One prominent theme of the ICO markets in 2017 has been the energy sector, within which we have already written about both Grid+ and WePower. Solar Bankers is another renewable energy company proposing to facilitate the emergence of a p2p energy trading grid for locally produced energy, built around the company’s existing portfolio of solar product prototypes employing its proprietary, patented thin film solar technology. Solar Banker claims they will launch their token, SunCoin, on the SkyLedger blockchain–a new blockchain that will employ a modified consensus algorithm termed Obelisk that is suggested to enable rapid, secure, and free transactions. The ICO, underway through late December, will attempt to raise up to $300 million to enable to the company to develop its smart meter technology and microgrid systems, and to create a token reserve to incentivize potential manufacturing partners.
What is the Project?
Solar Bankers proposal is built upon three core features. At the foundational level, the company’s patented nano-structured film technology will allow a new generation of solar products to be developed, ranging from solar panels to solar windows to roof tiles and even “light recycling” products for interior use that it claims can reduce energy bills by 15%. These devices, described as cheaply manufactured, self-cleaning and capable of producing some of the least expensive renewable energy in the market, would allow a variety of options for low-cost, localized energy production.
Solar Bankers smart grid technology will allow producers, consumers, and prosumers to exchange locally produced renewable energy using SunCoins. Accumulations of SunCoins, in turn, will be redeemable for additional Solar Banker’s manufactured products, although this option will only become available once an operating manufacturing facility has been established.
Finally, the team claims it will use a new blockchain called Skyledger to facilitate transactions within the network. Skyledger is based on Skycoin, a distributed ledger under development in Github since early 2015 and launched this year. The Skycoin white paper (separate from the Solar Banker’s white paper) describes a new distributed consensus algorithm, Obelisk, described as a “web of trust” that addresses the tendency towards security centralization its creators consider present in both proof-of-stake and proof-of-work consensus mechanisms. Each node within the SkyLedger will operate a public, independent blockchain that can be verified by other nodes within the system. In the proposed Solarbankers architecture, each smart meter would be a separate node in the network.
Solar Bankers has indicated this blockchain will be without fees and faster, more sustainable, and more secure than both Bitcoin and Ethereum, and will present a unique advantage to Solar Bankers’ energy network operating on the platform. In terms of its own network, nodes within the Solar Bankers system will be either passive, such as wallets loaded with coins that are disbursed as energy is purchased, or active such as producers who will receive coins as their energy is sold within the network. However, the relationship between the two projects (Skycoin and Solar Bankers) is somewhat unclear.
What is the Token Being Sold?
Solar Bankers ICO will involve the sale of 97 million SunCoins, and likely add a further 12 million tokens remaining unsold from the presale, where only 6.2 million of the planned 18 million tokens were sold. ICO prices will pass through four tiers with prices escalating from an initial $2.16 per token up to the final tranche at $3.6 per token. If all tokens are sold, averaged across the four tier prices, Solar Bankers would raise approximately $312 million at current BTC prices.
Of the 300 million total supply of SunCoins, 38% are being sold between the sale and presale, with a further 38% reserved for incentives to attract a potential manufacturing partner. 17% are reserved for the team, with the final 5% and 2% reserved for the bounty and bug programs, respectively.
Solar Bankers will use the ICO proceeds primarily to develop its smart meters and micro-grids, with 60% of funds raised allocated to those purposes. 20% of proceeds will be allocated to marketing, and legal and project management costs absorbing the final 20%.
What is the Project Status?
Solar Bankers’ technology has been under development for a number of years. Originally based in Arizona, US, the project has recently relocated to Singapore, where it is now registered. The company claims its solar products have been tested by Germany’s Fraunhofer Institute, and have been certified for 25 years of durability. A number of patents, held personally by Solar Bankers’ CEO, have also been acquired, though we have not verified these in the US patent database. Establishing a manufacturing facility or partnership with a manufacturer is the largest challenge remaining for the films. Other technology, such as their smart meters, remain to be developed and no exact roadmap has been put forward. In terms of future timelines, Solar Bankers indicates it plans to spend 2018 focusing on test projects in Dubai, Turkey, and China, presumably while the technology and manufacturing is developed in parallel.
In terms of the underlying blockchain, Suncoin claims to be launching on Skyledger, which is related to Skycoin. Skycoin has been under development in Github since early 2015. There is a running instance of Skycoin, with an active explorer. web client, and desktop wallets, and a traded token. It has its own community and blog, which doesn’t mention Solar Bankers or Suncoin. The Suncoin github is a copy of Skycoin’s github as of five months ago, and includes copies of Skycoin wallets and nodes. Suncoin’s github has remained inactive since September and doesn’t appear to share primary contributors with the Skycoin repository. However, the Skyledger website, which is associated with Skycoin’s Github, does mention Suncoin. Suncoin also has its own blockchain explorer, active since May 2017.
It would be helpful to the community if Suncoin and Skycoin could clarify their relationship.
A Bustling Market Sector
Renewables have attracted considerable attention within the ICO space, and a number of strong competitors have recently emerged. Projects endeavoring to support the growth of renewables, to develop p2p energy trading capabilities, and to offer consumers savings through the incorporation of blockchain tech include, amongst others, Grid+, WePower, and Power Ledger. Despite this competition, Solar Banker’s novel path of incorporating patented solar tech into the development of custom hardware, in addition to the new blockchain upon which its system have been developed, potentially represent a plausible strategy for success.
However, both aspects of its novel approach carry imposing challenges. First, it’s not clear the Suncoin blockchain is being vetted or supported by the primary Skycoin team. The risk of flaws or weaknesses being identified could represent a hurdle to Solar Bankers’ own development. Second, in terms of manufacturing custom hardware, the company faces both the suite of normal technological risks as well as the perennial challenge confronting cleantech startups, that of transitioning their ideas to the development and manufacturing stage. In this regard, it must be noted that Solar Bankers’ strategy of reserving 38% of the token supply to incentivize manufacturing is a very clever approach towards incentivizing production companies to enter some sort of joint venture without needing significant upfront (fiat) capital. That said, the devil is in the details, as always, and the challenges of actually bringing this approach to fruition and creating a manufacturing partnership may ultimately prove challenging. Delays in reaching a manufacturing partnership could slow progress on the device production and would represent a significant impediment to the development of the network within with what is already emerging as a competitive sector.
Compounding the challenges confronting Solar Bankers are the details of its ICO, specifically both its targeted raise amount and valuation, each of which appears rather aggressive relative to peer companies. As the above chart illustrates, energy-focused raises in the $25 -$40 million range have found a supportive market, with valuations of those ranges falling between $60 and $190 million. Solar Bankers is attempting to raise a far higher amount at a vastly greater valuation–the max raise could exceed $300 million by our calculations, with the valuation potentially exceeding $800 million. This valuation would also support a $300 million token reserve for a potential manufacturing partner, but this is in effect asking ICO participants to fund an undetermined manufacturing agreement with an unidentified partner. Given that Solar Bankers only sold one-third of allocated tokens during the presale, when the token price was considerably lower than the ICO price, we have also estimated the raise amount with a scenario of the company selling only one quarter of proposed tokens, which would still amount to around a $75 million raise at a valuation approximating $750 million. In either case, market reactions to such a proposal will be worth observing. Overall, despite some appealing aspects of the project, and more general attitudes towards solar and renewables that are turning positive, there are nevertheless serious reasons to harbor doubts about the feasibility of Solar Bankers’ ambitions within a competitive market sector. Perhaps most relevant is whether a proposed ICO at these valuations will be well received given the numerous uncertainties related to the project.
The Solar Bankers Team
Solar Bankers is led by founder and CEO Alfred Jost, an entrepreneur and former investment banker who also owns the patents supporting the company’s technology. CTO Carlo Maragliano, holder of a Ph.D from the Masdar Institute in the United Arab Emirates, is an electrical engineer with a decade of experience in the solar field. COO Dana Duncan holds an MBA and has 20 years of international experience in manufacturing and finance, much of that related to solar projects internationally.
|Team openness||Fully transparent|
|Blockchain Developer||Brandon Smietana|
|Technical White Paper||Non-technical whitepaper available|
|Available Project Code||Not available|
|Role of token||Access rights|
|Token supply||300 million|
|Distributed in ICO||115 million|
|Emission rate||No new coins created|
|Consensus method||“Web of Trust”|
|Sale period||November 22nd, 2017 to December 31th, 2017|
|First price||proportional to participation|
|Accepted currencies||ETH, BTC|
|Investment Round||First public offering|
|Token distribution date||4 weeks after crowdsale|
|Min investment goal||no minimum|
|Max investment cap||$312 million|
|How are funds held||Smart contract|
|Minimal Viable Product||Q4 2017|
|Bonus schedule||4 Tiers, $2.16 to $3.60, by date|