How and why we built an internet connected solar panel

Blockchains, meet internet of things

In the IDEO coLAB we’ve been working for over a year on making sense of blockchains. What will future businesses built on blockchains look like? How will they impact our everyday lives? In which industries will they have the most impact? How?

Something we’ve started to explore is the role blockchains can play in the internet of things. The fit feels natural, if slightly unclear. Blockchains offer a novel vision for how we might build the technical systems that support a world of many billions of internet-connected devices.

We don’t have to follow today’s dominant architecture of clients that depend on centralized servers. We can explore alternative decentralized architectures and open protocols that prevent trapping devices in silos and instead gives them device independence.

So what happens when you cross blockchains and internet of things? One outcome is buzzword overload. In the coLAB, we don’t like that very much. We like to make things tangible, and we learn what’s possible by building prototypes.

So we built a proof of concept solar panel kit that automatically creates renewable energy certificates as it generates power. Why energy? What are renewable energy certificates? Let us explain.

What are renewable energy credits and why do they exist?

The electricity grid is a network that delivers power generated by a few big power plants on one end to many households and businesses on the other end. This network looks like a tree, with power plants at the trunk and homes at the leaves. The shape of this tree hasn’t changed much in the 130 years since commercially available electricity became a thing.

There’s a lot of pressure for it to start changing. Renewable energy sources like photovoltaic solar are getting cheaper and cheaper, and renewable electricity generation lends itself to being distributed in a way that big fossil fuel burning power plants do not. Solar panels sit atop car dealerships, wind turbines next to supermarket distribution centers.

Renewables still only account for a small fraction of electricity generation. Dirty sources of electricity that produce carbon dioxide and contribute to climate change are still the primary way we get power. To accelerate the transition to renewables, US states have introduced measures that require utilities to have a certain percentage of the electricity they deliver (their portfolio) come from renewable resources.

This is where renewable energy certificates (RECs) come in. RECs are proof that one megawatt-hour (enough to power an average house for about a month) of renewable electricity was generated by someone and put onto the grid. Solar power plants (or in some cases small businesses with rooftop solar) can issue RECs and sell them to utilities who then “retire” them, or count them toward the renewable energy they’re required to deliver.

Today RECs are tracked electronically in proprietary, opaque, centralized databases, accessible only to large producers of electricity and utilities. Even as the photovoltaic hardware to generate energy in a more distributed way becomes cheaper and more widely available, the systems that let panel owners seamlessly create and sell RECs are still inaccessible.

Our prototype

In the coLAB we wanted to see if we could automate the real time generation of a REC using bleeding edge technology. This would make all the reporting, tracking, buying, and selling of RECs more efficient, accessible and transparent.

Working with coLAB member Nasdaq, and our friends at Filament, we set to work. Starting with light from the sun, let’s take a look at our prototype and see how it works.

The hardware

By 7:00 am, the sun in San Francisco has risen high enough to clear the Oakland hills and strikes our two solar panels. Photons from the sun loosen some electrons in a piece of silicon and those electrons flow through a circuit and out of the panel.

The panels put out a theoretical max of 200 watts, perfect for a first prototype because it’s an approximation of a residential scale solar installation but small enough to be convenient to move around and work with. At this scale we can power the laptops we work on, and it incorporates the major hardware elements of a typical system.

The next stop for those electrons is the charge controller. Weather is temperamental, with clouds and fog blocking the sun, and because of this the power output of the panels can shift and spike. The charge controller tames this output and delivers a consistent voltage and current to the battery, making sure it gets more when it’s low and gradually tapering off as it fills.

The battery is a 100 amp-hour lead acid battery, similar to what you’d find in a car. Fully charged, it’s enough to power 8 or so laptops for a workday. Just like a car, the battery puts out 12 volts direct current (DC).

To be usable by appliances, the 12 volt DC needs to be converted to 120 volt alternating current (AC). This is the job of the inverter. Two thick 6 gauge DC carrying cables go into the back of the inverter, and on the other side are two standard three prong outlets that we can plug anything into.

The data

So far, so good. We can power stuff with the sun. Now for the really cool part: we measure the real time production of power, and verifiably and securely share that data with Nasdaq. As current flows from the panels into the battery (via the charge controller) we divert some of it through a sensor that tells us how much is flowing. The sensor talks to a Filament Tap via usb, where the stream of power production data gets an identity and a secure onramp to the internet.

The Tap does a few important things. The Tap encrypts the data, attaching a digital identity to our system in the process. It also provides a long range mesh network that connects Taps together. We have two Taps, one attached to our solar panels, and another attached to a computer that acts as a gateway to the internet. In a bigger installation like at a solar power plant each panel might have a Filament Patch built in and the group would communicate via the long range mesh network. In a neighborhood, solar panels on different roofs might use the mesh network to ensure that there is always an upstream wifi connection to the internet even if any given home’s network goes down.

The market

The encrypted data is securely communicated through a websocket by the Filament Tap to Linq. Linq is a platform built by Nasdaq that lets people issue and trade financial assets. It’s like the big software systems that run existing exchanges (like the NYSE stock exchange or the NASDAQ exchange) but it uses an underlying blockchain to track the creation and ownership of assets. It also has a modern, REST API that makes it easy to define and issue new assets.

When the Tap data reaches the Nasdaq API, something special happens: the data turns into a financial asset, a renewable energy certificate deposited into the account of the solar panel owner. It’s proof that the panel owner created renewable electricity and put that electricity onto the grid, displacing dirty electricity from fossil fuel powered plants in the process. The panel owner can sell the certificate to a utility who will retire it and use it as proof for how much renewable energy went onto their grid.

Why automating the creation of energy certificates matters

Renewable energy certificates were created to incentivize utilities to source a minimum fraction of the electricity on their grid from renewable sources, even if they don’t generate the energy themselves. They’re intended to be an (admittedly imperfect) digital representation of generated energy. We make them work because they are limited to a few players, who all agree to play by the same rules, manually share information, and trade in the same, closed market. As electricity generated by solar power edges closer to being the same cost as fossil fuel derived electricity, something dramatic is going to happen.

The physical grid was designed for a time when power was created by a few large power plants burning fossil fuels and distributed to many consumers spread throughout a region. But solar doesn’t need to be centralized. It can be distributed throughout the region on rooftops. When this happens, the grid starts to look more like a scale free network. It will likely still have a few producers that supply significant power, but compared to today, it’ll have a long tail of many smaller producers that also generate substantial power.

When this day comes, it brings with it a big technology and accounting problem. If anyone can put energy into or take energy off of a grid at anytime, how do we keep track of it, how do we price it, how do we pay those who contribute, and how do we charge those who consume?

We don’t know the answer yet, but we think we have the pieces. If you squint, you can see how internet connected hardware, open protocols for identity and communication, digital assets, and blockchain based marketplaces with modern APIs all play a key role in this future. Our job now is to further bring it to life, one prototype at a time.