open & smart solar financing:

Puerto Rico’s public schools and emergency shelters

We are designing an integrated system of robust and affordable public financing for solar infrastructure. Our blockchain and hardware engineering, and field efforts, are geared to consolidate a model to transform all of Puerto Rico’s public schools into solar-power emergency shelters.

Puerto Rico emergency and opportunity

One year after hurricane Maria hit the island, schools are still exposed to a centralized and high-carbon energy system vulnerable to climate impacts. At the same time, most schools are becoming grass roots community centers facilitating discussions of concerned parents on how to increase climate & social resilience in the whole community. The Puerto Rican (PR) government and the department of education are working to appoint schools as emergency shelters —nodes with robust energy and communication systems— for the community to reach out in the event of unavoidable climate shocks. Financing is a key gap. The American Red Cross has allocated a grant to the PR dept of education that will cover 100 schools. We believe the system and model we are developing could provide secure and novel financing for the solar reconversion of the other 700 public schools in the island, delivering a substantial cost-saving in the education budget. In the process, we seek to introduce an new open source platform to structure peer-to-peer solar finance and payments, replacing the now outdated power payment agreement (PPA) model for residential and commercial solar, with an adaptive and data-driven pay-to-own model.

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Architecting a Municipal Smart Solar Bond

The initial financial investment model considered here is through the issuance of a municipality bond as the debt instrument. The issuer and end-user —in this case the Puerto Rico Department of Education— issues the bond through a blockchain-enabled platform (eg. neighborly), and investors cover the principal (i.e. capex) of the solar system. Our smart solar contract will then organise bidding processes with contractors (i.e. solar developers), pay out contractors, inform when the system is 'live,' and orchestrate tariff-based payments.

We seek to develop a model where impact investors can finance solar systems around the world with several layers to de-risk their investment and certify the project's social and environmental value. End users should receive solar arrays with no down-payment, pay for the energy per kWh —just like they do with current utilities, but once they pay off the cost of the system plus a low interest (i.e. a return to investors), they fully and legally own the system.

IoT sensor data stream for smart solar contract

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Different layers of IoT energy monitoring devices informs of the energy generated by the solar system and the energy consumed by the end-user. This energy data, that will eventually use an intermediary oracle, activates payment transactions per kWh at a specified tariff rate and at specific intervals. Energy payment transactions occur between the end-users wallet/account and a main escrow smart contract that accrues the funds and issues payment of interests (i.e. coupons) to investors. Once the accrued funds can cover the original principle, the contracts pays off investors and the bonds matures.

Proof-of-concepts to date, roadmap and project endorsements

Our team has successfully deployed a 1kW solar array in our partner school and community in Aibonito, Puerto Rico. These assets were sized to power our data sensors and the school’s admin building since the headmaster’s office holds critical emergency loads like a telecommunication system for first responders. The system and its IoT data is directly connecting to the Ethereum test-network and simulating payments through an architecture of smart solar contracts already in place. Both the Yale and MIT hardware and software engineering teams hold weekly meetings and development sprints with different partner organisations to advance platform integration. Our roadmap seeks to successfully deploy a full pilot project to install a 30kW system in the school by early 2019. This pilot would use a first full version of the municipal smart solar bond. With a successful pilot project, we will be presenting a project finance document for the reconversion of 700 public schools. The project has ongoing endorsement from the Puerto Rico government innovation office and secretary of education

A roadmap to finance solar systems for 700 of Puerto Rico’s public schools

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Researchers and Collaborators