Good morning. I'm Michael Toporek, Chief Executive Officer of Soluna Holdings. Thank you for joining me for the July 2022 Flash Update. We begin with the usual preamble. The following discussion is completely qualified by the legal disclosures on the several pages following this one. Our goal is to share with you some of our strategic thinking and financial analysis we're using to guide the growth of our business. The discussion is in line with our principles of being accountable and transparent with shareholders. We operate in a hyper-dynamic economic environment. That's a fancy way of saying things change quickly. What we're telling you here is based on our estimates and assumptions, which are our best guess. We reserve the right to revise our point of view based on new information and changes in the business environment.
Despite an uncertain dynamic environment, we have to plan and make operating and investment decisions. This presentation lays some of that out for your review. I'd like to continue with outlining our key operating principles. First is alignment of interests, transparency, and accountability. Brookstone Partners, a private equity firm that I'm affiliated with, owns just under 30% of the common equity of the company. I believe that helps align the senior decision-making, both at the board level and at the company level, regarding how we allocate capital, how we raise capital, and the general operating principles of the company. It also helps align us economically with the interests of the common shareholders. We are dedicated to high-velocity execution. That means establishing our goals, our targets, and marshaling the resources to get things done quickly.
You'll also notice that since inception in this business, we've emphasized return on invested capital, measuring our returns on invested capital, and capital discipline in terms of how we run the business. We've also expressed to you a long-term strategy and vision that extends beyond crypto mining into batchable computing and other high-density computing sectors. Soluna is a solutions-oriented company. We buy curtailed energy, unsold energy from renewable power generators, and we convert it to clean, low-cost computing power. The company is taking excess energy from renewable energy sources and funneling it to powering batch-oriented computing. For example, cryptocurrency being one of them. Soluna's market opportunity beyond crypto is what we're calling batchable computing. That's basically computing power that can be flipped on and off as resources are economically available from power generation.
The first market we're applying this to is the digital currency market. Other sectors that we believe can benefit from this type of batch computing to deliver low-cost computing resources are pharmaceutical research, for example, graphics and video processing, and all forms of scientific research, including academic and commercial scientific research. The agenda for this presentation will be as follows. I'll begin by giving you a business and strategy update, followed by the flash July 2022 results. We like to think of Soluna as the right company with the right plan for a volatile environment that we've specifically engineered to thrive in a Bitcoin downturn.
By that, we mean when we first entered this sector, we were very careful to engineer our growth to make sure that our power costs were between, call it $0.025-$0.028, or can reach that level if switched in certain fashions at every site we were engaged with. That was critical for us. Because that was approximately the power cost required to be profitable every day of the prior crypto downturn. We've engineered our business in that fashion from the beginning, and that's why you'll see we're very well positioned to get through the current environment in a very strong position to deliver great returns to our investors as we emerge from the downturn. Our distinct investment thesis has several parameters. First, and most importantly, it's driven by access to low-cost power.
Every site that we've engineered has to have the ability to operate between call it $25-$27 per MWh. That assures operational profitability and gives us the ability to invest through the cycle. That's probably lowest decile to lowest quartile cost on the Bitcoin mining network. That ensures our survivability and our profitability through the cycle. Furthermore, the next point is that renewable energy generators and grid operators actually need flexible load capacity, especially as renewable energy generation increases. That creates an increasing supply of low-cost power opportunities. Third, we've talked about expanding into high-performance computing. That's a clear target for us to grow organically and by acquisition. Our business exists at the intersection of power and computing. Finally, we believe we've built a strong operating culture. This volatile environment creates opportunities for us to consolidate mining and high-performance computing verticals.
Also, our strong value and return on invested capital orientation continue to be applied to every opportunity we're assessing. I wanted to make a point to alert some of our longtime investors to a big change that we've seen in the last several months. Initially, when we began discussing the concept of curtailment assessments, working with renewable power generators to monetize the power that they weren't selling, our corporate development efforts were centered around reaching out to that community, convincing them of our solution, that it was economically viable, and in fact, very much to their advantage. Something has shifted in the last several months. The inbound new business inquiry that we're getting by far exceeds the outbound calls we're making to generate power opportunities.
We believe that the concept of using curtailed energy to power something like our computing centers has really taken off in the power generation or the IPP sector, where they're thinking to themselves, "This is a potential solution to some of the problems in our portfolio, and it's actually incumbent upon us to at least explore this opportunity or this potential solution to some of our problem assets in our portfolio." We've been getting those calls. Our curtailment analysis team is very busy responding to those assessments. To give you some sense, much of this is in a very early stage. Looking at the curtailment assessments that we're doing, there are over 2 gigawatts in that pipeline. Clearly, many of that is early.
The main point I'd like you to take away from that is early on, we were trying to convince that community that we, in fact, had a solution for them. Now they are approaching us saying, "We've heard you have a solution for us. Let's explore how that could actually work." It's a sea change in the environment for us. We believe that now is the time to invest in the sector. It is vital to us to invest through the cycle. The cost of computing equipment is down between 70%-80% since January. Miner payback has always fluctuated between nine months and a year on the short end and up to 24 months. As we've gotten under a year, it's always been the harbinger of a low in the cycle. We are there.
This is a very good time to be buying miners. Our near-term pipeline of 100+ MW at less than $30 per MWh provides a very attractive platform for us to use to grow through the cycle. Furthermore, we're specifically sourcing non-dilutive capital to fund that growth. We have a long-term pipeline of nearly 2 GW, and our project financing process is extremely active with a strong reception in the marketplace. In our press release, we've disclosed that Truist is leading that process, and we already have identified and closed with a project financing partner, Spring Lane Capital. We expect the process with Truist to identify additional partners with whom we can build out additional capacity. This specifically allows Soluna to monetize its intellectual property.
Other firms are putting up capital, and we get a significant portion of the upside on that capital, specifically because Soluna's team is able to generate proprietary access to low-cost power by understanding the regulatory and power-generating environment. That dramatically enhances our return on invested capital. Let's begin our discussion now on how the quarter went. Q2 results demonstrated significant year-over-year growth. That's the result of our investments in Sophie and Edith beginning to bear fruit. Bitcoin equivalent increased by 7.5x year over year, hash rate scaled by 38x , revenue by 5x . The average Bitcoin price, though, changed from about $42,000 in March to about $24,000 in June. That resulted in only a 3.9% sequential decrease in cash contribution margin. Obviously, that's a consequence of us continuing to scale up our hash rate.
In the second quarter, the Bitcoin equivalent mined and hash rate demonstrate the results of our significant investments. For example, on the left, the Bitcoin equivalent mined from the first quarter of 2022 to the second quarter of 2022 moved from 226 to 267. That's over an 18% sequential increase. On the right side of the slide, our average proprietary hash rate moved from 666 petahash in Q1 2022 to 833 in Q2 2022. That's a 25% sequential increase. Our peak hash rate is over one exahash if we include our hosted hash rate. In the second quarter, our revenues have been resilient despite market challenges. Here we have a graph of our consolidated revenue from Q1 2021 to Q2 of 2022. It demonstrates Soluna's ability to scale rapidly.
Our second quarter revenue increased by 5x year-over-year. In the second quarter of 2021, our revenue was $1.6 million. Second quarter of 2022, our revenue was $8.6 million. Furthermore, between the first quarter of 2022 and the second quarter of 2022, Bitcoin prices on average decreased by over 21%. Our revenue only decreased by about 6%. That's as a consequence of us ramping up our hash rate and executing on our business plan. In addition, we did experience in the quarter some seasonal curtailment and outages at Marie that accounted for a little over half a million dollars in revenue lost in the second quarter. In the second quarter, our margins remained healthy. Let's first examine the consolidated adjusted cash contribution margin where we take out certain one-time events.
On a year-over-year basis, we increased that by 4x. Again, it was a sequential decline of only 3.9% in the second quarter from the first, despite a 21% decline in Bitcoin prices. Our prop mining margins were 55%, but our hosting margins were 17% excluding the legacy hosting. If you were to add up all the sites for our adjusted EBITDA and put that together, you'd see that on the right, where we have a 2.9x year-over-year growth. From the first quarter to the second quarter of 2022, we only have a sequential decline of 13% despite a 21% decline in Bitcoin prices. Now, you will see some increase in SG&A. That's as a consequence of the need to support some long-term growth in our pipeline.
The benefits of that will be clear in the following two quarters as we scale up Dorothy. Again, our margins and our business plan continue to show themselves as strong performers in this difficult environment. Recently, in June and July, Soluna experienced what I'll call a pretty challenging operating environment. On one hand, from the revenue side, you had the average price of Bitcoin decline 32%, say, from end of May to July. Our Bitcoin equivalent mine increased by 10.4% over the same time, while revenue decreased about 25%. We did manage to maintain our strong margins as we outlined on the prior pages, but clearly they were compromised as a result of the decrease in Bitcoin prices. Furthermore, we did experience significant seasonal increases in power cost.
In the past, I've always expressed our power cost as a range at each site because there is a seasonal aspect to it. The seasonal aspects have usually been very well controlled over the last seven to 10 years. However, in July, and probably upcoming in August, we've seen an unprecedented seasonal impact that have been exacerbated by extraordinary events, which have caused a significant increase in our fuel charges, something that is unprecedented in the past decade. We do believe, based on our discussions with the utility community, that costs should begin reducing significantly in September. July and August power costs are going to be impacted by extraordinary seasonal factors that will abate in September. Let's spend a moment to dig a little deeper to understand what happened to create this extraordinary supply-demand environment.
On the supply side, heavy droughts in Tennessee and Kentucky are limiting the hydropower that we're able to draw on. That requires our power provider to pull down more power from other sources. The TVA, which is our power, ultimately our power supplier, is targeting a 70% reduction in carbon by 2030, decommissioning coal using natural gas to fill some near-term supply gaps until more renewables can be built. Furthermore, the war in Ukraine caused natural gas prices to increase 53% in July. That there's an LNG terminal that's actually moving gas to Europe to help abate the supply shortage situation there. That's driving local pricing higher than in an area that we draw on. Flip that to the demand side. We normally see some increases in demand in the summer months.
This summer has been exceptional with the third hottest July in a 128-year-old record. Those factors combined caused our utility to pass through significant fuel surcharges. Again, based on our discussion with the utility community, we expect a meaningful abatement of these charges in September. To summarize, these exceptional events led to fuel cost increases. There has always been a band that we've disclosed for seasonal variation. The fuel cost adjustment was completely outside that. It's typically been $0.015-$0.02 per kWh for the last seven years. The fuel cost adjustment in July was $0.038. A truly unprecedented level. We understand that August cost will come up a little bit, but it's also our understanding that cost should begin to abate in September.
The natural question to ask is: How does this affect us economically and for how long? When will our fuel cost adjustment charges drop down to the normal range? Based on our understanding, that should be at some point in September. That September level should be much closer to June pricing. Looking at that, let's walk through what that means economically on the right here. If you were to take July revenue less June electricity cost and June overhead cost, you'd get $650,000 as our implied margin. That means that the impact from the fuel cost adjustment that we are seeing is about $323,000.
That's what we experienced in July, probably going to experience something like that in August, and then we should return back to the $756,000 level, roughly speaking, based on our estimates and based on our discussions in September. Let's now take a look at each facility, and then we'll look at the consolidated results. In this section, we'll review operating results and financial results by facility and then look at the consolidated results. Let me highlight a couple of things from our July business summary. Most importantly, our cash contribution margin from proprietary mining was 27% despite the July and what we're thinking will be August spike in fuel surcharges that we were charged by our utility. That's, again, strong performance on our end. We continue to generate higher numbers of Bitcoin.
We generated 12% more Bitcoin despite a similar decrease in Bitcoin prices. We managed to maintain our top line. Also, I've mentioned it before, our hosting agreement is over at the end of September. There is a significant mismatch in the marketplace between those that have hosting spaces like us and those that need hosting spaces. We expect to either continue with the current hosting customer, find another hosting customer, or possibly take over that space as proprietary mining for our own account. We will make that economic assessment as we go down the path with discussions with our existing tenant as well as other potential parties. I would expect that we would have a rejiggered set of economics that continue to assure us of a high level of return on invested capital, rewarding our investment in infrastructure.
We continue to scale our business through the cycle. That means that we're working to energize Dorothy One A sometime in the fourth quarter, and we're working closely with ERCOT to assure that we energize Dorothy One B. As we do that, we expect to produce market-leading costs in terms of power through the sector, and that'll be demonstrated in the margins that we're able to realize out of Dorothy. Our Sophie site continued its strong operating performance. In July, the petahash realized there increased by 23% versus June, and the site continues to perform exceptionally well, even in a low Bitcoin price environment. Some metrics, as I have graphed on the bottom of the page here. The Bitcoin equivalent mined for the month increased by 15%.
Bitcoin equivalent mined per day increased by 12%, and the hash rate deployed increased by 23% from June to July. Comparing the July to where we were in terms of our last day in August, that further increased our hash rate. Our hash rate further increased by 9%. Looking at Sophie's revenue for the month, solid. What we did experience was a diminution in cash contribution margins. Instead of operating at a 43% plus margin, we operated at a 33% margin. That's as a consequence of the increase in the fuel surcharge. We believe that we'll see that in August as well as July, and based on our discussions with members of the utility community, we expect the fuel charge to get back to its historical norm in September.
Unfortunately, we've gone through July, make our way through August, and back in September, I anticipate that we'll return to some form of normal in the June range of costs. It's unfortunate that we had to experience this given the rock-solid performance that we've seen over the past seven years in utility costs in this area. We'll get through these two months, and we'll move forward. Let's spend a few minutes looking at Soluna's revenue and profits. On the revenue side, hash rate was down just a little bit due to certain seasonal factors.
Cash contribution margin was really dramatically impacted by the changes in the fuel surcharge and the fact that we were not able to pass some of that along to our hosting customer, resulting in actually a negative margin on our hosting contract. Again, that contract will be over in September, and we are likely to engage in a construct that makes it highly unlikely that we would ever experience something like that again. If you were to take a look, though, at Bitcoin equivalent mined, we were successful there in increasing the amount mined for the month, increase of 9%, increase of the daily mined by 5%, and managing our hash rate. It's been steady, and we expect it to increase slightly in August.
Looking at the income statement carefully, comparing July versus June at Edith, you'll see that the top line was roughly equivalent, down just a little bit. Prop mining was down just a bit. Hosting was down just a bit. What you will see is an increase in prop mining electricity costs and an increase in hosting costs. However, due to the construct of our contract with our JV partner, much of the unexpected increase in power costs we were not able to pass through to our hosting customer, causing us to have a negative hosting margin of $90,000 for the month. Obviously, that contract will be rewritten such that at the end of September, the construct that we will engage in will not permit us to have a negative margin.
It's just that's the way the calculations happen, and we've got to honor our contract. We were very fortunate early on in the contract where we made significant returns on hosting. Now we're giving a little bit of that back. I'm not enthusiastic about it. The construct served us very well, and, you know, in July and August, we are unlikely to experience what I'll call anywhere near the historical profitability that we had on that contract. We'll clearly have a different construct starting in October, either with the current customer or a different customer. Again, we expect the energy costs to be back to approximately back to June norms in September. We will have, again, probably not identical, but a similar one-time impact in August, returning to historical norms that we've seen in June on the income statement here.
For your review here, you'll see some of the Marie operating metrics, which I think will give you a helpful point of reference when assessing our performance. Edith is our smallest facility. It was our original pilot project. It continues to perform well in this challenging environment. The output is reasonably steady, but as a consequence of being a smaller facility, it doesn't get the benefit of the scale that something like Sophie and Marie get. So its cash contribution margin was about $26,000, up from July. We did put a little effort into reorganizing it to try to optimize its profitability, even in these challenging times. Looking at Edith's financials, I do wanna remind investors that, since inception, Edith's has returned well over three times the money we've invested. We're careful in terms of how much additional capital we invest.
We're very much in harvest mode here in this facility, and it's small. We're trying to make assessments as to reinvestment, a disposal, you know, thinking about how this fits into our long-term strategy and what we can do with this small but profitable pilot facility going forward. On a consolidated basis, July petahash increased by 9% on average. We had our installed peak hash rate exceed one exahash as we talked about. Our sites are stable even in this lower Bitcoin environment, and we are assessing moving Marie down to lower uptime and less power, depending on the Bitcoin pricing environment and the fuel surcharge. We might flip that for one month and flip it back. We have to do that analysis very carefully.
Below you'll see that Bitcoin equivalent line for the month and by day has increased and our hash rate has gone up on average for July and we expect it to increase somewhat in August. This is Soluna's consolidated non-GAAP historical financials, looking at it down to cash contribution margin. As we've talked about earlier, the cash contribution from June to July moved from $800,000 to $433,000. However, we did experience an exceptional fuel surcharge that of approximately $360,000. If you were to add that to our $433,000, you get approximately $800,000 in cash contribution margin. August is likely to be similar, but September is, from what we're told in the utility community, likely to recover back to June costs.
As you can imagine, we have to work through July and August, but we expect our September numbers to recover. In the next flash, I'll be able to report into you where we are, how we did in August, but also give you some insight as to cost in September and the margin recovery that we're anticipating. On this page, you'll find some key operating metrics that you can track that I think will demonstrate for you that other than the unexpected fuel charge that we experienced in July and August, I think you'll see that the business remains to be a strong generator of Bitcoin and will return to its historical margin levels sometime in September. Thank you for joining me this morning.
Should you have any questions, please contact our investor relations firm, MZ Group, or feel free to reach out to me or others at the company directly. We do make it a point to respond to every inquiry and address your questions to the best extent possible. Thank you.