The Kaua'i Island Utility Cooperative announced Wednesday that it will build a $40 million solar facility that will generate 12 megawatts of power, about 6 percent of Kauai's daily energy needs.
The solar photovoltaic project will be built on 67 acres KIUC is leasing from Lihue-based Grove Farm Co., Inc. near Koloa.
KIUC says it has hired SolarCity, with local operations in Mililani on Oahu, to build the system.
The project will be the third utility-scale solar facility under construction or in development on Kauai. It will also be one of the largest in Hawaii.
When completed, these three solar projects will generate 30 megawatts during the day, enough power to meet about 50 percent of Kauai's daytime electrical demand. That means KIUC will carry the highest percentage of solar PV on its system of any utility in the U.S.
"This is a huge step toward achieving our goal of using renewable resources to generate at least half of our power needs by 2023," said Teofilo "Phil" Tacbian, chairman of the board of directors of KIUC. "Using the power of the sun instead of fossil fuel will annually replace about 1.7 million gallons of imported oil."
Assuming county and state regulatory approvals are received, construction is expected to begin by July 2013, with the project operational by the end of 2014.
The project will be built just east of Koloa on Mahaulepu Road, between the Koloa Bypass Road and the old Koloa Mill. The project is adjacent to KIUC’s existing Koloa substation, which will greatly reduce interconnection costs.
The project is expected to create about 125 construction jobs.
A 1.5-megawatt battery storage system is already in use at the substation and a second battery storage unit will be added.
The battery systems store energy generated by the solar arrays and help to “smooth” power entering the grid by compensating when cloud cover diminishes the output of the solar panels.
The project will be developed by a subsidiary of KIUC that will enable it to qualify for state and federal tax credits. Because it is a member-owned cooperative, not an investor-owned utility, KIUC can finance the project through the National Rural Utilities Cooperative Finance Corp., which is also a cooperative.
Two other utility-scale solar projects are already underway on Kauai.
Honolulu-based Alexander & Baldwin, Inc. is close to completing its 6-megawatt solar facility adjacent to KIUC's power station at Port Allen. Combined with a 3-megawatt battery storage system operated by KIUC, the project is expected to be finished by the end of the year. A&B will sell the power it generates to KIUC.
At Anahola, KIUC, in partnership with the Department of Hawaiian Home Lands and the Homestead Community Development Corp., is developing a 12-megawatt solar farm. Construction on the project, to be built by REC Solar, is expected to begin in early 2014.
"These projects underscore KIUC's leadership in the solar arena and our commitment to renewable energy," said David Bissell, president and CEO of KIUC. "The work we’re doing today means KIUC members and their children will benefit for the next two decades from clean, renewable solar energy at a fixed price not tied to oil."
In March 2012, KIUC sought bids from Kauai landowners interested in hosting a utility-scale solar project. KIUC received nine proposals and selected the Grove Farm/SolarCity plan after determining that it most closely matched the utility’s criteria for a cost-effective project with the least environmental impact.
"Renewable energy is a driver of economic development on Kaua'i and KIUC is proud to be at the forefront," Bissell said. "Projects under development, either KIUC- owned or through power purchase agreements, represent more than $200 million of capital investment over the next several years."
KIUC has committed to using renewable resources to generate 50 percent of its energy by 2023.
KIUC is a member-owned cooperative serving 33,000 customers on the island of Kauai. 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.