A solar project in Kapaa, once the largest in the state, is seen here. The Anahola project will generate more than four times the capacity of the Kapaa solar farm.

A solar project in Kapa‘a, once the largest in the state, is seen here. The Anahola project will generate more than four times the capacity of the Kapa‘a solar farm.

Hot off the solar panel and toward getting off the oil: A North Shore-based solar energy project is supposed to go into operations in approximately a year and supply about one-fifth of the island’s daylight energy demand.

The Board of Directors of Kaua‘i Island Utility Cooperative and members of the Hawaiian Homes Commission voted this week to approve the terms of a 25-year lease of 60 acres for the construction of a 12-megawatt solar array in Anahola, according to a KIUC press release.

“This is a great project for Kauaʻi and the Anahola community and I’m glad that we could partner with Department of Hawaiian Home Lands to make it happen,” KIUC CEO and President David Bissell said in a press release. “The project will provide not only the benefits of cheaper solar energy but also economic benefits to the Native Hawaiian community.”

Construction is expected to begin this spring on the $54 million solar array, substation and battery energy storage system, which will be the third large-scale solar project on Kauaʻi. Combined, all three projects will provide almost 50 percent of the island’s daylight energy.

The Anahola project, which is expected to be in operation by early 2015, will generate electricity at a cost of about 12.5 cents per kilowatt hour compared to about 24 cents for electricity created by burning oil. It will also enable KIUC to reduce its use of oil by 1.7 million gallons a year.

Five percent of Kauaʻi’s annual energy needs – enough electricity for 4,000 homes – will be produced by the system. During the daylight hours, about 20 percent of the island’s electricity will come from the Anahola project.

The array will consist of 59,000 panels and other equipment to be installed by REC Solar. Construction will employ about 150 workers with an effort by the contractor to hire qualified Kauaʻi residents.

In addition to lease payments to DHHL, the contract between the agency and KIUC calls for ownership of the solar array to transfer to DHHL after 25 years.

The agency could then negotiate an agreement to sell electricity to KIUC or could potentially convert the facility to a micro-grid that would provide power to beneficiaries in the Anahola region, depending on the technology available in the future.

DHHL also has the option to end the lease and have KIUC pay to dismantle the facility.

A KIUC service center and baseyard adjacent to the solar array could also be part of the deal. KIUC has five years to decide whether to build the service center, which could include a member services area for bill-paying and service inquiries.

The project also includes a lithium-ion battery system capable of storing 6 megawatts of power that can be used when cloud cover reduces the output of the solar array.

In a separate agreement, KIUC will provide benefits to the Homestead Community Development Corporation for job training and education related to renewable energy.

KIUC, DHHL and HCDC have been working together on the Anahola project since 2011, when it was first presented to community beneficiaries for their consideration. Six beneficiary consultations were held in 2011 and 2012.

A final informational briefing was conducted by DHHL in Kapaʻa on Feb. 6, which was attended by about 70 people.

When completed, the Anahola solar project will be one of three large arrays generating power for KIUC. The three arrays – Anahola, Kōloa and Port Allen ­– will generate 30 megawatts during the day, nearly half of the daytime customer demand.

KIUC has committed to using renewable resources to generate 50 percent of its energy by 2023. Achieving that goal will not only stabilize customers’ utility bills, but will create local jobs, reduce greenhouse gas emissions and contribute to Hawaiʻi’s clean-energy efforts.

KIUC is a member-owned cooperative serving 33,000 customers. Governed by a nine-member, elected board of directors, KIUC is one of 930 electric co-ops serving more than 36 million members in 47 states.