Alex Miller envisions a future where people are generating their own rooftop electricity and selling it to their neighbors, who pay instantly. This cuts down on the wasted electricity losses from running electrons through miles of copper wire and it should be cheaper, for utilities not having to collect bad debts and pass them on to everyone else. And he wants to do it on the blockchain.
His company, split between East Williamsburg and San Francisco, is called Grid+ and it just raised an astonishing $29 million in a presale token launch, with plans to raise up to $60 million more in the token launch itself, which will take place on Oct. 30.
“We are building a next-generation utility,” Miller said by phone recently. “We want to enable individual generators on our grid to trade with one another and make a dynamic grid for electricity.”
— GridPlus 🦇🔊 (@gridplus) October 16, 2017
Grid+ thinks that, over time, it will be able to provide customers with electricity at about half the rate they’re paying for it now. The startup wants to do this by matching up small electricity producers, people or companies with solar panels on the roof, usually, and nearby customers and pairing them up with smart contracts on the blockchain.
Such a scenario will allow electricity to be consumed much closer to where it’s produced, Miller explains. One of the biggest expenses for utilities is simply the amount of electricity that’s lost by transmitting it across wires for miles and miles.
As more homeowners and commercial buildings add solar panels to their roofs, there is already an increasing power supply that’s distributed all over neighborhoods and cities around the country. Through Grid+, these small producers would be able to sell excess energy to their neighbors.
That peer-to-peer buying and selling is what made the blockchain such a valuable platform, said Miller.
“We do get some benefit from payment processing but in the long term it’s these peer-to-peer transactions,” he said, of the reason why the startup is based on the blockchain. “If two of our customers transact, the net cost of that to us is zero. By plugging into the Raiden Network any two of our customers can transact directly.”
Another benefit of being on the blockchain is that payment will be automatic and will come out of escrow. That means that one of the big losses utilities have to deal with, people who don’t pay their bills, won’t be an issue for Grid+ since all transactions will be debited to an account, like E-ZPass.
“They basically have to run a risk assessment and charge everyone a little bit more to correct for that risk,” Miller explained, of current utilities.
Another cost savings the company anticipates is administrative work.
“A lot of it is tracking stuff on Excel spreadsheets and dealing with payment processors and dealing with banks, sending out physical bills in the mail,” Miller explained.
Since the blockchain is sort of a huge open Excel that can automatically execute transactions, electricity sales seems like a particularly good use of it.
Still, Miller played down the blockchain part of the company on the phone. He wants the company to appeal to regular homeowners, who might not be familiar with the blockchain or cryptocurrency. Although the electricity will be for sale via cryptocurrency tokens called BOLT, Miller says the tokens will be stable to USD and users will not have to jump through hoops to buy what will essentially be energy credits.
“The idea is we don’t want people to have to know or care about cryptocurrency to use this,” he said.-30-