Interview with Abe Cambridge, CEO and Founder of Sun Exchange
After seeing the rise and rise of Sun Exchange in Africa, we decided to go and have a conversation with them, to see how things look from one of the biggest upcoming solar markets in the world. Sun Exchange were really helpful and organised to have an electronic chat with Abe Cambridge, their founder and CEO. Abe was forthcoming with information and we are proud to bring you the following interview.
How has Sun Exchange come about – What was the motivation for creating the company?
My academic background is in climate science and the impacts of climate change such as global warming and ocean acidification pose the most imminent threats to humanity today. The solution is to transition the world away from fossil fuels to renewable energy, and solar power is the most deployable, affordable, accessible type of renewable energy.
In 2014 I moved to South Africa for a job with a solar company, and I was struck by the fact that such few rooftops had solar panels installed, despite South Africa being one of the sunniest regions on Earth. After some research and investigation, I realized financing was the most common roadblock to solar deployment in South Africa, and the nascent bitcoin/blockchain technology provided a means to address this. It was at that point that I decided to leave my job and start Sun Exchange to close the funding gap for commercial and community scale solar projects.
How has Sun Exchange navigated the complex problems with laws in the new era of cryptocurrencies and blockchain energy systems?
Sun Exchange’s primary use of blockchain technology is the use of blockchain-based payments (Bitcoin) for transactions when Sun Exchange members purchase solar cells or receive rental income from the solar cells they own. Thankfully, Bitcoin is widely accepted across the globe as a legitimate currency, with super fast and ultra secure payments, that can be sent in miniscule amounts. We are simply leveraging the payments features of cryptocurrency, and that means we deal with much less red tape than, say, a peer-to-peer energy trading platform.
In the absence of clear regulations, we preempt and self police the requirements that would likely be applied to the business, such as performing detailed KYC and AML checks on our users and holding users’ cryptocurrency in cold storage. And of course, as any other responsible business should, we work with knowledgeable legal, finance and engineering professionals to ensure we remain compliant across the board as we scale in size and geographically.
Where has the funding for Sun Exchange come from – have there been any issues with funding?
As of December 2018, Sun Exchange has raised approx. $1.9M through the SUNEX token sale event and from various angel investors, seed investors and tech incubator partners since 2016. Our largest investor to date is Alphabit, a global cryptocurrency hedge fund who placed $500k in Sun Exchange in September 2018.
We are currently in an open funding round, which Alphabit led, targeting a total raise of $3m of which >$750K is already committed.
In 2012 there was a massive global downswing in VC and private equity investment for cleantech startups after a few bad deals scared off investors. For a few years, this made raising capital tough for all of us in the sector. However, with the world becoming increasingly aware of the perils of outdated, crumbling energy systems and climate change, there is now renewed interest in the space. Bloomberg New Energy Finance recently reported that “Global venture capital and private equity investment [for cleantech] jumped 127% to $9.2 billion, the highest since 2010.”
In what areas is Sun Exchange currently operating in and what areas does it hope to cover in the next 5 years?
Currently we operate in South Africa, with imminent plans to launch solar projects in East Africa (Kenya) and Eastern Europe (Moldova) in 2019. In five years time we will have expanded to several other sunny, emerging markets including other parts of Africa, India, South East Asia and Latin America.
What is Sun Exchange’s plan for growth and how much is planned for the next 5 years?
In Africa alone, we aim to capture a 10% market share of C&I solar and microgrid investment to generate $60+ million revenue within 5 years. Additional emerging markets in India, Eastern Europe, South East Asia and Latin America exist for Sun Exchange to compound growth and establish itself as a global platform for solar panel ownership.
What do you think about the Energy market in southern Africa in general – how do you see it changing in the foreseeable future?
Africa is the birthplace of humanity, and now the survival of humanity relies on Africa developing sustainably. The climate cannot take another continent to develop using fossil fuels as the basis. Africa’s population is growing so fast it may reach 4 Billion by 2100. That is greater than the population of India, China, Europe and the USA combined. The opportunity is enormous. It’s the biggest market of the 21st century and it’s in everyone’s best interest that Africa goes solar.
The continent has to a large extent not been electrified, so there is an opportunity to leapfrog centralized fossil fuel powered grids and go straight to self-sustaining solar powered microgrid networks (much like the continent leapfrogged land-line phones and went straight to mobile). Africa may end up being the most advanced continent on the planet as a result of being among the last economies to emerge and get the best tech fitted on a clean canvas. Sun Exchange exists so anyone can share in the economic benefits of solar powering this amazing continent and other emerging markets.
Who do you feel are your biggest competitors, not just in the blockchain energy space, but also in the traditional energy space? Do you even see them as competitors?
Sun Exchange is a truly innovative business that is mission driven – we are seeking to connect the world to the sun, to transition the world’s economy to one that is driven by solar powered money! This makes the business very unique and looks to not only benefit all our stakeholders, but strives to serve a greater purpose. Sun Exchange’s main competitor in South Africa is Fedgroup, which has a history of more traditional financial services, and now offers a similar retail focussed direct ownership and leasing of solar panels. They only service South African customers, and do not support cryptocurrency or have a global brand or presence like Sun Exchange.
Crossboundary is a commercial solar project finance company that focuses on Africa, although they aggregate large numbers of solar projects together making funding processes very time consuming and not compatible with small commercial solar projects such as for schools and small businesses.
In the blockchain space a number of energy projects have started, such as PowerLedger and WePower, but none are commercially operating. Most energy-related solutions in the blockchain space are focused on peer-to-peer energy trading, whereas Sun Exchange is focused on getting the decentralized solar energy network built from which energy CAN be traded, and where the ownership of that decentralized network is in itself decentralised.
What incentives does a person have to become a Sun Exchange customer? Are you seeing a good conversion rate?
We have two types of customers, one being Solar Cell Owners (individuals across the globe who have participated in a Sun Exchange project crowd sale and bought solar cells that are they then can lease on to are power Sun Exchange-hosted solar projects) and Solar Project Off-takers (businesses, schools and organisations that receive electricity from a rooftop solar plant that is being powered by Sun Exchange members solar cells). Solar Cell Owners earn an income stream from leasing the solar cell and also own the carbon reductions. This makes solar ownership open to anyone, at the click of a button. Solar Project Offtakers get to use solar electricity at a price which reduces their energy costs by up to 40%.
Across the board, the feedback we receive from both Solar Cell Owners and Solar Project Off-takers is overwhelmingly positive, as both groups enjoy significant benefits.
Thanks to our enthusiastic, engaged and growing base of solar cell owners we’ve seen our solar project crowdsale sell-out time go from six weeks with our first project in 2015, to approximately 5 hours for our most recent project. We currently have over 900 solar cell owners across 90+ countries who own solar cells powering our seven active solar projects in South Africa. Not only do these users have the satisfaction of knowing they are contributing to the global clean energy transition and bringing clean, affordable power to schools, NGOs, wildlife parks and small businesses in South Africa, but they are also earning income leasing their solar cells which is equivalent to approximately 10% internal rate of return annually over the 20 year lifespan of each project. That income goes directly into their digital wallet each month which they can withdraw or use to conveniently purchase more solar cells.
We currently have nine solar project off-takers across South Africa, including four schools, two wildlife parks, two factories and an NGO. Through Sun Exchange, these offtakers gain access to clean, affordable and reliable electricity via rooftop solar power installations that they would otherwise have to tie up their working capital into. Solar allows them to reduce their monthly electricity costs and their carbon footprint, enabling them to put their precious capital into expanding and improving their operations, instead of burning it on coal power.
Thank you Abe!
Thanks again to Sun Exchange and Abe Cambridge for this insightful interview. It was a pleasure to communicate with you and we wish you all success in the future!