Stronghouse and BLING. What's the connection?
In Stronghouse, Gothenburg Universtiy is working closely with Spring, a business-oriented digital agency in Sweden concerned with co-designing innovative IT solutions for societal issues. These partners want to give homeowners access to green finance. For this it is essential to simplify the eligibility check, which ensures that the investments are green and lead to a reduction in CO2 emissions . Consultations are ongoing with five major banks. Blockchain technology is being incorporated in the design to ensure transparency while also conforming with the EU’s General Data Protection Regulations (GDPR).
The Use Case Modelling shared by Gothenburg University currently has 12 steps for information/data flow and data references, illustrating the interaction between different devices and systems. These steps cover compliance checks, data collection, Blockchain, QR code generation through to the signing of the loan agreement, documentation of project progress and completion and flagging the loans as ’green’ and bundled into a green bond. The connection is between the bank and the applicant’s device. While geared towards minimal invasion of the banks’ system, it is challenging to find optimal blockchain solutions in this complex environment.
Green Bonds and blockchain
Spring wants their energy renovation app to be simple and easy to use for homeowners looking to borrow, while also providing the proof needed by the bank so that they can offer more attractive, ‘green’ lending rates. Green Bonds are popular with investors on the Bond Market. However, in order to qualify as ‘green’, each investment needs to prove it leads to a CO2 reduction. At the moment, this is done through an elaborate process, one which would be very inefficient for the relatively small investments by homeowners. Digitalisation of this process is, therefore, essential for homeowners to access green finance. Consequently, these ‘small loans’ can be bundled into a green bond. This is the core of Spring’s contribution to Stronghouse. Blockchain can help with the GDPR challenges.
Verification and GDPR
Blockchain transparency can solve the issue of double loan claims, activities and their status, and help with the GDPR challenges. Traditionally banks require a lot of personal data when considering loan eligibility. One option to avoid GDPR issues is to separate verification from documentation of proof. If a validity check of the bonds is required, banks should have access to the client’s data without this being published on the blockchain.
Energy Central in Ghent
The City of Ghent shared their inspiring work in the Energy Central (a one-stop-shop for energy efficiency in Ghent) aiming to enthuse citizens and unburden them on their energy renovation journey.
With Howest they are running a pilot to see what Blockchain can do with regards to energy loans for low-income households. Within the context of Stronghouse, Ghent is updating the Check-Your Home app. The app helps homeowners at the start of their customer journey.
Social loans, boosting renovations
Ghent and its suburbs have a diverse population…with equally diverse financial possibilities. So, personal advice on loans and grants is inherent to the energy loan affordability plans. In terms of boosting energy renovations in lower-income groups, blockchain offers an efficient and trustworthy system were homeowners can apply for these loans.
The loans are an alternative to commercial energy loans - a government social loan with 20 years pay back time. This could lower the barriers and simplify the process. This Energy Loans project is connected to BLING and operates within a collection of rules that comply with a special licence provided by the national financial authorities.
Meanwhile in Drenthe, the Municipality of Emmen has just completed the development of the e-Knip – a digital ‘energy wallet’ which will be deployed at the end of the year. Through the e-Knip the house, not the individual, is awarded points. These points can be ‘cashed’ at affiliated DIY or retail stores for further investments in the energy efficiency of their home
Individual house ID
This BLING initiative avoids the GDPR hurdles by registering data about individual houses and not homeowners/tenants. Each house has an ID with a wallet that collects data regarding green properties (solar panels, heat pump, insulation etc.). Through a free app (e-Wallet) the Municipality of Emmen collects anonymous data from inhabitants and these are rewarded with points in their wallet. A low-energy blockchain system (IOTA) is used.
QR code verification
The e-Knip app has been tested and is due for release. Some 40,000 inhabitants will be contacted by letter and invited to download the e-Wallet app. Information provided cannot be traced to the owners. Energy Saving Measures (ESM) are recorded and the Municipality knows which neighbourhood has been approached and their QR codes. Using these QR codes provides an insight into the green measures being taken in the area. By bundling information, demands and special offers can be directed on a house level.
Verifying data is always a challenge. With this system, the QR code only works once and the wallet (and points gained) is house bound. The e-Wallet provides a great incentive for getting people engaged and influencing their mindset. It’s a start on their customer journey.
Inspiration, insights and new ideas
When collating the presentations and ensuing discussions, all participants agreed that this exchange triggered some inspiring new ideas for their own and shared challenges. GDPR is a real issue for all parties, but some creative ideas brought insight and an eagerness to exchange further activities - progress and pit falls - in the future. Local and regional based incentives are a good starting place for the user. Both Stronghouse and BLING can accommodate the next steps, mapping how the digital customer journey progresses and discussing the potential and feasibility of a national blockchain parallel to the European Blockchain Services Infrastructure.