Park Slope/ Gowanus Microgrid Uses Blockchain for Solar Energy Exchange

As cities seek to create cleaner, more efficient energy systems, a key barrier will be an outdated business model: utilities provide a one-way flow of electricity and information to consumers, who have little knowledge of or power over where that energy comes from.

Recent challenges to that model have been gaining momentum, building on shifts in the regulatory environment and improvements in technology. Among these are demand response programs and the ability to sell renewable energy back to the grid, establishing a two-way interaction.

Other approaches remove utilities from transactions entirely; this approach is known as peer-to-peer energy exchange. Last month, a community microgrid in Brooklyn conducted the first peer-to-peer energy transaction in New York. The transaction was accomplished using blockchain — the revolutionary financial technology behind Bitcoin.

The TransActive Grid is a collection of five homes with solar panels and five without. When the homes with solar panels produce more energy than they need, they can sell the surplus to the neighbors through a secure blockchain ledger. The project is a joint venture between an innovative energy company, LO3 Energy, and a Bitcoin developer, ConsenSys.

This kind of peer-to-peer energy exchange could drastically alter the costs and benefits of investing in renewable energy infrastructure for homes and businesses, while opening up the door for others to opt for cleaner energy without the up-front costs of solar or wind turbine installation. The introduction of blockchain may make microgrids more realistic for cities by maintaining a secure data network to support exchanges outside of the traditional model.