This is the fifth post in the Electricity-Backed Currency blog series — check out the SolarCoin page to learn the basics and link to the first four posts in the series
Originally Published by Triple Pundit on June 12, 2014
SolarCoin rewards solar power producers. The early adopters of a technology that helps slow climate change and brings clean electric power to new people deserve a reward, right?
Well, sort of. Handing out digital cash to people with solar panels can benefit our electricity systems and the environment, but there are more equitable ways to incentivize clean energy.
New SolarCoins enter the online “money supply” when they’re granted to the residents of a property with a solar installation or to the owners of a large solar project. In essence, a new piece of electronic money is created and then given to someone who has enough money to own or lease a solar system.
SolarCoins offer a new source of income — and eventually wealth — that can be accessed most easily by those who already have plenty of income or wealth.
For people without solar panels or investments, on the other hand, the only way to get some of this newly created value is by exchanging another currency like dollars or Bitcoin for SolarCoin in an online currency exchange. As yet, there’s no way to turn dollars or any other national currency directly into SolarCoins; one must get bitcoins first and then trade for SolarCoins.
As SolarCoin scales up and increases in value — assuming that it does in fact become popular — opportunists, cryptocurrency fans, and clean energy advocates will earn income just by holding SolarCoins. Digital currencies are a means of exchange as money, yet in these early days they are more like assets than stable stores of value .
Yet access to SolarCoin, like so many of the most lucrative investment opportunities in today’s economy, is exclusive to those who are already at least somewhat well-off. SolarCoin grantees have a solar-paneled roof over their heads or an ownership stake in a solar project, pieces of capital that earn plenty of income just from electricity sales.
For those who do not have sufficient wealth or access to capital to become solar power producers, getting SolarCoins requires extra money with which to buy them. Those who must spend all their income on food, rent, cell phone service, electricity, transportation, heating fuel, and modern life’s other necessities don’t have cash lying around to turn into SolarCoins.
In addition, it takes some degree of technical competency to get your hands on any ‘cryptocurrency’ — even the widely popular Bitcoin. Exchanging bitcoins for SolarCoins requires further knowledge and training to navigate complex online currency markets like Bittrex, a site whose esoteric charts and unexplained tables appear quite foreign to someone not versed in trading currencies or assets on the web.
In short, wealthy people with leisure time have an distinct advantage in filling their digital wallets with SolarCoins. In a society where the vast income chasm separating high earners from the rest of us grows every year, introducing another instrument that make the rich richer deepens the problems that threaten capitalism instead of working toward fixing them.
Without mechanisms for extending access to the means of producing solar power to poor people neglected by the private banking system, SolarCoin speeds up the rate at which wealth concentrates among the fortunate few. Yet there are some promising developments that can counteract this troubling phenomenon.
The next post in the series — SolarCoin and social equity, part II — will explore existing and potential strategies that make SolarCoin accessible to everyone.