Researchers from Canada’s Western University have introduced an innovative open-source, blockchain-based virtual utility designed to facilitate peer-to-peer (P2P) solar energy trading. This novel system, named SolarXchange, enables photovoltaic (PV) users to trade solar energy autonomously using smart contracts. The technology promises substantial cost savings, potentially reaching up to $1,600 annually for ten households in simulated scenarios, and offers a more resilient approach to energy distribution.
The research team at Western University developed this system to monitor PV users and streamline P2P energy exchanges. Their SolarXchange platform employs blockchain technology to automatically generate smart contracts, which then handle transactions between users on an hourly basis. The team expressed a strong interest in collaborating with progressive electric utilities that are open to embracing distributed solar generation and P2P exchanges. They believe that such collaborations could contribute significantly to creating a more resilient and efficient electric grid.
The academics highlighted that utilities willing to adopt distributed generation have various business models at their disposal, with P2P solar electricity trading being one of the most promising. They noted that traditional billing systems, designed for centralized power production, require a new approach tailored to distributed generation. Blockchain technology, they suggested, offers a secure and efficient method for handling these transactions, making it a viable solution for the new billing and trading needs in a decentralized energy market.
The virtual utility developed by the researchers is structured around two levels of smart contracts, written in Solidity, a widely used programming language for smart contracts. In the context of blockchain, smart contracts are automated codes that execute specific tasks once predefined conditions are met. At the first level, each participating household operates under a House contract, which outlines the general state of the user’s PV generation and energy demand. At the second level, a HouseFactory contract is managed by the virtual utility, which aggregates information from the first-level contracts, monitors the energy demand and production of individual homes, and determines when energy exchanges should occur.
The researchers conducted unit tests for each method within the contracts, using Solidity to evaluate gas usage and associated costs. They clarified that the term “gas” in this context refers to the unit of measurement for transaction fees and computational costs, not to natural gas. The total cost of deploying these contracts was assessed by migrating them onto a local Truffle blockchain, where gas usage and cost information were retrieved from terminal outputs.
Following the successful testing of the blockchain functions, the team developed a JavaScript simulation to apply these contracts to actual load and PV generation data over a one-year period, with evaluations conducted on an hourly basis. The simulation included two scenarios, both involving ten homes and real electricity data from New York City. The first scenario, termed “True Peers,” envisioned a mature system in which all the houses are prosumers—households that both produce and consume solar energy.
The second scenario, “Intermittent Transition,” featured a more diverse mix of households with varying levels of PV capacity. In this case, one-quarter of the homes had double the PV capacity needed for self-consumption, representing households with large, unshaded rooftops. Another quarter of the homes had PV systems designed to match their annual energy load, reflecting typical rooftop PV installations that take advantage of net metering rates. The third group included homes with only half the necessary PV capacity, representing smaller or less optimally positioned properties. Finally, the remaining quarter consisted of homes without any PV capacity, either due to shading, lack of available space, or insufficient capital to invest in PV systems.
The results of these simulations were promising. In the True Peers scenario, the households engaged in 521 kWh of energy exchanges, resulting in annual cost savings of $70.78 under a time-of-use (ToU) rate structure. The Intermittent Transition scenario, with its greater variability in PV production, led to 11,478 kWh of energy exchanges and net savings of $1,599.24 under the same ToU structure.
The researchers concluded that the increased variability in PV production significantly boosted both the frequency of energy exchanges and the corresponding cost savings. They emphasized that the goal of their research was to demonstrate the feasibility of creating a gas-efficient P2P virtual net metering system that requires minimal maintenance while still providing financial benefits to users. The system, they noted, makes PV ownership and participation in a P2P network more accessible, with benefits extending to both PV owners and non-owners, as evidenced by the Intermittent Transition scenario.
The researchers suggested that utilities could play a central role in the proposed system by adopting the virtual utility model to streamline the P2P process. Their system and findings were detailed in the paper titled “Using a Ledger to Facilitate Autonomous Peer-to-Peer Virtual Net Metering of Solar Photovoltaic Distributed Generation,” recently published in Solar Energy Advances.