Sun Exchange allows long-term direct investment in Solar Energy using Bitcoin

South African blockchain startup Sun Exchange has successfully raised US$1.6 million in seed capital for their new investment platform, which aims to provide solar power for the developing world by enabling global investments through bitcoin.

Initially launched in 2015 through crowdfunding, Sun Exchange is using blockchain technology to circumvent the chief barrier to affordable solar power, which is the initial financial cost. The company is enabling investors to purchase solar panels using bitcoin, among other currencies, which can then be rented to projects. The investors earn income as the solar panels they purchase produce power, and the company pays investors using bitcoin. Sun Exchange markets the solar panels for as little as $8 per unit, making the purchase extremely affordable.

“By breaking down solar panel ownership to a single cell we reduce the cost of going solar by two orders of magnitude and we’re utilizing empty roof space in some of the sunniest cities on the planet, such as Dubai and Johannesburg.”
— – Sun Exchange

Renters benefit as Sun Exchange installs the panels and they only pay for the energy generated, which is sold to them at a lower price than their local grid. All installation and contract management is taken care of by the Sun Exchange team.

Investors can expect to earn an ongoing rental income for the lifetime of each solar cell, with contracts up to 20 years. The company is also using their own blockchain for tracking ownership of each cell and all the energy and earnings produced by them. Renters and investors of each cell can use the company’s website to view their project’s energy performance and earnings in real time.

The solar cells have been installed and rented to wildlife centers, hospitals, factories, schools and rural communities in South Africa, and the company states that it has plans to expand them to locations in all emerging markets that are solar-rich but power-poor.

The first of the five projects offered to investors so far was a 15-kilowatt installation powering the Stellenbosch Waldorf School in Cape Town, South Africa. With 3,461 cells sold to investors around the world, for 105 ZAR (about $7.68), the estimated lease rental for each cell over the life of the contract was 284 ZAR (About $20.79). According to CEO Abraham Cambridge, after the first four months of operation, the solar output and earnings exceeded Sun Exchange’s estimates by 12%, giving its backers 12% more income for the period.

The company claims that the two main barriers to crowdfunding commercial solar projects are tracking energy and earnings over a long period of time, and transferring the earnings internationally with low fees. By using a blockchain to track the former, and bitcoin to solve the latter, Sun Exchange has made it possible for their projects to be funded by investors from around the globe.

Sun Exchange investors gain an additional benefit as the company has partnered up with the SolarCoin project. The SolarCoin (SLR) cryptocurrency exists as an incentive for solar energy producers, they receive one SLR for every megawatt-hour (1000 kWh) of solar electricity produced. Instead of mining SolarCoins with a Proof-of-Work hashing process like used in Bitcoin, this Proof-of-Stake blockchain is ‘mined’ when the solar panels convert sunlight into electricity.

Typically, signing up a solar facility is a time-consuming process for SLR miners, but at current market prices, each SLR is worth US$0.23 and the price will probably increase as more solar miners join the network. As Sun Exchange members earn their normal income, a second passive stream of income in the form of SLRs will be included. SLR can then be exchanged for other currencies at select cryptocurrency markets, the largest among them being Bittrex.