Whitepaper: Power of the Many; Towards a citizens’ driven energy transition through fractional ownership of solar parks
With pride, we present to you the Whitepaper Power to the Many; Towards a citizens’ driven energy transition through fractional ownership of solar parks. Established by the 2Tokens 'Power of the Many' consortium.
In chapter 2 we show that the European Union promotes to put citizens at the center of the energy transition. This happenes through the support of community energy, local ownership, and the transformation of energy consumers to prosumers. It is supported in The Netherlands in the Dutch Climate Agreement (Klimaatakkoord), in which the environmental and market parties agreed to ensure that renewable energy projects on land will work together on an equal footing in development, construction and operation. This translates into a balanced distribution of ownership in an area, aiming at 50% ownership of both production and offtake by citizens and companies in the proximity of a solar park or wind park from 2030 on.
Our solution is described in chapter 3. The Fractional Ownership for solar parks envisions the creation of an ecosystem in which solar panels belonging to a solar park are tokenized and owned by multiple investors. These tokens are initially offered by the asset manager. After a token has been sold for the first time, it can be traded among buyers and sellers. To do so, a platform where these kinds of transactions can be made is provided and a secondary (liquid) market for tokens is enabled
The use of panel-level data imbues property rights and live metadata tagging of green energy (Proof of Origin). This enables more democratic access to project finance opportunities for asset and off-take, thanks to the disruption of entry access barriers allowed by fractionalized ownership. This can boost individual and community ownership of solar parks. An open and decentralized digital platform for the energy sector provides the smart contract mechanism to store decentralized identities and their credentials, and facilitates on-chain verification and transactions between parties. This is detailed in chapter 4.
Chapter 5 focuses on the regulatory hurdles. A token represents rights attached to ownership of a solar panel. However, the possibilities to separate a solar panel from the solar park are limited. A solar park must act as a single legal entity to enter legal obligations such as land rights. Therefore, we propose the separation of legal and economic ownership. This means that a token represents economic ownership rather than legal ownership of a solar panel.
In the last chapter we describe the tests, minimal viable product, and future developments. To prove the feasibility of the project, we have implemented the fractional ownership model using the concepts and models described in this Whitepaper. A small rooftop solar site enabled the idea to go from a concept to an actual physical project. Currently, we expand the MVP to 200 panels on the rooftop of The Green Village in Delft to allows external investors to join in on the project. This will prove that the concept can be easily rolled out on a much larger scale as well. After outlining the need to accelerate the pace of the energy transition and the renewed role citizens must have to achieve this objective, we present the business case for fractional ownership of a solar park and tokenization of solar panels. Finally, we present a high-level overview of the Fractional Ownership Framework.
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