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Brooklyn’s ‘Microgrid’ Did Its First Solar Energy Sale

Brooklyn Microgrid is trying to build a neighbor-to-neighbor green energy market using the Ethereum blockchain.

A Brooklyn company, Brooklyn Microgrid, is looking to make it effortless for neighbors to sell each other excess solar energy through a blockchain-verified system. And on Monday, the company facilitated its first transaction.

Two neighbors in the Park Slope neighborhood in Brooklyn, Robert Sauchelli and Eric Frumin, conducted their first energy transaction through the TransActive Grid (TAG), a platform jointly built by Lo3 Energy and Consensys Systems. They used US dollars.

Sauchelli, who doesn't have solar panels of his own, bought a portion of the energy that Frumin produced through solar panels on his roof. This may have been the first ever peer-to-peer energy transaction done through blockchain technology that we know of.

The blockchain, which is the same technology that underlies many digital currencies such as bitcoin, is an electronic ledger that records and cryptographically verifies all transactions in and out. TAG's reason for using Ethereum is because it creates infallible smart contracts that can't be altered down the line.

"This is one more step to making it more affordable to people who don't have a lot of money but want to be part of the solution."

While TAG's biggest selling point is in creating a local market for solar power, there's another perk too: you're more certain of where you're getting energy from. When you buy renewable energy now in the grid, you're buying a stake in the energy output of wind farms and solar plants that could be located across the country or, if you're in New York, miles upstate.

"You're not actually buying the electrons themselves. What they're really paying for is the energy attributes—the good things that happen when you put green energy into a community," said Lawrence Orsini, founder of Lo3 Energy.

But in the Microgrid's case, you're buying buying electrons that'll "very likely" be from your neighbor, Orsini said. It's in essence a rooftop-to-table relationship—a community-powered initiative that'll allow people without solar grids to full participants in a local green energy market.

Frumin's TAG panel verifies the transacted power and sends the transaction to the Ethereum blockchain to be fully verified. Image: Clinton Nguyen

"What's really nice about that is that it demonstrates that you don't have to have even a roof to participate in this," said Sauchelli. "You could be someone who lives in an apartment somewhere who has a meter and support green energy and local economic development."

Frumin says it eases the sticker shock of buying and getting a solar panel installed; the MicroGrid will open up a potential revenue stream for people who have excess solar power to sell.

Sauchelli, after he made his first transaction. Image: Clinton Nguyen

"For the next person making that leap, they have to decide whether or not most homeowners in this area—laying out 30 grand—how are they going to get that money back? This is one more step to making it more affordable to people who don't have a lot of money but want to be part of the solution," Frumin said.

TAG set the floor price for energy at 7 cents per kilowatt hour, but Orsini said that the price will fluctuate, as more demand rolls in. Excess energy is, as he said, a constrained resource. It'd likely be a seller's market.

But with one extra panel in someone's basement, you're that much closer to the idea of a free energy market. It's probably not what New York imagined when it deregulated electricity more than 15 years ago, but it's a start.