Glow is an Ethereum-based solar project that attempts to achieve 100% renewable energy by decentralizing power grids around the world. The company is less than a year old and has raised $30 million in a funding round led by Framework Ventures and Union Square Ventures.
Glow operates a decentralized physical infrastructure network, or DePIN, of solar farms across the United States and India. To encourage farms in its network to outperform “dirty” energy networks, the founders designed an entire economy based on an incentive model of subsidies and tokens.
“The way it works now is that Glow finds solar farms that are borderline viable and gives them just enough money to get them over the construction finish line,” said CEO and co-founder David Vorick . “And then the financier, the one who distributes that money, that person is the one who earns all the symbolic rewards.”
Glow helps struggling solar farms by covering the costs of commissioning them with money from financiers, “whether crypto or private equity investors who see a good case for returns” , Vorick said. He calls this a “recursive subsidy.” Then the farm must contribute its electricity revenue to an incentive pool to distribute to other solar farms.
To reward these farms for their work, audits of each farm are carried out periodically to assess and verify their electricity production and Glow carbon credits – Vorick’s version of carbon credits, tax benefits given to traditional solar farms to reduce greenhouse gas emissions, which he says are ineffective.
Every week, 175,000 tokens are distributed to the best performing farms. The owners of each farm receive the stablecoin USDC for the production of Glow carbon credits and GLW, the native token, for the production of electricity.
Usually in solar agriculture, subsidies are allocated based on production rather than profitability, leading to money being wasted on profitable solar farms without creating more energy, Vorick says.
“But this recursive subsidy solves that conundrum and makes sure that all the money you spend to encourage solar construction is laser focused on solar energy that is barely capable of existing without help, which means your grant has much more real-world impact,” Vorick said.
GLW is used to purchase carbon credits, and then those tokens are removed from circulation, creating price pressure and providing value to the Glow ecosystem, Vorick explains.
“The Glow economy and the Glow token are supported by the value of solar assets produced under the protocol,” he said.
There are 63 operational solar farms on the Glow network, which have produced 365 megawatt hours of electricity to date. The company plans to set up a new four-megawatt solar farm in India soon.
This funding round includes $6.5 million in funding for the company and $23.5 million in solar energy investment. Vorick plans to use the money to grow the company from five megawatts of energy to 600 megawatts over the next 18 months and expand into new countries.
“As long as stakeholder interest in carbon neutrality persists, we believe Glow could see mass adoption in multiple markets,” Michael Anderson, co-founder of Framework Ventures, said in a statement.
