Can solar crypto mining kick off green revolution? Over the years, people have found that accessing crypto currencies like Bitcoin, Ether and others is quite easy and it can be done in several ways such as trading them, investing in them, and even mining them.
With more and more people getting involved in crypto-related activities, the impact on the environment has also increased negatively.
Typically, crypto mining consumes a lot of resources and power which increases carbon emissions and e-waste that harms the environment and the living conditions.
Quite naturally, countries, governments, and societies are becoming increasingly aware of the massive negative consequences of crypto mining and are looking for other alternatives to power up the crypto mining rigs.
This, most people think, will kick off the green revolution.
Whether or not it really will is a matter of debate which is what this article will look into.
In this article, you will find everything that is important to know about green crypto mining including the problems, risks and space issues, tax implications, economic aspects and lots more.
There is no doubt that change is happening in the crypto field though very slowly.
One of these useful technologies is rooftop solar which is often overlooked in other industries.
- Can Solar Crypto Mining Kick off the Green Revolution?
- Problems with Net Metering
- Economic Sense
- Roof Space Conundrum
- Tax Implications
- Investors Perspective
- Paying Off the Cost of the Solar Systems
- Boon to Cities
- Carbon Neutrality
- Incentivizing the Investors
- Inexpensive Power
- Crypto Prices and Mining Cost
Can Solar Crypto Mining Kick off the Green Revolution?
Crypto mining is an expensive and complex activity where the miners need to pay quite a lot of money for the mining rigs that come with a lot of processing power.
These rigs themselves consume a huge quantity of electricity which makes the process even more expensive.
Making profits in crypto mining therefore needs a careful balancing act between the operational cost and the number of coins that can be generated in the process.
The fact that the mining operations for crypto coins such as Bitcoin and other leading digital currencies available in the market today can consume electrical energy that is equivalent to the needs of a small country is quite worrying.
It calls for the crypto miners to be more careful in order to make sure that they are not spending more on electricity than the profits they are making from the mining process in return.
It is for all these reasons, the individual crypto miners as well as mining companies are looking for setting up mining rigs that operate with solar power.
Few of them have even set up their crypto mining facilities in the deserts where sunshine is available in plenty.
This reduces the mining costs and increases the profits from the crypto mining process.
There is a high probability that crypto mining using renewable energy will start a green revolution soon, and there are enough signs of it as of now.
And, this is a report based on a survey conducted in 2019!
Solar power can also be used for crypto mining easily and feasibly and in most cases the costs involved are not sky-high.
This is because you can use the existing infrastructure.
If you can set it up properly, it will fit in perfectly within the distributed model of crypto.
Using solar power offers the promise of a greener crypto ecosystem.
These rooftop solar panels produce energy that is green and free of carbon. Production of energy is constant, but only when the sun shines bright.
At nights or when clouds come out energy production is inconsistent since the solar panels stop producing power.
This is a significant issue of using solar power but this does not stop people from using it because this issue can be mitigated easily by the users of solar energy by taking advantage of a procedure called net metering, which is explained in the next section of this article.
Problems with Net Metering
Net metering is a process when power is drawn from the traditional grids at nights or during overcast conditions which sets their electric meter on once again.
However, when the condition is bright and sunny, the solar panel produces excess power which is sent back to the grid which makes the meters spin backwards.
This means that at the end of the month the users only pay for the net amount of electricity used by them during the month.
That is, if they use 1100 Kilowatt Hours or kWh of power but produce 1000 kWh in a month, they will need to pay for the additional 100 kWh of power as their net usage.
The good thing about net metering is that it allows the users to power their homes around the clock without needing to use a bulky battery and spend on its installation.
The traditional power grid itself acts as a giant battery that supplies them with the required energy to keep their appliances running when the solar panels are not generating any power.
However, net metering also comes with a few problems. Just like any other utility, it too phases out or is limited.
The rate can be terrible if excess power is generated than what is required to run the homes or businesses.
While selling surplus power to the grid back is quite sensible economically but, on a second look, it is also quite wasteful.
According to a report of a leading solar installer Sunrun, in the United States the size of a standard solar system is 6.62 KW which is enough to supply the power needed by most of the American homes that use about 9,000 kWh of power per year.
When the meter spins below zero, things might change pretty fast.
The rates offered can be a pittance. It is for this reason people tend to install only the required number of solar panels to meet their actual power needs.
In this case, producing more power will not help because you will be compelled to sell back the surplus energy to the utility at a financial loss.
Roof Space Conundrum
There are lots of homes and offices in America that have a lot of roof space where they could install more solar panels.
However, these are not installed by them because it will produce surplus energy which the users will have nothing to do with.
This means that there is a lot of valuable roof space that is wasted being left unused.
It is for this reason most American homes and businesses took an entirely different approach.
They now do not size their solar systems to meet the energy requirements for their personal use and nothing more in their homes and offices.
Instead, they install more panels to optimize the space available on their roofs and produce surplus power.
This additional power generated is used by them to mine crypto coins.
This specific type of approach will not only increase the utilization of the available and unused roof space to the maximum for generating solar power but will also facilitate in making crypto mining greener.
This, in turn, enables the property owners to earn more revenue.
However, the number of panels to install and the available sun hours should be balanced because anything excess or unused will result in a loss.
When you know the near-exact estimate of solar potential you will be able to make the maximum use of every square feet of your roof to generate the maximum possible and usable energy.
You can either sell off the excess power to a grid or plug in your solar panel with a dedicated miner and mine crypto coins.
All through the day, weeks, months and year it will burn the excess power and in turn allow you to make additional profits, which, mind you, can be significant depending on the type of new crypto coin you are mining.
Depending on the value of the coin you are mining and the cost of your mining equipment as well as the mining potential of the miner, you can break even within a couple of years!
After that, it will be profit, and profit only.
Remember, you will not have to pay for the huge cost of electricity involved in crypto mining if you use solar power.
And, given the fact that an average solar panel lasts for more than 25 years, you will earn such ‘pure’ profit until the time your solar panel wears out.
On the contrary, if you had sold the excess power to your utility you would have earned just a small portion of the potential earnings from crypto mining if you used the extra power for it.
Therefore, utilizing your roof space to the maximum and then using the surplus energy produced to mine crypto rather than selling it back to the grid is a prudent decision and a sure winner.
There are however a few risks involved in moving to solar crypto mining that you should keep in mind before you make a decision.
First of all, you will need to get an approval from your utility for connecting your solar panel to their grid.
The risk here is that they may not give approval to your solar system if it generates a lot of excess power than your home or office has actually used in the past few months.
In order to justify your solar power system and that you use enough power you will need to start mining crypto coins probably with an Antminer at first by using grid power for that.
Now, with that comes another risk which is that the value of the Antminer may decrease over time.
In order to keep this profitable, you would need to replace it after every 3 to 5 years.
However, depending on the specific model of Antminer, such as the Antminer S19, it may even increase in value rather than decrease.
Apart from that, there is also a significant risk of the price of the crypto coin falling drastically, which is a commonplace in the crypto space.
Therefore, you should not make your profit estimates based on the current price of crypto coins but look at the possibilities of the price falling in the future.
If you do so and if the price of the specific crypto coins you are mining falls dramatically in the future, it will take a lot of time for your system to pay off, instead of breaking even in a couple of years.
Since crypto coins are extremely volatile, you should always create a hedge against the price falling significantly while using your surplus solar power.
You can do it in different ways such as switching to electric appliances instead of those operating in gas or even buying an electric car.
However, all is not bad when you use solar crypto mining. One of the most significant benefits lies in the terms of taxes among others.
When you use solar power or solar systems, you may even qualify for Federal tax benefits until 2024.
This can be up to 26%. This will help you to keep the cost of your solar system even lower.
However, it is always better to consult a tax professional to get updated information and proper advice on your taxes.
This is because there may be some complex calculations involved in it, especially when you typically sell off your surplus solar power back to the grid or use net metering.
Considering things from the point of view of investors and the benefits of solar crypto mining, it might be prospective for an investor to buy a property in a sunny part of the country, preferably in an inexpensive area.
It will prove to be more profitable for the investor if solar panels on the roof of the property are put up.
However, if you intend to buy such a property make sure that the building has enough roof capacity to set up quite a number of solar panels with a power of producing energy in excess of 20 Kilowatts preferably.
Even if the cost of the property is high, if the sun hours are high too, you will be able to generate enough power to run a couple of Antminer S19s incessantly to generate new crypto coins to make huge profits.
This will offset the price of the property in a couple of years or so.
You will also be able to pay the mortgage on your home and still make some profit every month.
However, this will primarily depend on the type of crypto coin you mine and the prevailing price of it.
And if you take the house on a modest rent, then it will increase your amount of profits significantly.
And, if you own the house and do not stay there, you can also rent it out to a low-income family for an insignificant rent and make some additional income over and above your crypto mining profits.
If you are too kind, you can even give it for no rent but still make profits.
This way, your crypto mining venture using solar power will create subsidized housing units and for that you will not need the government to intervene.
Paying Off the Cost of the Solar Systems
Mining crypto using solar panels may involve some initial cost for buying the solar panels and creating the infrastructure to install them.
This may be quite a handsome amount depending on the type and capacity but it is a one-time expenditure.
There will be no electricity bills to pay every month because solar power is free.
And, if you generate more power than you need through your solar panels and sell them back to the grid, you will make more money.
Now, if you mine a valuable crypto, such as Bitcoin, the amount of profit you will make will be quite high and consistent since you will have no regular major expenses.
This will enable you to pay off the cost of the solar system pretty quickly.
Boon to Cities
As said earlier, setting up a solar crypto mining rig will be profitable in those areas where the peak sun hours are more.
Therefore, for some cities solar crypto mining will be a boon, such as California.
It may also prove to be beneficial for cities like Baltimore with subsidized housing which is known to have a large number of homes lying vacant.
It is better to use the roof spaces of these specific houses for installing solar crypto panels to generate power for crypto mining.
It will be far more profitable in comparison to tearing them down.
Any investor will grab these vacant houses, install solar panels on the roofs, mine crypto to make profits, and rent the homes to local families at a nominal rate.
This will not only provide affordable housing to the local people but will also turn a vacant and unused home into a used and occupied property.
This kind of approach will not only be profitable for the investor who will make profits but also to the society by providing homes to the unsheltered.
Most importantly it will benefit the world and the environment by making it green.
With all such benefits, solar crypto mining is really a boon to these cities and will prove to be a much better and more productive solution in comparison to spending on bulldozing homes to get nothing but useless piles of garbage.
The best thing that can happen to cryptocurrencies when these are mined by using solar power and is scaled up is that these will become practically carbon-neutral overnight.
According to a report by Project Sunroof, even if half of the unused roof spaces of the houses in California are used to install solar panels, it would produce nearly 121 million Megawatt-hours of energy every year.
This is a huge amount and will be more than adequate to meet the power requirement of the whole Bitcoin network which is about 110 million Megawatt-hours each year.
When you look at this figure on a national scale, it will come to trillions in value of crypto coins.
The most significant benefits of combining solar power with crypto mining however will be the evolution of a carbon-neutral economy which will trigger off a green revolution.
Incentivizing the Investors
However, this is something that will not happen overnight, especially on a large scale.
For that, the investors need to be incentivized in particular. This is the responsibility of the states and countries.
However, to create incentives for the investors to use roof spaces of homes and businesses for solar powered crypto mining, the states and countries have to realize the benefits of it rather than blame crypto outright for polluting the environment.
Some of the useful ways to incentivize and motivate the investors is to extend Federal tax credits for setting up new solar power systems which are going to expire in 2024.
Also, they need to make the tax and regulatory rules very clear to the investors regarding cryptocurrencies so that they become more attractive and productive to hold.
Add to that, manufacturers of mining hardware should also be encouraged to produce more of these machines by doing away with taxes on imported hardware.
This will eventually reduce the cost of these machines.
Apart from the state and central governments, the major solar companies also play a crucial role to motivate the investors.
They could package mining hardware along with the solar batteries and other mining accessories they sell already to the home owners and businesses.
With such little efforts from the different state governments and major solar companies the individuals along with small businesses and municipalities will be encouraged to the hilt to combine crypto mining with rooftop solar power systems.
This will expedite the process of decarbonizing crypto.
In addition to that, it will also help significantly in expanding the solar power market and its use.
All in all, it will turn out to be a very useful means to make healthy profits for the investors, the crypto ecosystem, as well as the world with green crypto.
With the huge recurring cost involved in crypto mining, especially in monthly electricity bills, it is highly likely that more and more miners will move to areas where renewable energy is accessible more easily.
There is no doubt that the solar panels provide cheap alternative power to the crypto mining rigs.
Such type of investment is specifically profitable when the solar powered rigs are set up in the deserts.
However, if you are thinking of shifting your mining set up to the desert for more profit, do also keep in mind a significant fact that the excessive heat of the sand can make your mining rigs fail often and break down more easily.
A good option is to move to Iceland which has already become a favored popular destination and the first choice for the Bitcoin miners.
It is because this region offers fast and practically limitless internet apart from lots of space to set up a solar power system.
As said earlier, if you are okay with the initial cost of installing the system, the rest of your journey is virtually free, and for years to come.
This is because solar power is free and the solar panels are built to be robust and last for at least quarter of a century.
With no electric bills to pay every month, solar power crypto mining leaves a lot of room for making profits.
This inexpensive power generated by the solar power systems can support Bitcoin mining operation as well, which is often accused of being too power hungry and disastrous for the environment.
Such a setup eliminates these issues and enables the miners to make profits for years.
According to a Bitcoin solar mining operation documented by Merkle, it has been generating power and profits for a year consistently with as many as 25 distinct mining rigs being used.
Mining in this process proved to be so profitable that, in fact, the miner behind the operation decided to increase the number of mining rigs to 1000 and still make handsome profits to the tune of about $18 a day.
With such a reasonably high Return on Investment the miner found it easy to pay off the cost of setting up the mining rigs which included the cost of the solar panels, batteries, power controls, and the processors, which added up to a hefty amount.
Crypto Prices and Mining Cost
However, in order to make profits from solar crypto mining the miners need to balance between the prices of the crypto coins they are mining along with the mining cost.
Simply opting for a cheaper alternative to mine crypto coin of any given type will not provide the desired profit.
In fact, a cheaper alternative is just a part of the equation. The other major part is the value of the particular crypto coin that is being mined.
If both are good the profits will be tidy.
If you want to make exceptional profits from solar crypto mining then you should mine major coins such as Bitcoin, Ether and others that usually have a high market value almost all the time, barring a few exceptional situations.
The value of most of the other types of crypto coins is pretty volatile with dramatic falls happening almost every day for some coin or the other.
If you mine these types of coins then you will put your solar mining operation at significant risk of losing everything.
Therefore, with all these said, it can be safely concluded that given the current scenario where there is a significant increase in the scale of crypto networks, it is high time that everyone thought about creative solutions.
Especially, when combined with an increased urgency of climate change, rooftop solar crypto mining is perhaps one of the best solutions that will make cryptocurrencies more sustainable and green.
Those who are skeptical about it, it is for them to explore solar crypto mining now or lag behind others, never to catch up with them.
Solar crypto mining seems to be rising in popularity with each passing day. As pointed out in this article, it makes crypto coins and the environment green.
A lot of miners are looking for spaces and regions to set up their solar powered crypto mining systems, which, eventually, will begin a green revolution.