Founded by Abraham Cambridge in 2014, The Sun Exchange is based in South Africa where the company is working to address a huge gap in funding for solar projects. Today, their solution is helping to power factories, schools and wildlife. In this article, Cambridge details Sun Exchange’s experience with blockchain technology.
“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 centralised 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 centralised grids,” says Abraham Cambridge.
The mission of The Sun Exchange is to enable everyone to go solar – which the company refers to as ‘democratising energy’ – to help the planet transition into a clean energy economy of abundance. Through their online platform, The Sun Exchange connects investors of solar energy with receivers in rural areas. “Previously, solar panels were really exclusive to the upper- and- middle class. The technology ‘assumed’ you owned a home to put solar panels on, which excludes most people in the world. It also requires lot of money. With our solution, all types of people are able to invest in solar panels, which will power organisations in emerging markets,” he explains.
The company works with a company called Power Hive, which helps them to bring electricity to rural areas to power, for instance, the internet, water pumps, etc. Abraham foresees that the enhanced availability of energy in rural areas to power farm equipment and technology will help to keep young people from being forced to move to urban areas. “Rural communities in Kenya working with coffee need to travel to a local market and/or wholesaler to sell their produce, which requires significant time and effort. Through our grids, they will have internet access and can engage in e-commerce, arrange for the crops to be collected and arrange for better prices.”
The Sun Exchange uses a platform and digital wallets where investors can choose to finance solar cells. Solar energy is then purchased via mobile payments, which are converted to a local bitcoin exchange aligned with the Sun Exchange system. Local energy users lease solar panels provided by the company for 20 years, which they pay for through mobile payment systems, such as M-Pesa.
“From the different crypto currencies available, we chose Bitcoin, which was the most liquid (most used) crypto currency with the highest market capitalisation when we started. Bitcoin had first mover advantage and we do not see a point in switching now,” says Abraham.
Implementation and investment
“We do not do the installation ourselves, which means our solar project partners are important. Our investors are important as well – Alphabit for example, a cryptocurrency hedge fund, has invested over $500,000. Prior to this, we had tried for with more conventional investors which was challenging as it was difficult to explain what it was that we were trying to achieve. They didn’t understand cryptocurrency, the brilliance of it or why we were using it.”
In some countries in Africa, mentioning blockchain or bitcoin can be met with a critical response. However, this was not a problem for Sun Exchange, “Africa has always been looking for an African currency that is comparable to the Euro. Perhaps Bitcoin fulfills this role. It is not difficult to see why, as people are already familiar with using “virtual” currencies, like M-Pesa. Bitcoin is also cheaper and more secure than M-Pesa.”
The Sun Exchange is looking forward to taking advantage of hundreds of micro grids along Africa, and within other developing markets, for example in Moldova where they are targeting the agricultural sector together with the United Nations Development Programme.
For other initiatives considering blockchain technology, Abraham offers some advice, “There are so many different projects, and many are doing the same thing. Some are years away from realisation. Don’t get caught up with speculation about the future, focus on how the technology can be used now.”