SolarCoin: What it is, how it works and is it worth the hype?

SolarCoin is a cryptocurrency that was introduced in 2014 by a group of volunteers working together as the SolarCoin Foundation. The cryptocurrency was designed to accelerate the adoption of solar energy, leading to a clean energy economy.  

Technologically, SolarCoin is quite similar to cryptocurrencies like Bitcoin and Ethereum. It is blockchain-based, global, and decentralised. However, unlike most cryptocurrencies that can be mined, SolarCoin can only be earned by producing solar energy. SolarCoin’s underlying blockchain, the Energy Web Chain, keeps up with the sustainability narrative by using an energy-efficient proof-of-authority algorithm for verifying transactions.  

If you have solar panels installed at your property, at the time of writing, you could earn one SolarCoin for each megawatt-hour (MWh) of solar energy generated. SolarCoin claims that it will continue to offer free global solar energy incentives until the 2050s to accelerate solar energy uptake, leading to a cleaner and greener environment. 

Here’s how you could start earning SolarCoins for producing solar energy:

Step 1: Install a solar panel and start producing solar energy for your home.

Step 2: Register your solar system with SolarCoin through your energy monitoring portal or the website.

Step 3: Connect to the Energy Web Chain through MetaMask or any Ethereum-compatible wallet that supports Energy Web Chain. 

Step 4: Start receiving SolarCoins in your wallet

The initial grant you receive covers payments for the solar energy you’ve generated over the past five years. The subsequent grants are generally disbursed every six months during the life of the installation.

You can visit the SolarCoin website for the latest updates and detailed instructions on earning SolarCoins.

SolarCoin supports the purpose of clean energy uptake by acting as an incentive for solar energy users. The SolarCoins you earn could be used in three ways:

1. You could save SolarCoin as an investment.

Even though the value of one SolarCoin isn’t much at the moment, SolarCoin is a cryptocurrency and its price is highly volatile. It’s difficult to predict the value of SolarCoin in the future and whether it’s a good investment. Nevertheless, investing in solar energy has other benefits, such as cutting down your power bills and carbon footprint, which are probably far more compelling reasons to switch to solar.

2. You could trade SolarCoin for government-issued currencies

It’s possible to trade your SolarCoin for fiat or government-issued currencies (like dollars) on a crypto exchange like CarbonSwap. How much you could make by exchanging SolarCoin depends on its value at the time of exchange and how many coins you wish to exchange. 

Considering it’s generally not possible to purchase SolarCoin, and the slow earning rate, you may not have a significant number of coins to exchange, at least to begin with. 

SolarCoin Foundation offers one SolarCoin for every  1MWh of energy your solar system generates. According to an estimate on the YourHome website, 1kW of solar panels produces around 4kWh of electricity per day. Assuming there’s a 5kW system installed at your place, you’ll generate about 20kWh of solar energy per day. By this calculation, it’ll take about 50 days to generate 1MWh of power to earn one SolarCoin.

You could also exchange your SolarCoin for some other cryptocurrencies, like Bitcoin.

3. Spend SolarCoin at businesses that accept it

SolarCoin is a digital currency that could be used to pay for various products at businesses that accept it. However, the SolarCoin website doesn’t list any companies that accept SolarCoin as payment. You’ll need to contact the support team or carry out independent research to find a list of such businesses where you can use SolarCoin for payment.

Even though SolarCoin is backed by a broader mission of clean energy uptake, it’s difficult to say whether SolarCoin is a good investment.

At the time of writing, the value of SolarCoin is about $0.04, which is hardly enough to offset the costs of setting up a solar energy system. At its current price, it’s practically of no value to a crypto investor. But crypto prices are volatile and often driven by hype. The price of a crypto coin could suddenly skyrocket if a celebrity endorses it, and it can also fall just as quickly. SolarCoin claims to serve a good purpose, but it isn’t much different from other cryptocurrencies in terms of price volatility. Its value eventually depends on how many people accept it, and that number is relatively low at the moment.

If you plan to invest your money in SolarCoin or any other cryptocurrency, it could be worth learning about the risks of cryptocurrency trading. If you’re mainly looking for green investment options, buying solar panels for your home could be an idea worth considering. While purchasing solar panels isn’t exactly an investment in the conventional sense, it could save you money in the long run and help reduce your impact on the planet. You can also seek financing to fund your solar panels and benefit from low interest rates on green loans offered by some lenders, such as the Green Loan by Community First Credit Union.