About NHCS
NHCS finances community-scale solar projects for local non-profits in southern Connecticut, a mission which took its first steps last year with a 9.24 kW community solar project located on Button Street in New Haven, Connecticut. New Haven Community Solar will finance an 11.24 kW solar project located on Plymouth Street in New Haven, Connecticut. Both projects provide solar panels to Columbus House, a nonprofit organization based in New Haven that serves people who are homeless or at risk of becoming homeless by providing housing and shelter and by fostering their personal growth and independence.
The lot on Plymouth Street is the site of this year’s annual Jim Vlock First Year Building Project - a partnership between the Yale School of Architecture and Columbus House. The Building Project, which began in 1967, gives Yale students an opportunity to design and build a house in an economically challenged neighborhood in New Haven. The program is mandatory for all first-year graduate students at YSoA, many of whom arrive at Yale with a special interest in socially responsible design. Once complete, the house will contain three units for recently homeless people run through Columbus House. Once the power purchase contracts are finalized, this project will provide Columbus House access to low-cost electricity to support their mission.
Sales, Supply Chain, and Customer Base
In keeping with the precedent set with the Button Street Project, sales of electricity will be made to Columbus House and the local investor-owned utility, United Illuminating Company. These contracts are currently under negotiation, which was initiated after Columbus House expressed interest in pursuing the contract at an agreeable price. In the proposed agreement, electricity sales will be made to Columbus House under a 20-year contract, known as a purchase agreement (PPA), at a fixed price with an annual inflation escalator. Any additional power generated by the solar panels and not consumed by the residents will be sold back to the power grid and purchased by the utility. Additional revenue may be generated in the future through the sale of Renewable Energy Credits (RECs) in the form of Connecticut Zero Emissions Renewable Energy Credits (ZRECs). The application for the Plymouth Street project is drafted and will be submitted to the utility after completing construction.
The supply chain has low-risk because NHCS #1 already has a signed, 20-year power purchase agreement, and all parties have expressed interest in moving forward with the Plymouth Street project. NHCS currently has a contractual agreement with a local Connecticut solar installer, Sunlight Solar Energy Inc, to purchase and install the solar array for the Plymouth Street project once financing is complete. Sunlight Solar has over 30 years of experience in the solar industry and has installed over 4,000 solar arrays.
There are three customers in the NHCS customer base. The first customer who provides most of the revenue is Columbus House, a well-established and respected Connecticut non-profit. The second customer is the local investor-owned utility company who is required by net-metering law to purchase any renewable energy credits for 15 years, if the second project is approved for the ZREC program, and also required to purchase additional excess power provided by grid-connected solar panels, once interconnection is approved. The third customer is any future customers who wish to purchase RECs should they become available in the future.
Competition
New Haven Community Solar, LLC has the exclusive and contractually secured rights to provide electricity to the Columbus House Inc for NHCS #1, and anticipates having the same exclusive and contractually secured rights for the Plymouth Street project through a similar arrangement. However, the contract is still under negotiation with Columbus House and will not be finalized until after the filing of this offering. There is a potential that circumstances could cause Columbus House to breach the existing contract for NHCS#1 or not agree to the new contract for the Plymouth Street project, at which point, New Haven Community Solar would lose its contracted revenue and be forced to find an alternative purchaser of electricity generated by the solar project, potentially at a lower price that the price written into the PPA.
If we are able to agree on the contract for the Plymouth Street project, our business will be subject to minimal competition. However, open markets, such as the electricity market, are always competitive which makes any projects that may be developed by NHCS subject to the same level of competitiveness as other rooftop residential or community solar owning businesses. The degree of competition could be reasonably calculated based on widely accepted practices for evaluation of the concentration of the market, reflected by the Herfindahl Hirschman Index, which could be assessed on the intersection of our market niche.