“Renewable Energy” and “Blockchain” are both common buzz-terms in the tech industry these days. While neither reached their maximum potential for disruption, both show great promise in tackling some of the biggest challenges we face today. And together, they may be unstoppable in causing paradigm shifts. That is what Brooklyn-based startup LO3 Energy is depending on, and right now, it is certainly looking like a great bet.
One Man’s Renewable Energy is Another Man’s Electricity
In 2012, while renovating his home, Michael Guerra, a Brooklyn real estate broker, decided to install 24 solar panels on the rooftop of his Park Slope residence. Tired of paying outrageous bills for air conditioning in the summer, Michael installed as many panels as the state of New York and his local utility would allow. It was not until four years later in 2016 that Michael would learn of another purpose that his solar panels could serve.
While on a nearby rooftop, Sasha Santiago of LO3 Energy spotted Michael’s panels. With the help of Google Earth, he soon found himself knocking on Michael’s door. Santiago cut to the chase and began explaining a pilot program that LO3 Energy was running. This program would allow people like Michael to sell their renewable energy directly to neighbors. Basically, Michael could start his own microgrid and become a sort of micro-utility for locals in the area. Not only could his solar panels cut down on those pesky air conditioning bills, but now they could actually earn him money.
“Oh, this is shared economy. This is Airbnb, this is Uber, this is 21st century…” – Michael Guerra
Taking the Middle Man Out of the Equation
Renewable energy has long been seen as humanity’s greatest hope to undo the damage done from fossil fuel usage. Technological advancements have not only reduced the costs of going solar, but have also resulted in numerous innovative devices to make it a more consistent power source (Powerwall 2, SolPad, SoulSource Sport). Now, people of all economic classes are seeing both financial and environmental benefits of getting their own solar system. When these systems produce more energy than the solar system owner uses, this electricity goes back into the electric grid, and owner gets paid for these unused kilowatt hours. This is where blockchain comes in.
Blockchain is a digital information ledger that allows for secure peer-to-peer financial transactions without the need for a bank or other financial institution to be present. This decentralized technology is responsible for the popularity growth of cryptocurrencies like Bitcoin. The possibilities with blockchain seem endless. It is already being used for medical record keeping, voting, contract signing, and even poker playing.
By utilizing blockchain’s strength of secure peer-to-peer transactions, the Brooklyn Microgrid forms an energy-sharing ecosystem and market place maintained by consumers. Users set their bid preferences through a phone app which then bids on local green energy made available from solar systems like the one on Michael Guerra’s roof. The winning bid receives environmental credits equivalent to a certain amount of electricity.
Power to the People
Picking Brooklyn as the location for their pilot program was a deliberate move by LO3 Energy. The Brooklyn community has always been progressive-thinking with regards to renewable energy. From a bird’s eye view, it would be easy to find a few buildings with rooftop solar systems in any neighborhood of this New York City borough.
LO3 Energy’s pilot program has resulted in 50 generation sites already. This has given the company confidence to move forward with a formal launch of the microgrid later this year. 300 households have already expressed interest in participating.
This is not only a huge step forward for renewable energy in New York City but also for the rest of the world. Both blockchain and renewable energy are sure to play integral roles in the cities of the future. Utilizing these technologies in this way not only supports a shared economy, but also instills a sense of autonomy and control in the local communities. When realizing this, one cannot help but feel optimistic that Duke University Economist Campbell Harvey described the Brooklyn Microgrid as “a glimpse of the future.”