to purchase solar cells and then lease them to be installed in remotely-located solar projects powering schools, businesses and other organisations in developing regions. Solar cells owners earn income from selling the electricity their cells produce, while the organisations consuming electricity reduce their energy costs and carbon footprint. All transactions are done through the Sun Exchange platform at www.thesunexchange.com, using the Bitcoin blockchain as a payment rail.
The Ethereum Blockchain also powers Sun Exchange’s SUNEX digital rewards token, which acts as a rewards programme for individuals who invest in solar cells through the Sun Exchange platform.
Sun Exchange solves three main problems with the use of cryptocurrency. First, we make clean energy more accessible and affordable in emerging markets where traditional debt financing solutions aren’t available or viable for organisations such as schools, SMEs and nonprofits. We also address the challenge faced by countless individuals around the world who want to gain the economic and carbon-offset benefits of owning solar power-generating assets, but don’t have the roof space and/or economic resources to do so. Finally, we dramatically simplify the process of getting investments and payments into and out of developing markets like Africa, which has historically been costly, time-consuming and high-risk, hindering economic growth.
3. Could you share a specific customer/user that benefits from what you offer? What has your service done for them?
AC: Six of the thirteen solar project crowdsales Sun Exchange has hosted have been for schools. Not only do these projects reduce the schools’ carbon footprint, they also significantly reduce energy costs, allowing schools to focus resources on their core mission of education, and they provide an opportunity for students to learn about innovation, climate leadership, science and sustainability.
The school project we most recently completed is a 73.26 kW system, made up of 15,984 solar cells to power Wynberg Boys High School in Cape Town, South Africa. The crowdsale sold out in just over 3 hours. One hundred and seventy five Sun Exchange members across 20 countries came together on the Sun Exchange platform to purchase solar cells and make this project possible. They can now look forward to earning an estimated 11.49% IRR for 20 years from the solar cells they’ve purchased. The project is expected to offset over 2,000 tonnes of carbon emissions over its lifespan, and the school will reduce energy costs by ~35% in the first year alone. This video provides a glimpse into what going solar means for Wynberg Boys High School and its students:
4. What other blockchain use cases in the energy industry are you excited about?
AC: One of the novel uses cases for solar and blockchain in the sector is the SolarCoin offered by the SolarCoin Foundation. The foundation offers a free and incentive coin to the owners of solar hardware for every 1MWh produced, with the solar production and assets being recorded on the SolarCoin Blockchain. The SolarCoin has value and is tradable. Like Sun Exchange, it’s a simple, straightforward, yet elegant blockchain use case with demonstrated ability to facilitate and promote the transition to clean power. We facilitate the acquisition of SolarCoins through our platform for our solar cell owners.
5. Where will The Sun Exchange be in 5 years?
AC: Sun Exchange will be the universally standard platform to buy, own and earn from solar panels, and the place where businesses in emerging markets come to go solar. I envision a sustainable, global energy future with significant increases in solar adoption in emerging markets, and with truly decentralised infrastructure ownership and generation.
Sun Exchange is addressing the African commercial & industrial (C&I) solar market, which is estimated to be worth ~$5B over the next 5 years. According to Bloomberg New Energy Finance, C&I power consumption from just seven countries in Sub-Saharan Africa where solar is economically viable totaled some 31 terawatt hours (TWh) in 2015, which to replace with solar would take some $20B of investment.
Sun Exchange in on track to achieve break-even by July 2021, by capturing approximately .05% of market share with 4.25 megawatts (MW) of solar installed throughout Africa. By the end of 2025, we aim to have 221MW of solar installed, representing 1% of the C&I market share in Africa.