BitBox Off Grid Mining Data Centers
Why would anyone even consider off grid mining. Well lets talk about some of these reasons. First lets start with a recent statement in January of 2022 from an Oncor Electric Delivery engineer while we were working some deals for new space for one of our clients.
“Cypto mining operations are not an essential business”. Therefore all mining operations in the state of Texas will be treated as non-essential and will be charged a lot more money for electric infrastructure than other businesses such as data centers and/or manufacturing. How much more money? Keep reading below…..
So not only have we seen an increase of average power costs in Texas from $0.040/kWh in 2017 to around $0.070/kwh in 2022. Oncor Electric is now going to charge mining operations 200% more just to bring in the infrastructure for any expansion project because it is crypto mining based. Don’t forget Oncor Electric is also going to charge delivery of that electric power on your bill every month and definitely don’t forget how in the state of Texas commercial electric delivery known as “Rachet” charges are set by your peak usage and carry on for one year regardless if you decide to scale back operations or become more efficient. Many miners scale back for several reasons. They want to stay on site during bear markets, they decide to buy more efficient equipment or they are co-hosing and have vacancy.
Renewable power is now looking like a lot better option with a lot of benefits. Actually Oncor has made it clear that in the long run they will be a lot more expensive and power installs will come with a lot more red tape. Lets discuss some of the benefits of off grid mining operations.
First the cost of solar for example has dropped significantly since 2017. Actually its so cheap right now its surprising how more people have not moved off grid. The average cost of new electric power infrastructure has more than doubled in the state of Texas since 2020 and there is no end in site. In just two years during the pandemic the cost of electric infrastructure in some parts of Texas has nearly tripled. Today we can install 500kW solar arrays for a fraction of the cost and we can even have some of that power online before Oncor Electric. Actually the cost of solar is about the cost of Oncor Electric infrastructure but the difference is our clients get to keep the infrastructure, pay nothing for the power, have no contracts with power companies, completely eliminate delivery and rachet fees and if they decide to scale back we can grid tie what they don’t use and get some credits back. ROI on mining crypto currencies with alternative power is now looking a lot more attractive. The only real draw back is mining during daylight hours and of course you will need more space but there are solutions for those problems as well.
Mining operations that are off grid would actually play an essential role in keeping the mining infrastructure moving especially during major power outages. Remember if everyone else is down because of power outages and you are still mining guess where all the mining rewards are going. We know there may be drawbacks but you have to weigh the costs. Since Texas is a prime state for solar energy, if Oncor Electric is going to present our clients with barriers, high upfront costs and discriminate towards the mining business it may not be worth the time to deal with them anymore. So instead you could scale back your mining operation a little with the most efficient miners on the market and simply mine for free.
Our team can provide mining containers specifically designed for solar and wind power. If you are interested give us a call today to discuss our off grid crypto mining containers and space to host these type of containers. We are dedicated to bringing our clients the most innovative crypto mining solutions.
Basic ROI Analysis
The costs of infrastructure are increasing rapidly making the ROI on off grid mining a lot more attractive. You can see from these numbers, ROI on alternative energy as a source of your mining power is around 18 months even if BTC falls. If BTC increases ROI will be less than 18 months.
Long term grid tied costs on peaking 1,000,000 watts from Oncor Delivery and TXU Electric…..
1,000,000 watts one time install cost: $200,000.00
Oncor Delivery (rachet): 1,000,000 x $7.00/kW = $7,000/month
$7000 rachet/delivery charge per month holds even if you stop operations or scale back operations
Usage: $0.065 x 720,000/kwh per month = $46,800
Total: $58,238/mo with sales tax
Total first year paid to electric companies: $898,856
1 MegaWatt Solar Array
Rough estimate just to make some comparisons
1,000,000 watts wholesale 4000 panels = $150,000 – $250,000
Array mounts = $250,000 – $350,000
Copper and inverters = $150,000
Labor: $250,000
Total cost to install solar power: $1,000,000
Land lease = negotiable
2-4 mining containers to host a MegaWatt
Revenue
Capacity = 333 S19 Pro miners
Generation @ BTC $45k 6 hours/day = $749,250/year
Approximate ROI before you are mining for free = 18 months
