Cryptocurrency mining takes up absurd amounts of electricity. One Bitcoin requires 266,000 kilowatt-hours – the amount one American household consumes in 24 years. Where to get the energy and what about solar? In this article, we’ll talk about how to use solar panels for crypto mining and whether it is worth it.
Let’s first break down what crypto mining is. Imagine a giant public record book. This is the blockchain. It keeps track of all cryptocurrency transactions – who sent what to whom. But unlike a bank ledger, there’s no single person in charge. Copies of this record book are spread out across a massive network of computers around the world.
US represents about 40% of global bitcoin mining
How do new transactions get added? Every time someone makes a crypto transaction, it’s announced to the whole network. The operation has to be verified by other members of the network. For this, their computers have to solve a puzzle that requires a lot of processing power. It’s called Proof of Work and getting this proof is mining in a nutshell.
Miners race to complete the task. The first miner gets to add a new block containing recent transactions to the blockchain, and everyone else checks their copy to make sure it matches. As a reward for their work, miners are given a small amount of cryptocurrency for helping to secure the system. This way, everyone agrees on the history of transactions, making it nearly impossible to cheat.
Getting coins for verifying transactions can make you good money, but you need powerful computers, and those computers need a lot of electricity. Where are we going to get it from? One possible answer is right in the sky.
About 5% of Bitcoin mining relies on solar power, according to research by ESG analyst and investor Daniel Batten. Seeing the widespread use of solar energy and the decreasing cost of solar, this percentage may keep on growing. Here are the pros of crypto mining with solar:
✓ Reduced operational costs. The long-term cost savings from reduced energy expenses can significantly improve your profit margins. Electricity and fossil fuel prices fluctuate, impacting mining operations, while solar power offers a more predictable and stable energy source, reducing vulnerability to price changes.
16.8 cents
average cost of a kilowatt-hour in the US in 2024
✓ Uninterrupted operations. Power outages can cripple mining activity. When paired with batteries, solar panels ensure a steady flow of energy, minimizing downtime and production losses and offering greater energy security.
✓ Financial incentives. Many governments offer financial incentives to promote the use of solar energy. These incentives can come in the form of tax credits or grants, making solar power an even more attractive option.
Not everything is as rosy as it may seem. Despite its numerous advantages, solar energy has a number of drawbacks for this specific business.
✗ Upfront investments. One of the biggest roadblocks is the hefty initial cost. Setting up a solar panel array, energy storage systems, and the necessary infrastructure requires a significant upfront investment. This can be daunting for miners, especially compared to readily available grid electricity.
✗ Variable energy production. A drop in electric production of panels due to cloudy weather can disrupt the mining process. Besides, Bitcoin mining is a 24/7 operation and solar panels don’t work at night. While battery storage can help bridge these gaps, it adds another layer of complexity and cost.
✗ Land footprint of large PV projects. Mining rigs require a lot of power, translating to a need for a vast amount of solar panels. Finding suitable land with sufficient space for large-scale panel installations can become a third challenge, especially in densely populated areas.
So what exactly you have to run on solar energy to mine cryptocurrency? How does a crypto mining farm look anyway?
Solving the puzzles requires a lot of computing power. Imagine a giant warehouse filled with rows and rows of powerful computers constantly whirring away. That’s basically a mining farm. These farms consist of mining rigs using special GPUs – multiple graphics cards – or specialized chips called ASICs – application-specific integrated circuits. The more GPUs or ASICs a rig has, the faster it can solve problems and earn more cryptocurrency. Since this powerful equipment works day and night, it needs cooling fans or air conditioning to keep things from overheating.
A single mining rig uses at least 600 watts of power to run one or two GPUs and several fans to cool them down. Some more advanced rigs can draw well over 1200 watts. A farm can have hundreds or even thousands of rigs, running 24/7.
According to the Bitcoin Electricity Consumption Index by the University of Cambridge, global bitcoin mining used 121.13 terawatt-hours of electricity in 2023 – as much as the entire country of the Netherlands with a population of more than 17 million people.
If we want to power a crypto farm with solar power, how many panels do we need? Let’s assume one mining rig of ours consumes 1000 watts. We have to keep in mind that about 25% of the energy generated by our panels will be lost due to non-perfect weather conditions and transmission losses. So we need a solar system that generates 1250 watts. For example, three solar panels of 500 watts can power this rig.
30 kW⋅h
is how much an average American household consumes per day
Let’s assume that these panels will operate at full power for 5 hours when the sun shines the brightest. But we want our farm to run 24/7. So during these 5 hours, we need not only to keep the rig running but also to save electricity to use during the other 19 hours. For that, we need batteries and additional panels. The rig consumes 24 kilowatt-hours per day. When we factor 25% loss margin, we find out that our solar system has to produce 30 kilowatt-hours. To produce 30 kilowatt-hours in 5 hours we need 12 panels of 500 watts plus batteries to store this energy.
If we have two solar-powered crypto mining rigs, we need 24 panels that would form a 12-kilowatt system. If we have 100 rigs, we need 1,200 panels to get a 600-kilowatt system. It’s a huge project which is likely to take up a lot of land.
One megawatt of solar power with the inclusion of roads and necessary spacing between modules requires from 5 to 10 acres. It’s like two Walmart Supercenters put together.
To use the available space efficiently, you need really powerful panels. Here are some we can recommend:
Phono Solar 550W Solar Panel 144 Cells PS550M6-24/TH
Pickup on Thu, Jul 25 from Austin, TX
Delivery on Jul 30 – Aug 02
The Phono Solar 550W panel provides a solid middle ground between power output and efficiency. Its 550W capacity and 21.28% efficiency make it a good choice for generating a decent amount of electricity without requiring excessive space. While the standard 12-year warranty is common, the panel guarantees 84.8% of initial performance after 25 years.
JA Solar 545W Solar Panel 144 Cell Bifacial JA-JAM72-D30-545MB
Pickup on Thu, Jul 25 from West Boylston, MA
Delivery on Jul 30 – Aug 02
JA Solar’s 545W panel offers a similar power output to the Phono Solar but with a touch lower efficiency of 21.1%. It also comes with the standard 12-year warranty, but shines in its extended performance guarantee. They boast an impressive 84.95% of original performance remaining after 30 years. This suggests the panel may degrade at a slower rate compared to the Phono Solar, leading to more consistent electricity generation over a longer lifespan.
Canadian Solar 705W Solar Panel 132 Cells Bifacial CS7N-705TB-AG Container 496 panels
Delivery on Jul 30 – Aug 02
The Canadian Solar 705W panel truly stands out with the highest power output of 705W and efficiency of 22.7% among the three. This translates to generating significantly more electricity, especially for installations with limited space. Despite the standard 12-year warranty, Canadian Solar steals the show with its exceptional performance guarantee. They ensure a remarkable 87.4% of original performance even after 30 years. This signifies a potentially much slower degradation rate, making the Canadian Solar panel a strong contender for long-term investment and reliable electricity production.
Who is already using solar power to mine cryptocurrencies? Crypto miners in general prefer to stay in the shadows. Usually, solar miners are enthusiasts deploying their farms in the middle of nowhere.
One example is Peter “CrazyDane” who is building his crypto farm on solar panels in Charlottesville, Virginia. Ash Andrews from the BBC documentary “Cryptocurrency: an opportunity to make money or a financial bubble?” ran his fully autonomous crypto farm on solar panels.
Still, while solar energy is promising for mining cryptocurrencies, its limitations make most miners stick with hydro- or nuclear power, or stay with fossil fuels. We hope that the developments in the field of energy storage will make batteries more accessible to the general public and simultaneously make solar power more popular among crypto miners. Read more about batteries and prices for them in our article “Solar batteries in 2024: Is it time yet?”
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Years of experience in translation and a love of nature help Julia find the right words to encourage going solar. She joined the team in 2023 and is happy to make her contribution to a greener future.
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