Power Brokers

There an interesting article at PRI about a startup promoting a model for home solar power that’s either competitive with Tesla’s vision or complementary to it, depending on how you look at it:

The green trend these days is to go local — and if urbanites can source everything from veggies to craft beer in their neighborhoods, why not solar energy?

LO3 Energy, a New York-based startup, is working on one way to do so. Its project, Brooklyn Microgrid, aims to help electricity users buy energy from their energy-producing neighbors, using smart meters and an app.

“Brooklyn Microgrid is the idea that we can now allow peer-to-peer transactions of energy and energy attributes across the grid,” says Scott Kessler, director of business development at LO3 Energy. “So, if you’re producing via solar panels, via wind, whatever energy-generation resource you might have, you can now actually transact with your neighbor,” keeping the energy’s environmental and economic impact in the community.

Kessler says about 60 microgrid meters have already been installed at energy-producing buildings across Brooklyn, and around 350 people have signed up to participate. The project doesn’t involve rewiring the physical grid, he explains; it just tweaks how electricity is bought and sold. “So, it’s really just a new form of settlements among people,” he says.

The new project relies on blockchain — the same secure digital ledger used in cryptocurrencies like bitcoin. In its pilot phase, neighbors traded test versions of renewable-energy credits, according to The New York Times. Now, Kessler says, the team is working with regulators to define how electricity can legally be traded through the microgrid in the future.

“We’re not a utility, we’re not a generator, and we’re not really an energy retailer,” Kessler says. “So, how do we fit in, and how can we start to trade energy legally while still providing all the protections that folks on the electric grid are accustomed to?”

If I understand what they’re doing, they’re actually brokering electrical power among the participants.

The article raises all sorts of questions for me. Clearly, such a scheme would change the economics of installing solar panels. In any given city block how many producers would be needed to satisfy the ordinary electrical demands of pure consumers during daylight hours? My back-of-the-envelope calculation suggests about 1 to 1 although if more efficient solar panels start coming down the pike that could be improved upon.

There are other advantages, as mentioned in the article. For example, areas in which such a system were deployed would be more resilient than those without.

Another question: how would this arrangement be regulated and taxed? Don’t imagine that cities will be willing to give up the electricity tax revenues they’re realizing now.