Peer to Peer Solar Trading


Martin Oliver reports on an emerging trend to sell household solar power to businesses

 Traditionally, the supply of electricity has relied on power stations, poles and wiring. Now, ‘peer-to-peer solar trading’ enabling residential solar power to be transferred to businesses is emerging as a new contender for the energy dollar.

In recent years, ‘behind the meter’ power generation involving solar panels and batteries has becoming increasingly recognised as a decentralised alternative. In Australia, rooftop solar now represents 5.7 gigawatt-hours (gWh), and has been installed by 23 per cent of households. With today’s shift away from fossil fuels towards renewable energy, modern technology and computing are playing an important role.

In May 2016, in Perth, Western Australia, Jemma Green and Dave Martin launched PowerLedger to implement the innovative peer-to-peer power trading system. This new energy distribution system enables residential and commercial premises to trade solar power electricity without a middleman, other than Power Ledger taking a small cut per kilowatt-hour (kWh) traded.

Lacklustre feed-in tariff

At present, the best outcome for a solar household is to make use of its own home-generated electricity. Otherwise, this is sold back to the grid in exchange for a feed-in tariff that is often lacklustre, varying from  zero to 18 cents per kWh. Peer-to-peer trading has the advantages of improving solar’s financial viability, localising the power market, and cutting carbon emissions.

 Exchanges can occur within a building or across a wider distributed energy network. A landlord can use a distributed platform as a means of installing solar on the roof of a rental property, and receiving a portion of the financial benefit. PowerLedger’s system adds relevance to the energy grid, which is now under threat because of the availability of domestic battery storage that enables householders to go off-grid.

To track the quantity of solar power generated and consumed, PowerLedger has developed its own software. One issue is that participation requires a smart meter, which may be of concern in relation to microwave radiation exposure, fire risk, data privacy, surveillance, and vulnerability to hacking.

The way this fits together is complicated. In a simplified form, PowerLedger’s power trading software uses its own blockchain technology (a secure transaction system pioneered by cryptocurrency company Bitcoin). Unlike Bitcoin’s processing system, which is energy-intensive because of the computing power required, PowerLedger’s blockchain is far more energy efficient.

Payment in real time

Trading takes place with a unit of electricity called Sparkz, currently pegged at one cent. Sparkz are received by the seller into a digital wallet that can later be converted to Australian Dollars. The use of blockchain has the advantage of enabling payment transactions to take place in real-time.

Sparkz are backed by a unit known as a POWR Token, which can be bought in bulk from PowerLedger using a cryptocurrency such as Bitcoin, Ethereum, Ripple or Litecoin. When this was being written, a sale of POWR Tokens had just completed, with each token being valued at US 8.8 cents (AUD 11.2 cents). The use of globally accepted cryptocurrencies has the advantage of enabling the project to plug into overseas initiatives.

Trials have taken place in Fremantle and Busselton in Western Australia, and Auckland, NZ, and round of testing began in October this year with 200 Origin Energy customers, whose data will be anonymised and untraceable.

However, existing laws do not require power companies to allow peer-to-peer energy transfers that circumvent the power retailer, and retailers have little incentive to allow them. Regulatory change will probably be necessary before the PowerLedger trading model can take off properly.

PowerLedger is not the only company involved in this field.  Systems being developed overseas include: LO3 Energy and Grid+ (US), Powerpeers (Netherlands), WePower (Gibraltar), Solar DAO, MyBit (Switzerland), and Grid Singularity (Austria).




Martin Oliver is a writer and researcher based in Lismore, NSW.