A Token Manifesto for Solar Energy

Barakatech, a company expert in creating blockchain and custom SaaS solutions for established industries, ranging from financial services to real estate, has released a White Paper proposing that token mechanisms are the key to enormously accelerating the transition to emission-free energy generation as the standard.
We're racing against time to control the build-up of atmospheric carbon. But scaling-up capacity for renewable energy sources, such as solar and wind power in order to reduce greenhouse gas emissions is a huge challenge requiring vast investment. In 2021, for the first time, wind and solar barely passed 10% of electricity power generation worldwide. Converting as much of the remaining 89.8% as quickly as possible will require new thinking and new systems.

To achieve this shared goal, governments and energy companies need to find affordable ways to finance the building of green energy power plants on a scale not yet seen. Barakatech's White Paper proposes blockchain technology and the tokenization of these renewable energy assets could offer a more efficient and community-inclusive model to raise new funds, while also offering a superior infrastructure to monitor and actively manage the emerging marketplace. This approach would mobilize a broader audience of 'retail investors' (i.e. average members of the public) to become the driving force of the green economy, offering them, as well as established energy industry companies, a framework for reliable investment income. Token holders could invest micro sums or tens of millions, but the operation of smart contracts linked to these tokens would assure fair earnings distribution based on pre-defined and regulated criteria. Likewise, the smart contracts can define energy pricing criteria in a flexible way based on algorithms that track the marketplace, protect consumers and ensure an equitable return for producers. The same technology can be used to enable the new energy sources to be distributed into existing grid networks, with the pricing model designed to smooth market assimilation and the interests of established energy providers. The role for current energy providers would evolve in this model as they become energy service platforms, integrating multiple energy sources, not just generating their own output.

Why tokens and not multiple share offerings?
Conventional stock markets and private equity markets would not be the most efficient way to raise funds for building solar energy capacity across very different scales, with enormously different types of location for the solar panels, diverse local market conditions and property holding structures. The tokenization of assets through blockchain technology can offer a more cost-effective, flexible, codable, and community-inclusive model. The established marketplace for digital tokens provides a welcoming environment for business model experimentation with minimal regulatory barriers to entry, making it more efficient for new solar facilities compared to traditional stock markets. Tokenization, rather than a continual series of public company IPOs, could mobilize a broader audience of retail investors to invest in local area renewable energy projects under defined conditions and offering reliable passive investment income. Token holders who would also be motivated by the idea of actively participating in the greening of their local economy. The mechanism established would allow rapid investment on a local and project-by-project basis, lower project finance costs, the tailoring of corporate structures to fit project circumstances and low transaction costs to participate or exit as an investor.
project finance costs, the tailoring of corporate structures to fit project circumstances and low transaction costs to participate or exit as an investor.

Multiple token models can be considered, but Barakatech highlights two asset-linked token models for raising investor funds, one based on the share of the individual panels, the other property-linked and based on the share of the plot. Both models enable small investors to enter the market as owners and provide an efficient and equitable basis for solar revenue distribution.

Tokenization can represent a transformative investment paradigm that can mobilize the public to become direct investors in these businesses allowing faster energy transformation. The technology tools described can create a lower cost business model, helping companies innovate and scale. This is also a 'community technology', bringing together companies, governments and the general public to achieve a critical common goal - clean energy as the community standard.

The purpose of the authors is not to outline an attractive theory as an academic exercise, but to find willing partners to establish a testbed, a 'sandbox application' to optimize system workings and demonstrate their commercial feasibility for wider use. Barakatech is calling for participants including a sustainable energy sponsor company, a financial sponsor and involvement of interested regulators in defining the model framework.

Press contact: Tuna Orbay, tuna@barakatech.com

1606 Cad. A-Blok Apt. No:4 A/202. Çankaya/Ankara/TURKEY

Barakatech is dedicated to making advanced technologies more accessible to every kind of business. Barakatech firsts include the first blockchain-based superapp in MENA, an award-winning municipal superapp, Turkey's first NIST certified remote KYC solution, and a full range of other advanced white label solutions. Baraktech is ranked in Turkey's top 20 most successful start-ups (Fast Company) and backed by a leading regional VC company (Bogazici Ventures).

This release was published on openPR.