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Solar power and blockchain technology are both seen as cutting-edge technologies that will fundamentally transform how we live in the 21st century. Yet at the time of writing the gulf between the progress of these two technologies is considerable. Whereas solar power has now firmly made its way into mainstream uptake, blockchain is still in its relative infancy. But blockchain’s current standing shouldn’t be mistaken for its future potential – especially given what it could eventually offer the solar sector.
The Fundamentals of Blockchain
Often people who hold an interest in emerging tech like solar will maintain a habit of keeping up with emerging tech generally. But for those who really only know blockchain as a buzzword – or perhaps are hearing about it for the first time – a brief definition of it will assist. Put simply, blockchain is a digital ledger that allows many users on a peer-to-peer network (P2P) to add data entries to it, but not alter previous entries.
There are many elements that make blockchain valuable, but this ability to have multiple participants contribute entries while preventing modification of previous entries – thus inhibiting the chance for manipulation or misuse – is part of what makes blockchain so exciting. The network offers the benefits of widespread access to a platform, without the concerns surrounding hacking and similar issues that other technologies could encounter. For the solar sector and the wider renewables industry, blockchain could be truly transformative.
A Future Beyond FIT
Right now the feed-in tariff (FIT) is a common source of income for Australian solar owners. Although the exact FIT rate can vary between providers and one state or territory to another, it’s proven to be a very popular incentive for Aussies nationwide. For those seeking to install a solar system, there’s the knowledge a FIT can help pay off more quickly the installation costs. For those who have paid off their system, a FIT can help offset energy bills during months with less sunshine, or even be a bonus income stream if their solar system already covers household energy needs year-round.
But while the FIT is popular, it’s unlikely to stay static in its current settings. Presently jurisdictions across Australia are beginning to wrestle with the challenge of avoiding blackouts due to excess solar feeding back to the grid. Scaling back the current rate of FIT could be a lever governments pull down the line. But even if they do, they’ll likely be seeking out other avenues to ensure excess energy isn’t lost, and that would-be solar owners will still have an incentive in future to install a new system.
Whatever governments do, they ultimately need to reduce excess energy going to the grid.
Setting up community batteries that send excess energy into local storage is one option, but – depending on its structure – that setup could be a totally passive exercise for a household with excess energy, and a household that receives it. That’s not ideal from the perspective of a solar system owner looking to maximise their income from their installation. It’s here a blockchain setup could offer a similar setup, but with additional flexibility.
The Centre of the Problem
In recent years we’ve seen the decentralisation of numerous industries, and the end result has been greater power put in the hands of individuals to offer services to a market, and for consumers to have more choice. The rise of ride-sharing apps like Uber, and accommodation platforms like Airbnb are key examples of this. The Australian energy sector is yet to see such a substantial decentralisation – but with the widespread integration of blockchain, it could.
Just as Uber and Airbnb have done, in future a solar blockchain network could allow users with excess solar energy to sell it on to others. This could be to family or friends, your neighbours, or strangers. In turn, for those who are yet to have a solar setup – or perhaps find their demand currently exceeds their solar supply – they could purchase from others. This structure wouldn’t outright need to replace the current way we can all source electricity from the grid. It would simply add more choice and could co-exist alongside the traditional grid.
How Close Are We to the Blockchain Era?
Although there’s strong potential for blockchain to be built into the Australian energy landscape, there are also many hurdles for it to clear before it becomes a mainstream presence. Just as someone is still able to use a traditional taxi service if they don’t wish to use a ride-sharing app, it’s true that the rise of ‘disruptors’ and disruption technology has generated numerous headaches for regulators. By no means does this make disruptors a bad thing, but it does mean creating the conditions for blockchain’s embrace isn’t just a case of flicking a switch.
But the exciting news is there’s already a substantial number of stakeholders in the sector who are keen to explore blockchain’s future. As well as pioneering businesses like Mojo Power and PowerLedger, the Australian Renewable Energy Agency (ARENA) and industry giant AGL have previously joined together to trial power-trading between neighbours using blockchain. The pieces of the puzzle are still coming together, but there’s no shortage of interested parties helping form the picture.
The Energy for Change
Ultimately, if done right, the implementation of new technology like a blockchain network could offer benefits to energy retailers, consumers, and the wider community altogether. The bottom line is it could drive down the waste of excess energy and up the income of retailers who could oversee their own blockchain networks, as well as solar owners who sell on their excess energy. For those yet to have a solar system, it could also offer them the opportunity to source their energy from a clean and green source directly. Blockchain won’t be in mass use tomorrow – but it’s certainly a building block for the future.
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