Want an energy abundant America? Bitcoin mining can help.

Grid expansion, resilience, and efficiency all intersect at the future of everyday money.

In 2024, the state of California had the capacity to produce more solar energy than it could use.

By a lot.

Over the course of a year, more than 3 million megawatt hours of solar energy was effectively abandoned. With nowhere to put a huge solar glut, large solar plants just shut down for up to half a day at a time, even during the sunniest, most productive summer days.

To put this number in perspective: 3 million megawatt hours is enough to power more than 500,000 homes for an entire year — more than all the housing units in San Francisco combined, more than 100 large hospitals, or more than 7x the entire Boston Metro Transit system, for an entire year.

Instead, it was left uncaptured, effectively thrown away because it couldn’t be used or stored or transported.

Not only is power left uncaptured, but CA utilities go so far as to pay other states to take even more excess power off their hands.

Just one public utility in Arizona took a $69 million payment to take some of that excess power. And while a rebate might be nice, it doesn’t solve the problem. It just moves it somewhere else.

Cheap energy coming in from CA means that same utility in Arizona winds down portions of its own production capacity, giving what is a big pocket of inefficiency a new home instead of truly productive use.

This isn’t just a problem in one or two states. It can and does happen anywhere solar or wind or otherwise renewable energy can’t be immediately used, from Texas to Minnesota, Nebraska to New York.

And when the problem is framed as technological, there are two main proposals to solve it: either 1) store the energy, or 2) invest in transmission lines to move it to a wider market.

The thing is, the technology to do both of these things exists, but the problem still remains.

All of this suggests that we may be looking at the problem in the wrong way. That it might be less technological and more a misalignment of incentives. Put differently: how do we make it so the kind of continued energy expansion that AI and broad electrification and untold future industries will undoubtedly require makes economic sense today?

One solution that could both instantly monetize today’s wasted, excess energy, and further incentivize energy expansion, is bitcoin mining.

At its most basic, bitcoin mining turns energy into bitcoin. Adopting it as a solution would give immediate use to the 3 million megawatt hours of solar power currently abandoned just in California, incentivize continued clean energy expansion by making it unambiguously profitable, and stop the bleeding that comes from paying other utilities to take excess power, because every kW of excess power would instead be converted into bitcoin.

How much bitcoin are we talking? Back of the napkin math puts 3 million megawatt hours/year comfortably in the hundreds of millions of dollars worth of bitcoin. That’s hundreds of millions of dollars worth of bitcoin that can be borrowed against or liquidated or otherwise spent on grid-level improvements: on burying lines in high-fire areas, on upgrading storage and transmission lines, on lowering prices for consumers, and on building out even more sources of clean energy. Bitcoin could be the missing link between now and a truly energy abundant future — between what existing technology can accomplish and what makes clear, economic sense to implement.

More than economic sense, it can help make the grid itself more resilient. Bitcoin mining is unique among energy users in that it is extremely flexible. Excess power supply? Turn on the miners and monetize. Spike in consumer demand for energy? Wind down the miners until it passes. Unlike some other data infrastructure, which require something like 99.9999% uptime, you can turn miners off when you need to without disrupting the network itself, because the network is decentralized. All of this together can be a powerful stabilizing force, both at the grid level, like we’ve already seen in places like Texas, and for the bitcoin network.

As Congress considers a digital asset market structure bill and works to modernize the tax system, there are things we can do, right now, at a policy level to make this solution even more attractive:

• Stop double-taxing mining rewards, making their treatment consistent with other commodities such as gold or oil, freeing up a wave of capital to invest in new mining and energy projects.
• Modernize tax policy to adapt to innovation, by recognizing that paying for goods & services in bitcoin shouldn’t be treated like selling stock. Congress should codify a de minimis tax exemption for bitcoin payments, which would exempt a certain amount from capital gains. This would strengthen U.S. payments infrastructure, and support the long-term sustainability of mining operators, boosting their ability to invest in new projects like local energy initiatives.
• Protect builders across the ecosystem, giving them the confidence to invest and innovate, by making clear a simple principle: that regulatory obligations related to money transmission are only for entities that actually control customer funds.

The fact of the matter is that every version of the future is going to require more energy than we currently produce, even if we currently over-produce in fits and starts in certain local markets. Solar capacity is only growing, in just about every state in the country and every country in the world, and we can’t afford to be wasting any of it.

Bitcoin mining can fix almost overnight what has been a pretty extreme mismatch of incentives, between the world’s need to expand clean energy production and energy companies’ fiduciary duties.

If we want a truly energy abundant America, bitcoin mining can play a meaningful role in aligning incentives to make it so.