The first step for the Glow Verification Entity (GVE) is to establish the additionality of a solar farm, confirming its eligibility within the Glow Ecosystem. Additionality means that the solar farm project would not have been initiated without the support of Glow.

To achieve this, the GVE requires the solar farm owner to sign a Declaration of Intent directly on the Glow Audit Hub. By submitting the application, the Audit Hub records the date the owner began considering joining Glow with a cryptographic signature. This Declaration of Intent is a formal statement from the owner, specifying their intent to join the Glow Ecosystem, including the property's location (latitude and longitude) and the date of consideration. This date is pivotal as it sets the timeline for all subsequent procedures and document reviews. For instance, if any permit documents are dated before the Declaration of Intent, the GVE can conclude that the project is not additional.

Furthermore, the GVE schedules an on-site visit to capture pre-installation photos using drones. These photos confirm that no solar panels are already installed on the property. This step is also essential to verify additionality.

Solar farms join the Glow Ecosystem by agreeing to commit 100% of their financial value to the incentive pool. This total amount is referred to as the Protocol Deposit.

The objective of the GVE is to determine the estimated net present financial value of the solar panels over their operational lifetime.

Inputs for Calculating Protocol Deposit:

• Cost of Power from the Utility Bill: The current price of electricity as billed by the utility provider. Adjustments are made to ensure that any subsidies, donations, or other cost reductions (e.g., government incentives, private grants, blended financing mechanisms) are added back. This ensures that the Protocol Deposit reflects the true underlying cost of electricity rather than an artificially reduced price.
• Annual Energy Production: To calculate the annual energy production accurately, Aurora Solar is used. Aurora Solar takes multiple factors into account to provide a precise estimate. These factors include:
  • System Size of the Solar Farm: The expected electricity generation of the solar farm.
  • Irradiance Data: Historical solar irradiance data (Global Horizontal Irradiance – GHI, Direct Normal Irradiance – DNI, etc.) specific to the project location, sourced from databases like NREL (National Renewable Energy Laboratory) or other reliable sources.
  • Weather Data: Includes temperature, wind speed, and other climatic factors that affect Photovoltaic (PV) performance.
  • Inclination and Azimuth of the Panels: The tilt angle and orientation of the solar panels, affecting their efficiency and power output.
  • 3D Modeling of Obstructions: Information on trees, buildings, and other objects that can cast shadows on the solar panels.
• Lifetime of the Panels: The projected operational lifespan of the solar panels.
• Cash Flow Discount: The discount rate applied to future cash flows.
• Escalator Rate: The projected annual increase in electricity prices specific to a region.

At the onboarding stage, the Protocol Deposit is an estimate. This estimation may vary as the final size and configuration of the solar farm might change. The GVE finalizes the Protocol Deposit once the solar panels are installed and their exact size and placement are verified, at which point the payment of the Protocol Deposit is requested.

To support GVEs during the initial growth phase of the Glow Ecosystem, an audit fee is set at $0.012 per watt, with a minimum of 1,200 per audit. This fee covers:

• Two GVE Visits: Pre-installation photos & Post-installation photos
• Hardware: Monitoring Box
• Miscellaneous Supplies: Mounting hardware, Breaker, Wire, Current transformer, etc.

Before any solar panels are installed, the GVE needs to capture “before” photos of the property. These are a required part of the audit and help confirm the system is brand new.

A certified drone operator will visit your property to take pre-installation photos. These images serve as proof that no panels were installed prior to enrollment.

During this period, the GVE collects all the necessary documents from the participant and reviews them to ensure compliance and eligibility within the Glow Ecosystem.

1. Contract Agreement

   • Purpose: Establishes the legal and operational framework for participation in the Glow Ecosystem.
   • Status: Mandatory

2. Planset

   • Purpose: Provides detailed technical specifications and plans for the solar installation.
   • Status: Not Mandatory

3. Mortgage Statement / Property Deed

   • Purpose: Verifies ownership or in the property where the solar farm is to be installed.
   • Status: Mandatory

4. Two Utility Bills

   • Purpose: Utility bills are used to verify the cost of power directly from the bill to ensure all costs are included. Fixed prices, such as "basic charges" or fees that do not change month-to-month, are not added because the customer will continue to pay these regardless of solar installation. Only charges based on kWh usage are considered.
   • Status: Mandatory

5. Permit

   • Purpose: Confirms that the necessary permits for the solar installation have been obtained.
   • Status: Not Mandatory

6. Inspection

   • Purpose: Confirms that the solar installation meets the safety standards.
   • Status: Not Mandatory

7. Permission to Operate (PTO)

   • Purpose: Grants official permission to operate the solar farm, indicating that all regulatory requirements have been met.
   • Status: Not Mandatory

The GVE guarantees a visit within 2 weeks of the farm becoming operational, which can be either upon obtaining the Permission to Operate (PTO) or when the farm is simply turned on and connected to the grid and offsetting carbon emissions. The GVE books a date for the visit, and the solar farm owner is notified of this date. No preparation is required from the owner. The GVE will bring all necessary equipment and proceed to install the monitoring box and take drone photos of the solar panels.

Once the after-installation photos are obtained, the GVE proceeds to validate the final Protocol Deposit. By taking into account the actual size of the solar farm installation and the validated annual energy production, the GVE can determine the final amount that needs to be paid.

Solar farms join the Glow Ecosystem by agreeing to commit 100% of their financial value to the incentive pool, converted into USDC. This total amount is referred to as the Protocol Deposit. This deposit is distributed as rewards to carbon credit producers over four years. The objective of the GVE is to determine the estimated net present financial value of the solar panels over their operational lifetime. It's necessary to compute the cost of the protocol deposit over the lifespan of the panels, considering potential variations in electricity pricing and the long-term financial implications for the solar farm.

Methodology

First Year Electricity Price Calculation:

The calculation of the first-year electricity price is determined using the following formula:
Electricity Price (kW)×Hours of Sunlight per Day×Power Output (kW per Hour)×Number of Days

Escalator rate:

The escalation rate is dependent on the region in which the farm is located, with data sourced from reliable industry insights. This approach assumes that electricity prices will increase over time, which is a significant factor in the economics of solar energy.

Reference: Average Electricity Cost Increase Per Year (Solar Reviews)

Cash Discount Application:

A cash discount rate of 7.5% is incorporated into the present value calculation. This figure reflects the current U.S. Federal Funds Rate (4.25%–4.50%) plus an additional risk premium of approximately 3%. The premium accounts for default risk, project execution variability, and lender margins, ensuring the discount rate aligns with actual financing conditions in the solar sector.

Continuous Growth rate and Present Value Calculation:

The Net Present Value (NPV) of projected monthly cash flows is determined by using both an annual discount rate and an annual escalator rate.

The detailed methodology for how these rates are applied, including the underlying formulas, can be found in Appendix 1.

Glow calculates a solar farm’s Protocol Deposit not by electricity revenues alone, but by the total financial value the project generates for its owner. Electricity sales are usually the largest source, but savings from reduced energy bills and subsidies or grants from governments and utilities can also be significant. All of these inflows are combined into a single net present value.

This ensures projects across different geographies and policy environments compete on their true cost of construction and operation relative to the full set of financial inflows they receive. Solar farms should not be able to manipulate their perceived additionality by strategically structuring around subsidies, incentives, and donations provided by external sources, including government sources.

A conservative failure rate of 1% is assumed for solar farms within the first 10 years of operation in the United States.

Extensive research on historical failure rates of solar farms in the United States within the first 10 years has been conducted, with a conservative multiplier applied. Furthermore, professional surveys have been conducted. Despite discussions with solar professionals indicating a failure rate far below 1% over the lifetime of the solar farm, a conservative estimate of 1% was chosen to account for unforeseen circumstances. The per-year rate is 0.17%.

WattTime is a leading environmental tech non-profit specializing in real-time grid emissions data and automated emissions reduction (AER) solutions. WattTime gathers its data from reliable sources, including grid operators, utilities, and emission factors from the Environmental Protection Agency (EPA). Utilizing advanced algorithms and predictive analytics, WattTime provides precise, real-time insights on grid emissions. Its rigorous data collection and analysis methods make it a trusted resource for calculating carbon credit emissions. Glow is using WattTime for its carbon credit calculations.

Calculations are conducted based on the specifications of the solar panels and using historical data from WattTime. Additionally, the methodology incorporates data from NASA's API to determine the expected number of sunlight hours for a solar panel in a specific location. This data is crucial for accurately estimating the average hours of sunlight per day and the average carbon offset per MWh.

To calculate the expected lifetime carbon credit production, the power capacity of the solar panels is multiplied by the sunlight hours, integrating both WattTime and NASA's data. The script iterates over historical data from the WattTime API, combined with NASA's sunlight data, to estimate the number of credits a panel would have produced annually.

A 35% discount is then applied to the final carbon production value. This conservative approach is designed to account for any uncertainties in the calculations, ensuring that the results are within safety margins. This not only enhances the credibility of the protocol and methodology but also positions the analysis positively, especially when subjected to detailed reviews.

It should be noted that for real-time monitoring of power output, NASA data is not utilized; instead, this monitoring relies on the installed equipment at the solar farm. This data can be cross-referenced with NASA's data if any discrepancies or suspicions arise, providing an additional layer of verification and accuracy.

Considering the inherent variability in life cycle assessment (LCA) results for solar technologies as per ISO 14040 and 14044 standards, the highest value was selected from NREL's harmonized data set for our conservative approach. This decision acknowledges the ISO standards' provision of a flexible framework for LCA, which can lead to a broad range of outcomes depending on the practitioner’s choices. By adopting the highest value, we aim to account for the upper bound of potential environmental impacts, thereby ensuring that our audit conclusions are robust against the variability in LCA practices.

The methodology involves utilizing the harmonized LCA results, which are refined by NREL to enhance precision and reduce variability. By adhering to a consistent set of methods and assumptions, harmonization narrows the range of greenhouse gas (GHG) emissions estimates, allowing us to base our audit on a more reliable and standardized benchmark.

It is important to note the specific harmonized greenhouse gas (GHG) emissions medians identified in our assessment. For monocrystalline Silicon (mono-Si), the harmonized GHG median is 40 g CO2-eq/kWh, and for multi-crystalline Silicon (multi-Si), it is 47 g CO2-eq/kWh. These values are calculated based on assumptions of ground-mount application, solar irradiation of 2,400 kWh/m²/yr, a performance ratio of 0.8, and a panel lifetime of 30 years. By integrating these specific medians into our assessment, we ensure a comprehensive and precise understanding of the potential environmental impacts of these solar technologies.

A 35% adjustment is then applied to the total carbon debt. This conservative approach is designed to account for any uncertainties in the calculations, ensuring that the results are within safety margins. This not only enhances the credibility of the protocol and methodology but also positions the analysis positively, especially when subjected to detailed reviews.

GVEs play a critical role in ensuring the integrity and accuracy of the audit process for solar farms within the Glow Ecosystem. The following outlines the expectations for GVEs and their staff, employees, or contractors.

GVEs can operate as entities that are capable of hiring staff, employees, and contractors to perform various tasks. These tasks may include, but are not limited to, pre-installation photos, document gathering, assistance with audit reports, and the installation of monitoring boxes.

At the conclusion of the audit, the GVE is required to sign a disclosure document. This document must list all individuals and entities hired during the audit process, detailing their roles and contributions.

The GVE, as the signing authority of the final audit, holds full responsibility for the entirety of the audit process. This includes the accuracy and completeness of all information and activities conducted.

When contractors are hired, the GVE must include detailed mentions of who was hired and the specific work they performed in the final audit report. Despite delegating tasks, the GVE remains solely responsible for the overall audit.

The audit report must contain a dedicated section to list all contractors and companies involved in validating information. This includes:

• Companies or individuals that conduct pre-installation photos.
• Installers of monitoring boxes
• Interns or contractors who assisted in verifying documents or validating Protocol Deposit

GVEs are expected to maintain high standards of quality and integrity throughout the audit process. This involves rigorous verification of all data, transparency in reporting, and thorough documentation of all procedures and findings.

In addition, all GVEs must undergo KYC (Know Your Customer) and AML (Anti-Money Laundering) verification before being approved to operate within the Glow Ecosystem. This ensures that all entities conducting audits are properly identified, vetted, and compliant with global standards for financial and operational integrity.

This methodology computes the net present value (NPV) of electricity revenues from a solar farm over a fixed operating lifetime (typically 30 years), including both an annual electricity price escalator rate and discrete monthly discounted cash flows.

Lifetime

T_y: Total years of modeled operation (e.g., 30 years).

Base Electricity Price

R₁: Year 1 electricity revenues.

Annual Escalator Rate

e: Annual percentage increase in electricity price.

Annual Discount Rate

d: Discount rate for future cash flows.

Payment Frequency

Monthly (12 equal payments per year).

The escalator is applied once per year at the start of each year:

where y ∈ [1, T_y] ∩ ℤ indexes the operating year.

Annual revenue generation Rᵧ is divided evenly across 12 months:

The annual discount rate d is converted to an equivalent monthly rate dₘ:

For month m counted from the project start (with m = 1 for the first month), the present value is:

where

is the corresponding year for month m.

The NPV is the sum over all months in the lifetime:

• Discrete annual escalator:
  Escalation affects the price once per year, not continuously.
• Discrete monthly discounting:
  Each monthly payment is treated as a separate discounted cash flow.
• Real-world alignment:
  Avoids continuous compounding and aligns with typical electricity sales contracts.
• Granularity:
  Captures the time value of money at monthly resolution.
• Scalability:
  Can accommodate different lifetimes, escalation rates, and discount rates without structural changes to the formula.

To calculate the net present value (NPV) of solar farm cash flows, Glow uses a discount rate that mirrors the typical financing costs developers face when building projects.

Step 1: Base Rate

Glow begins with the U.S. Federal Funds Rate, which is currently 4.25%–4.50% (as of August 2025). This represents the "risk-free" cost of borrowing in the U.S. economy.

Reference: New York Fed Effective Federal Funds Rate

Step 2: Risk Premium (+3%)

On top of the federal rate, Glow adds a 3% to account for:

• Credit & default risk – lenders require a margin above risk-free rates.
• Project execution risk – construction, permitting, and operational variability.
• Lender margins – banks and specialized solar financiers price loans several points above base rates.

This premium aligns with observed loan spreads for solar projects, which historically fall in the 2–3% range above benchmarks.