Access to energy is one of the major factors that drives business growth in any part of the world. Energy is essential for the economy, as it reduces the cost of doing business and unlocks economic potentials which, in turn, leads to the provision of job opportunities.
Africa is in dire need of energy. Only a small percentage of the African population, particularly, the urban areas, have access to electricity, and majority of them often experience incessant power outages. African factories often run at high costs, due to the lack of sustainable energy.
Renewable energy such as solar, has often been touted as a viable alternative to carbon-based energy in Africa.
For instance, most regions across the continent often experience bouts of sunlight that will be capable of yielding ten terawatts of clean energy. There is a great opportunity in Africa’s power sector and harnessing these natural resources to generate adequate power in order to potentially put an end to the power issues that have been ravaging the continent for decades.
But getting access to this clean energy has not been easy. There are myriads of problems that first need to be addressed. An obvious example is funding. One way to address these problems is turning to technology.
In an unusual application of the underlying technology behind digital currency –Blockchain, a South African startup, Sun Exchange, is already leveraging the decentralized nature of this technology to solve the funding problem.
Meet South African Based Renewable Energy Startup – Sun Exchange
South African based renewable energy startup, Sun Exchange, seeks to address the gap that exists between a solar project and the funding.
According to Abraham Cambridge, CEO of The Sun Exchange, getting access to solar energy is a challenge to users in remote areas, due to the high cost of centralised grids.
“Communities and industries in emerging markets, cannot access the required finance to invest in solar energy. With solar out of reach, these actors are forced to pay higher costs for polluting energy sources. Conventional sources of finance, such as centralized funds, are often only available to large scale projects – the impacts of which take a significant amount of time to trickle down and reach the local users. For remote farms, for instance, it could take decades to gain access to centralized grids”.
To address this problem, Sun Exchange seeks to achieve a planet that transitions to a clean energy economy of abundance, by providing an online platform that connects investors of solar energy with consumers in the rural area.
This platform settles the issue of non-inclusion by making it easy and possible for all types of investors to invest in solar panels which are leased to power organizations in the emerging market.
Investing in solar panels is a big game for both lower and middle-class investors. However, Sun Exchange has made this readily available to everyone, irrespective of location and status. The organisation similarly provides electricity to the rural areas which lack access to the central grids. End users of the solar panels lease the panels for 20 years, and make payments on a monthly basis.
Sun Exchange’s platform provides a digital wallet that gives an investor the liberty to choose a mode of transaction which is either via bitcoin or South African Rand.
The use of bitcoin as one of the means of transaction allows for micro payments and international remittance without exorbitant fees. The platform accurately records the electricity production of each panel, sells the energy generated to the consumers, and pays investors dividends on their Sun Exchange wallet. Sun exchange has members in 162 countries, and these members have equally invested in solar projects.
In August 2020, the startup raised a total of $4 million in its series A funding round, to further boost its services to other remote areas.
Blockchain can do much .more to drive access to renewable energy
Africa’s long-lasting power crises can become history, should the abundant natural resources in Africa be duly exploited with the aid of blockchain technology, in order to power the continent with renewable energy.
As seen in the case of energy financing, using the Sun Exchange platform, Blockchain offers a decentralized alternative to the current system of energy supply and distribution.
It equally possesses features that are capable of becoming an important component of grid modernization. Applying blockchain to the energy sector will ensure swift, frictionless, secure and transparent energy generation, distribution and trading.
This technology also finds relevance in the aspect of power that deals with grid transactions. Here, smart contract, an integral part of blockchain technology that automatically triggers the execution of transactions when all the conditions are met, can be used to eliminate the need for a third-party system between suppliers of power and consumers.