Maui Electric Company has agreed to buy renewable electricity from a 1.5-megawatt photovoltaic facility on Lana'i being built by Lana'i Sustainability Research LLC, a Castle & Cooke company.

The power purchase agreement is awaiting final comment from the state consumer advocate and approval by the state Public Utilities Commission, according to a joint news release from the two companies. The solar farm is anticipated to be completed by Oct. 31.

The Lana'i solar farm will supply up to 30 percent of peak electrical demand on Lana'i and is expected to ultimately generate 10 percent of the island's total power needs, according to the news release. It will be the largest photovoltaic array connected to any Hawaiian Electric Co. grid and is, to date, the largest solar installation in Hawai'i and one of the larger systems in the nation, the news release said.

An integrated battery system to moderate power fluctuations is currently being finalized and will be installed at the solar farm next year.

Under the agreement, Maui Electric, a subsidiary of Hawaiian Electric Co., will pay for the electricity imported into the Lana'i grid at rates not tied to the price of oil, helping provide more stable long-term electricity costs for Lana'i customers.

"This power purchase agreement is a significant milestone for Castle & Cooke," said Harry Saunders, president of Castle & Cooke Hawai'i. "It marks the first step of our commitment to provide clean energy and paves the way for Lana'i to become the first Hawaiian island to generate 100 percent of its own electricity.

"Lana'i residents aren't the only ones who will benefit from this agreement. This effort will help the state of Hawai'i realize its goal of 70 percent renewable energy by 2030. We are proud of the role that Lana'i will play in reducing the state's dependence on foreign oil," Saunders said in the news release.

In April, Castle & Cooke signed a memorandum of understanding with the U.S. Department. of Energy and Maui Electric to develop alternative energy options for the island. The ultimate goal is to achieve 100 percent renewable electricity and transportation on Lana'i.

Present electric generation on Lana'i comes from the 9.4-megawatt Miki Basin Power Plant, which is fueled by diesel oil. The 10-acre solar farm, which features a 7,000-panel SunPower Tracker photovoltaic solar array, is located about two miles from the power plant on flat, south-facing land that is ideal for capturing the most sunlight.

"This agreement provides a negotiated price that is below the avoided cost of oil, provides a reasonable return to the developer and makes a significant contribution to meeting the renewable energy goals for Hawai'i," said Ed Reinhardt, president of Maui Electric Co., which serves Maui, Molokai and Lana'i.