The future of energy must be decentralized. It is the fastest and lowest-cost path to scale new capacity on power grids and the only approach that ensures the households and businesses facing rising electricity demand from AI, automation, and electrification gain access to cheaper and more reliable power—and share in the upside of building more.

DayFi builds capital markets to scale distributed energy as an active grid resource. The DayFi protocol issues an energy-backed yieldcoin for DeFi and channels capital into behind-the-meter systems. The question is what sits beneath that token. This post explains the assets, revenue sources, and risk controls that support it.

DayFi finances distributed solar and battery storage systems in the United States, initially focusing on the residential market. Systems are owned by bankruptcy-remote special purpose vehicles (SPVs) and installed at host sites. A typical installation includes solar panels, a hybrid inverter, telemetry equipment, and a stationary battery sized to serve both the home and grid dispatch programs.

Residential assets provide diversification, short construction cycles, and consistent load profiles. When aggregated through Daylight’s software, these systems form a large, flexible energy fleet that supports power grids at scale.

Revenues from each energy system fall into three categories: contracted host payments, virtual power plant (VPP) revenues, and government incentives or environmental attributes. Each has distinct contracts, data, and settlement schedules. A project may only include one, or all, of the three main revenue sources.

DayFi offers Energy Subscriptions to residential homeowners (“hosts”) structured as power purchase agreements. Hosts receive solar at no upfront cost and contractually agree to buy the electricity generated from the energy system at an agreed-upon price per kilowatt-hour, typically below their existing utility tariff for immediate savings. Rates may be fixed or escalate modestly to hedge inflation.

Contracts run 15–25 years, providing stable visibility into production and cash flow. Hosts can buy out the system or extend the agreement at term, with early buyout options beginning in Year 6. Payments are billed monthly based on metered production.

Production risk is managed through standardized design practices, shading analysis, equipment warranties, insurance, and performance monitoring.

A Virtual Power Plant (VPP) is a coordinated fleet of distributed batteries that respond to grid signals as a unified, dispatchable power source. Instead of building large, centralized power plants, grid operators and energy companies can tap into this aggregated battery network to help balance electricity supply and demand, especially during peak periods or grid stress events. Daylight Subscriptions include an oversized battery by default, designed specifically to maximize energy market participation. 

VPP opportunities vary by market. Examples include demand response, capacity programs, frequency regulation, and day-ahead or real-time energy market dispatch. VPPs create a separate revenue line for DayFi paid by an energy market counterparty (referred to as “energy market operators” in the protocol), on top of the contracted host revenues. Settlement can be monthly or quarterly depending on program rules.

Government incentives reduce upfront capital costs and reward energy production. The federal Investment Tax Credit (ITC) covers up to 30% of system costs. Certain states offer Solar Renewable Energy Certificates (SRECs) or performance-based incentives tied to production or capacity. Daylight’s structure allows direct monetization of these credits and attributes, adding a third source of predictable cash flow.

Daylight’s protocol does not extend credit in the traditional sense. It owns and finances infrastructure directly through affiliated, bankruptcy-remote special-purpose vehicles (SPVs). The primary exposure arises from the ongoing offtake payments made by hosts under long-term power purchase agreements. To reduce default risk, Daylight applies standardized underwriting criteria before approving a host.

Hosts are screened against standardized underwriting criteria before installation:

PPAs include a security interest or Uniform Commercial Code (UCC) fixture filing associated with the installed system. This enables DayFi to contractually enforce payment before the system (and the home it’s attached to) can be transferred.

For example, if a delinquent customer attempts to sell their home, the customer must make the SPV whole for any delinquent payments, or they cannot sell the property. In addition, in order to sell the home, the customer must buy out the system or transfer it to the new homeowner. 

A unique form of enforcement exists through opportunity cost. If a host becomes delinquent, the system will be remotely disabled, reverting the host to grid electricity at higher retail rates. The differential between the Daylight subscription rate and the local utility tariff represents a recurring opportunity cost that discourages nonpayment. Reconnection is contingent on clearing outstanding balances, creating a simple but effective behavioral incentive.

At the pool level, diversification across thousands of hosts in multiple markets further limits concentration risk. Correlations between host defaults are low because local economic, weather, and tariff factors vary. The result is a broad, amortizing portfolio with steady cash flows and limited tail risk.

DayFi finances a distributed fleet of solar and storage systems under long-term PPAs, integrates every system into a virtual power plant, and captures incentive revenues. 

The result is a portfolio of measurable, contract-based, and verified energy cash flows. By converting these flows into a liquid, onchain instrument, DayFi connects electricity generation directly to global capital markets.

The future of energy must be decentralized. It is the fastest and lowest-cost path to scale new capacity on power grids and the only approach that ensures the households and businesses facing rising electricity demand from AI, automation, and electrification gain access to cheaper and more reliable power—and share in the upside of building more.

DayFi builds capital markets to scale distributed energy as an active grid resource. The DayFi protocol issues an energy-backed yieldcoin for DeFi and channels capital into behind-the-meter systems. The question is what sits beneath that token. This post explains the assets, revenue sources, and risk controls that support it.

DayFi finances distributed solar and battery storage systems in the United States, initially focusing on the residential market. Systems are owned by bankruptcy-remote special purpose vehicles (SPVs) and installed at host sites. A typical installation includes solar panels, a hybrid inverter, telemetry equipment, and a stationary battery sized to serve both the home and grid dispatch programs.

Residential assets provide diversification, short construction cycles, and consistent load profiles. When aggregated through Daylight’s software, these systems form a large, flexible energy fleet that supports power grids at scale.

Revenues from each energy system fall into three categories: contracted host payments, virtual power plant (VPP) revenues, and government incentives or environmental attributes. Each has distinct contracts, data, and settlement schedules. A project may only include one, or all, of the three main revenue sources.

DayFi offers Energy Subscriptions to residential homeowners (“hosts”) structured as power purchase agreements. Hosts receive solar at no upfront cost and contractually agree to buy the electricity generated from the energy system at an agreed-upon price per kilowatt-hour, typically below their existing utility tariff for immediate savings. Rates may be fixed or escalate modestly to hedge inflation.

Contracts run 15–25 years, providing stable visibility into production and cash flow. Hosts can buy out the system or extend the agreement at term, with early buyout options beginning in Year 6. Payments are billed monthly based on metered production.

Production risk is managed through standardized design practices, shading analysis, equipment warranties, insurance, and performance monitoring.

A Virtual Power Plant (VPP) is a coordinated fleet of distributed batteries that respond to grid signals as a unified, dispatchable power source. Instead of building large, centralized power plants, grid operators and energy companies can tap into this aggregated battery network to help balance electricity supply and demand, especially during peak periods or grid stress events. Daylight Subscriptions include an oversized battery by default, designed specifically to maximize energy market participation. 

VPP opportunities vary by market. Examples include demand response, capacity programs, frequency regulation, and day-ahead or real-time energy market dispatch. VPPs create a separate revenue line for DayFi paid by an energy market counterparty (referred to as “energy market operators” in the protocol), on top of the contracted host revenues. Settlement can be monthly or quarterly depending on program rules.

Government incentives reduce upfront capital costs and reward energy production. The federal Investment Tax Credit (ITC) covers up to 30% of system costs. Certain states offer Solar Renewable Energy Certificates (SRECs) or performance-based incentives tied to production or capacity. Daylight’s structure allows direct monetization of these credits and attributes, adding a third source of predictable cash flow.

Daylight’s protocol does not extend credit in the traditional sense. It owns and finances infrastructure directly through affiliated, bankruptcy-remote special-purpose vehicles (SPVs). The primary exposure arises from the ongoing offtake payments made by hosts under long-term power purchase agreements. To reduce default risk, Daylight applies standardized underwriting criteria before approving a host.

Hosts are screened against standardized underwriting criteria before installation:

PPAs include a security interest or Uniform Commercial Code (UCC) fixture filing associated with the installed system. This enables DayFi to contractually enforce payment before the system (and the home it’s attached to) can be transferred.

For example, if a delinquent customer attempts to sell their home, the customer must make the SPV whole for any delinquent payments, or they cannot sell the property. In addition, in order to sell the home, the customer must buy out the system or transfer it to the new homeowner. 

A unique form of enforcement exists through opportunity cost. If a host becomes delinquent, the system will be remotely disabled, reverting the host to grid electricity at higher retail rates. The differential between the Daylight subscription rate and the local utility tariff represents a recurring opportunity cost that discourages nonpayment. Reconnection is contingent on clearing outstanding balances, creating a simple but effective behavioral incentive.

At the pool level, diversification across thousands of hosts in multiple markets further limits concentration risk. Correlations between host defaults are low because local economic, weather, and tariff factors vary. The result is a broad, amortizing portfolio with steady cash flows and limited tail risk.

DayFi finances a distributed fleet of solar and storage systems under long-term PPAs, integrates every system into a virtual power plant, and captures incentive revenues. 

The result is a portfolio of measurable, contract-based, and verified energy cash flows. By converting these flows into a liquid, onchain instrument, DayFi connects electricity generation directly to global capital markets.