Solar Power Rocks logo

Solar Power Rocks - Clear info on home solar power rebates, tax credits, and other benefits

The blockchain might lower your electric bill by 38%

Avatar for Ben Zientara
Published on 01/17/2018 in
Updated 01/17/2018
Grid+ banner

Someday soon, your electric utility company could be… everyone else.

That’s the dream of a company called Grid+, which likes to imagine a future with an automated, distributed energy grid, where everyone produces, stores, consumes, and shares electricity; all run by the company’s smart devices and software, of course.

According to the company, this futuristic energy marketplace is a few years off, so for their first trick, they’re going to try something else: reducing your energy bill by more than one-third.

How Grid+ uses blockchain technology to lower your energy bill

If you haven’t heard of blockchain technology before, you should know it provides an ultra-secure, automated, low-cost way to conduct and keep record of transactions. The transaction history is recorded in a ledger that is kept by thousands of nodes at once, to ensure that everyone agrees on the transactions that have occurred.

The basic value proposition of Grid+ is to automate the buying and selling of electricity between their users and the operators that sell electricity on the wholesale market. They want to operate as an electric retailer in deregulated energy markets, reducing costs far below those of traditional retailers through the use of automation, among other things.

Wait, how does this all work?

OK, it’s time for a primer on electricity. In a traditional regulated utility environment, a single utility company is responsible for generating electricity, transmitting it over long distances, and serving it to all the customers in a specific geographic region.

Here’s how that looks:

Transmission, distribution, retail; electricity infrastructure

A utility company that operates like this is called a “vertically-integrated utility,” and most people in the U.S. are customers of these types of companies. Rules for vertically-integrated utilities are set by state Public Utilities Commissions, and govern every aspect of how the utility does business, from where it gets the power to how much it can charge customers.

If that’s the kind of place you live, Grid+ isn’t for you, yet. Their initial plan is to become an energy retailer (i.e., utility company) in deregulated energy markets, where competition between multiple retail providers occurs because the government mandates that separate entities are responsible for each step of the supply chain:

  • Generators make the electricity from various sources
  • Transmission companies maintain the infrastructure to deliver the electricity across distances
  • Retailers (aka “utilities”) buy electricity from generators, pay a fee for the transmission and distribution of that energy, and manage the sale of and billing for the electricity to customers.

It’s worth noting that even in states with deregulated energy markets, many to most people are still served by vertically-integrated companies. For example, many Texans (about 85% of the state) can buy electricity through the retailer of their choice, but places like El Paso are still served by vertically-integrated utility companies.

Here is a map of states with deregulated energy markets:

A map of deregulated energy markets

Image and more information at ElectricChoice.com

Electricity retailers in deregulated markets can charge whatever price they feel the market can bear, and to stay competitive, their prices need to be as good or better than other options. This is where Grid+ feels like they can make gains. The company plans to enter one of the states above this year (they haven’t said which), and sell electricity for much cheaper than other retailers.

The company points out that “only about 50% of the cost of retail electricity is used to pay for the electrical. The other half is tied up in administrative burden, marketing, and risk management associated with bad debts.” Grid+ thinks they can eliminate a substantial portion of the costs of running the utility in three ways: automating transactions using their proprietary hardware and software, requiring pre-payment for electricity through deposits made into their system, and reducing marketing costs (presumably because once everyone knows they get electricity much more cheaply with Grid+, they’ll flock to use the company’s services).

That’s actually pretty simple sounding, right? Not a huge revolution in how things work, but a refinement of the traditional retail model taking advantage of new technology to reduce costs. The question is: if you could lower your energy bills by one-third, would you sign up for pre-pay electrical service?

Now what if we told you you had to buy cryptocurrency to do it?

Wait, cryptocurrency?

Isn’t that the thing that’s subject to wild price fluctuations, and crazy uncertainty? Yep, it sure is; but don’t worry about losing your money, or even dealing with fluctuating prices.

The company’s special cryptocurrency, BOLT, based on the well-established Ethereum blockchain technology, is designed to be a “stable token,” that will always retain the same value in USD as it did when you bought it. And anyway, converting your dollars to BOLT is what makes the blockchain payment automation of the Grid+ system work.

The company assures users that their deposits will not only be safe and backed by Grid+ liquidity, but also that they’ll be protected from hackers and other bad actors. To make this all work, Grid+ has its customers install a small white blob with a cord and a keypad in their house. It’s called a “Grid+ Smart Agent.” Ah, there it is:

Grid+ Smart Agent prototype hardware

The Grid+ Smart Agent will act as a hub for the entire Grid+ lifestyle. Its simplest functionality is as a hardware wallet for cryptocurrency, allowing people to deposit money into their Grid+ account and buy the company’s special BOLT token for energy transactions.

The company is estimating it’ll sell the box for about $50, and once you set up an account with them, you’ll be buying cheap electricity with the best of them.

What Grid+ could mean for home solar

Having solar panels on your home saves you money by offsetting the cost of electricity you would buy from the utility company, but what happens if Grid+ really does bring down the cost of electricity for homeowners down by 38%? Well, it means that if you can sign up for Grid+, your home solar becomes 38% less cost-effective (even as your bill continues to dip).

Right now, solar beats the prices offered by energy retailers in almost every state in the country. The cost of installing solar are lower than ever before, and with the federal tax credit for solar running at full strength through 2019, solar is still an amazing deal.

The big revolution in the grid will come when solar plus battery storage for a home becomes cheaper than the cost of just transmitting electricity. That day will come sooner than you think, if you listen to the smart futurists around here.

Grid+ has a plan for when that happens, too, essentially turning that same Smart Agent into a smart energy trading machine. It’ll allow you to maximize your own usage of solar, selling to the grid when prices are high, powering your home when prices are low, and drawing extra power into the batteries when it’s economically effective.

We’re still a ways off from this utopian future, but what Grid+ envisions is a smartly-balanced energy grid where users of its products can gain an economic advantage by allowing the Smart Agent to proactively manage their home’s energy usage, saving potentially thousands of dollars doing so.

Here’s an example from their excellent whitepaper:

“Customers with energy storage can have their Smart Agent conduct temporal energy arbitrage and generate revenue. This can be done simply by buying electricity when it is cheap and selling it back or consuming it when energy is expensive. For example, if electricity is -$0.10/kWh from 6-8am (a price not inconceivable…) and +$0.25/kWh from 4-6pm, a savvy arbitrageur would be able to net +$0.35/kWh. For a Tesla Powerwall II , this would generate around $3.5 per day or $1,275 dollars per year, allowing the Powerwall to pay for itself within six years.”

What they’re saying there may sound ludicrous, but it’s true: nearly every day, electricity generators pay customers to use electricity, because they’re producing more than total demand, and shutting down and restarting a big power plant is expensive. The owner of a home battery could use the Grid+ Smart agent to take advantage of this by simply filling their battery at a time when they’re being paid to consume electricity, and use the stored energy to run their home when buying kWh would

Other blockchain-based energy concepts

To paraphrase Victor Hugo, an idea whose time has come doesn’t simply arise from a single source. The promise of P2P energy trading and revolutionizing the energy economy using smart software is too great to ignore, for people with the knowledge and connections to make something happen.

Other companies, like WePower and PowerLedger have developed similar concepts to Grid+, using blockchain technology to change the way people buy, use, and share electricity.

We’ll be covering these companies in the very near future, so keep an eye on this space for more.

Last modified: January 17, 2018

One thought on “The blockchain might lower your electric bill by 38%

  1. Avatar for JL JL says:

    I have 3.96 kw installed, no batteries. Just reading your info.

Have anything to add?

Your email address will not be published.


Subscribe to get solar news

The Federal Solar Tax Credit Has Stepped Down. It Steps Down Again In:

Days
2
1
9
Hours
1
6
Minutes
4
7
Seconds
5
2
Learn more about the Federal Solar Tax Credit before it goes away.

Solar Power Rocks is a Wave Solar company

Wave Solar Logo